Prepaid Debit Card for Builder

Benben52

I am helping a friend renovate her house.  The easiest way to keep track of spending and allow the contractor to pay labourers and buy materials appears to be setting up a prepaid debit card.   So I'm interested to hear from anyone who has done this and which banks they used.  Her retail bank (Lloyds) doesn't have such an option.  

The contractor is someone I know and trust completely, so that isn't a big concern. 

Some of the prepaid accounts I've looked at limit the amount that can be loaded per month, and that could well be a problem.  So are there other pitfalls I should be looking out for?

cx6

You could open a Starling current account and set the overdraft slider to zero - Starling would then not allow anything to be paid that was not in the account. 

Daliah

Tesco Clubcard Pay + might fit the bill. There is no limit on how much you can load on it, and there are no charges. Even gets you a little cashback.

EDIT: it would be against T&Cs though to give the card to a 3rd party.

400ixl

Why would the contractor not be invoicing for services and materials and doing that? Even if some of the invoicing is for deposits in advance.

What you are proposing sounds like it is for tax avoidance by the contractor and could be picked up as money laundering by a financial institution.

Zanderman

cx6 said:

You could open a Starling current account and set the overdraft slider to zero - Starling would then not allow anything to be paid that was not in the account. 

If the idea is to give the contactor the card to use then using a bank account is not a good plan - unless in the contactor's name (in which case why can't the contactor do it). Allowing a third party to access a bank account that isn't in their own name breaks the bank's T&Cs.

A pre-paid card can avoid this - which is, I assume why the OP is proposing using one.  Indeed some pre-paid card providers specifically offer the option of getting a card that is to be used by a third party. 

WillPS

Connected card - Starling Bank

Seems like a slam dunk to me.

Daliah

WillPS said:

Connected card - Starling Bank

Seems like a slam dunk to me.

It's got a £200 limit, which might be far too little to to pay labourers and buy materials

born_again

Benben52 said:

I am helping a friend renovate her house.  The easiest way to keep track of spending and allow the contractor to pay labourers and buy materials appears to be setting up a prepaid debit card.   So I'm interested to hear from anyone who has done this and which banks they used.  Her retail bank (Lloyds) doesn't have such an option.  

The contractor is someone I know and trust completely, so that isn't a big concern. 

Some of the prepaid accounts I've looked at limit the amount that can be loaded per month, and that could well be a problem.  So are there other pitfalls I should be looking out for?

I don't get why this is a easy way to track spending. They are still going to need to know exactly what each payment is for.
Invoicing by builder is far easier & friend would only need to make one payment a month.

What you are suggesting sounds like a major risk for your friend to be ripped off & builder to end up in trouble for tax avoidance.

penners324

It sounds like 1 of the worst solutions. If the builder is in business properly then they should just issue an invoice for the agreed amount 

jbuchanangb

The only time I was involved with a building project which required stage payments, the process was that the builder submitted the invoice, then the architect inspected the progress, and confirmed that the builder had performed work to the value of the invoice, and then we paid the builder's invoice. Maybe that project was unusual, it seemed to work OK for us.