Paying builders via credit card?

James_Green_1982

Hello,

Asking for some advice.
I am planning to get quite a bit of renovation work done on my house in the next few years.

I have previously found that most builders I've used have either wanted cash or direct bank transfer payments. None have been able to accept credit cards - so I have needed to accept quite a bit of risk.

So far the jobs have been relatively small, so I have accepted the risks of the builders defaulting on the job etc.

But the next few jobs I have got planned are quite expensive ones (around £5k each). So I'd be looking for builders (and glaziers, carpenters / roofers etc) who may take credit cards.

I will have the cash available for these jobs - so I'm only using the credit cards for the business failure type protection they offer.

I've seen a few double glazing companies do take credit cards. But their quotes have always seemed to be higher than the local firms who accept cash.

What are customers' general experiences of this issue?
Should you always expect to pay more if the builder accepts credit cards? Why is this? Do the builders need to pay the credit card companies - and so pass on the fees to customers?

Socajam

I have had this problem, they also add on an extra fee for taking credit cards.
I just set them up in my bank account and wire the money when the job is done.
I found a builder who is really good.
We have a good relationship in that he invoices me when the job is completed. No money up front etc.
One reason why I choose him was that he was the only one who stated how much he charges per hour on his website. My thought was if he was that confident of sharing his charge, then he was obviously good.
My first builder was !!!!!!, total waste of time, he was not able to think outside the box, something which was a a huge problem for me.

onomatopoeia99

It costs around 2%-3% to accept credit cards, more for Amex, plus a monthly charge. A builder is not a retail or mail order outlet processing a lot of transactions every day, accepting credit cards brings them nothing except costs and risk.

You might find that big national glazing companies accept them, but I doubt you'll find anyone here recommending those.

Doozergirl

Do your due diligence on the builder. There are olenty of ways to work out if someone is trustworthy by actually speaking to and visiting previous customers, checking their insurance, having a contract, agreeing stage payments and perhaps a small retention.

Trust goes both ways. I'd actually feel uncomfortable knowing that we could also be taken advantage of by someone charging back on something they'd paid for. We've been ripped off by clients too. Building work can be subjective and don't think the credit card companies are going to start getting involved in arbitration.

£5k is a lot of money to you, I appreciate that, but most builders extend more than that in credit to their customers before they get paid. My next invoice to one client, a private individual, will be in excess of £50k for 14 days work!

From my perspective, if a potential client doesn't trust my people to do the job we say we are going to do, then they've failed my only real test on whether we would work with someone at all. References are available, we often work with an open book and we are extending a line of credit to customers already. Using a credit card is not playing on a level field, IMO.

James_Green_1982

Thanks for all the replies.

One other method I have considered to reduce risk is to buy the materials myself and only pay the builders for their labour. In the past I have paid the builders for the materials - because it was simpler logistically and the amounts weren't so great.

Obviously this would involve more co-ordination regarding collecting the materials etc.

Another option (which I posted in the ''Bank Accounts'' section) is opening a ''business'' bank account and paying the builders direct transfer from there. Someone told me a business account offers the same protection as credit card payments.

Risteard

James_Green_1982 wrote: »

Thanks for all the replies.

One other method I have considered to reduce risk is to buy the materials myself and only pay the builders for their labour. In the past I have paid the builders for the materials - because it was simpler logistically and the amounts weren't so great.

Obviously this would involve more co-ordination regarding collecting the materials etc.

Another option (which I posted in the ''Bank Accounts'' section) is opening a ''business'' bank account and paying the builders direct transfer from there. Someone told me a business account offers the same protection as credit card payments.

Business bank accounts are only available to businesses. Not sure where you got the idea of extra protection in them to personal accounts either.

Doozergirl

James_Green_1982 wrote: »

Thanks for all the replies.

One other method I have considered to reduce risk is to buy the materials myself and only pay the builders for their labour. In the past I have paid the builders for the materials - because it was simpler logistically and the amounts weren't so great.

Obviously this would involve more co-ordination regarding collecting the materials etc.

Another option (which I posted in the ''Bank Accounts'' section) is opening a ''business'' bank account and paying the builders direct transfer from there. Someone told me a business account offers the same protection as credit card payments.

Paying for materials increases risk in a different way because the builder isn't responsible for their quality. If something fails, you only have a contract for labour and so the first issue is whether it's a faulty product or workmanship. Opens you up for dispute immediately.

When the builder supplies materials they are responsible for the whole job and it's their job to chase retailers etc. :

Just do some proper due diligence! The majority of builders in this country are perfectly good people.

I don't know what you're talking about re: business accounts but even if that is true, it sounds a rather convoluted way of still not trusting people that you are entrusting with your greatest asset. If the house falls down, you're going to need more than Section 75.

James_Green_1982

Doozergirl wrote: »

Paying for materials increases risk in a different way because the builder isn't responsible for their quality. If something fails, you only have a contract for labour and so the first issue is whether it's a faulty product or workmanship. Opens you up for dispute immediately.

When the builder supplies materials they are responsible for the whole job and it's their job to chase retailers etc. :

Just do some proper due diligence! The majority of builders in this country are perfectly good people.

I don't know what you're talking about re: business accounts but even if that is true, it sounds a rather convoluted way of still not trusting people that you are entrusting with your greatest asset. If the house falls down, you're going to need more than Section 75.

Yes. I've had this issue before, on smaller jobs. The builder didn't want to use the cheaper materials I was planning on using.

Doozergirl

James_Green_1982 wrote: »

Yes. I've had this issue before, on smaller jobs. The builder didn't want to use the cheaper materials I was planning on using.

That's a bit shocking, to be honest. You're nervous of trusting people to the extent that you're trying to make poor decisions on their behalf?

baldelectrician

James_Green_1982 wrote: »

Yes. I've had this issue before, on smaller jobs. The builder didn't want to use the cheaper materials I was planning on using.

I don't like using some brands (usually down to quality issues)

I get 1 or 2 clients a year who suggest they buy the materials and then I reply- excellent, are you aware there will be no guarantee?

I point out if I buy an item and it fails I will replace it under guarantee at no cost to them. Had they supplied the item then I would charge for both visits.

Although I do suggest a local wholesaler who sells decent outside lights where the client can pick one they like the look of.

societys_child

So I'd be looking for builders (and glaziers, carpenters / roofers etc) who may take credit cards.
<snip>
I've seen a few double glazing companies do take credit cards. But their quotes have always seemed to be higher

Well there you go. If you feel you need this extra 'security', pay the extra price . .