Paying contractors with credit card vs cash

[mefordis]

We have begun the process of remodeling our home, and are now in the design phase, working with an architect.

I am thinking ahead to the hundreds of thousands of dollars we are about to spend, and the tens of thousands on materials. I like to use my credit card for everything to rack up points and miles. I know contractors hate taking credit cards and want to get paid in cash. I completely understand but what about materials? When the time comes to begin the build phase, I wonder if it's very common to ask a contractor if we could pay for the materials with our credit card?

Can you imagine being a contractor who buys the materials on their own credit card, for all of their clients? That is a huge number of points they must earn every year.

 

[AgentMama]

I almost alway pay contractors in cash, generally I ask if there is a discount for a cash payment and there almost always is. The difference is generally a greater savings than what you receive back in rewards.

 

[longboard55]

I found contractors prefer to have the owners pay for materials direct. Charge away

 

[mefordis]

I almost alway pay contractors in cash, generally I ask if there is a discount for a cash payment and there almost always is. The difference is generally a greater savings than what you receive back in rewards.

The contractors I have worked with in the past require cash, no option to pay any other way so no discount. I guess I'll see what the contractor we hire for the renovation says. I hope he at least let's us buy the materials.

 

[tvguy]

When I remodeled in 2013 the contractor I used was cash only. They had me buy appliances and fixtures on my own. If I used the suppliers they recommended, those suppliers would deliver everything to my contractors warehouse. Doors, cabinets, counter tops and flooring they purchased.

When I replaced my HVAC in December, the bid was the cash price. They would accept credit cards, but added on a 3% surcharge. Credit Card surcharges seem to be growing in popularity as businesses struggle to contain operating costs.

 

[LYSE]

Smaller contractors usually don't have a way to take card medium to large can usually take the card but will charge a processing fee which even at 2-4 percent may be worth it to you if your hitting minimum spend requirements on new cards.

Now most small contractors actually love it when you pay for materials directly because that's less working capital that they need for the job and those individual suppliers will likely take card included or for nominal fees.

In the past 3 years or so I've run about 200k of remodeling/improvements through my credit cards.

 

[Skippy918]

We’ve written our contractors checks for various maintenance and remodeling services. Some will take Venmo as well. Many don’t have the ability to take credit cards especially if they are a one person company.

 

[SandyinMonterey]

I have done A LOT of remodeling in my home the last six years. I have learned A LOT from my first project 6 years ago to the one we are about to start. Buy your own materials. I did from the start but with my first project (master bathroom), I allowed my contractor to pick up a few things...a door, a mirror, etc. Things I couldn't manage to pick up on my own. But the contractor charged more for the door and the mirror, etc. A kind of "upcharge." We're about to remodel another bathroom. I have everything picked out and will have purchased and on site when work begins. I also use credit card for the points.

 

[slo]

I’m really weird about paying people in actual cash - I like having proof that i paid for something, so if they didn’t want to take a cc, then I would write a check.

Good luck with your remodel - I hope everything goes smooth for you.

 

[Christine]

I've never had a contractor who has an actual business ask for cash. We remodled 4 bathrooms 2 years ago and I hired a bathroom/kitchen/tile renovator to do it. It cost $50,000 so not sure how I would have paid cash for that. I did pay in check though. He was willing to take a credit card but for that amount, I'm not sure any one card of mine has that amount. I don't have a HELOC either.

My husband is a retired electrician and he does odd jobs here and there for people we know. They generally pay us with cash or a check but these are very small amounts.

 

[RedAngie]

Hundreds of thousands in renovations???

Maybe buying a different house is a better option.

 

[mjkacmom]

I use checks for contractors, but our auto mechanic gives a cash discount.

 

[easyas123]

Before you start buying, if you have a quote for the project, and mark ups are already accounted for, speak with the contractor. If you don't already have a quote and are getting a T&M quote from a contractor, ask him at the time they are taking off the job about a take off of materials and where to buy them & if that will work for them. It's not uncommon for them to have a discount w/ a distributor especially if they are buying in multiples &/or bulk for several projects, so it may not be possible, and your price vs. their price may be different.

 

[_19disnA]

Doesn't hurt to ask the contractor what forms of payment they accept. I agree with others the very small contractors may not have a way to process credit card payments. Some may charge an extra fee to use them since the card companies charge a processing fee. I bought some carpeting from a smaller local store and they gave a discount when paying with cash.

 

[disneychrista]

When I remodeled my bathroom I bought the fixtures. I got a cashiers check from my bank to pay him.

I’m currently having my yard landscaped and I am paying them in cash. He also bought the supplies. So far close to $500. Another $100 or so to go. But I am working with a good friend on this project do that is the difference.

 

[longboard55]

A couple of things, if you buy materials direct, ask the contractor for his number at the store, they will usually give you his discount. Also contractors always over order. Keep an eye on things not used and keep receipts. If you have a pile of unused 2x4s return them. Returns are very common in construction

 

[_19disnA]

Depends on what exactly you are buying and/or whether the contractor lets you buy our own materials. On something like faucets or a sink, where they are many choices/styles, I can see them letting you buy it yourself. For others types of construction materials, some contractors don't want to get involved if the wrong items/quantities/sizes are ordered and you still need to transport them to the construction site if the store doesn't offer delivery. If you have an excess, some items can't be returned or only complete bundles (like roof shingles) can be returned or the contractor doesn't want the bother of being a 3rd party.

If you pay any contractor in cash (vs. a check) make sure to get a receipt. This avoids issues later on if they claim you never paid them.

 

[mefordis]

I've never had a contractor who has an actual business ask for cash. We remodled 4 bathrooms 2 years ago and I hired a bathroom/kitchen/tile renovator to do it. It cost $50,000 so not sure how I would have paid cash for that. I did pay in check though. He was willing to take a credit card but for that amount, I'm not sure any one card of mine has that amount. I don't have a HELOC either.

My husband is a retired electrician and he does odd jobs here and there for people we know. They generally pay us with cash or a check but these are very small amounts.

My landscaper will take only cash. I literally had to go to the bank and take out thousands of dollars for the patio he built.
I am hoping the new contractor we hire will work with us so we can buy the materials. I'd use the AMEX platinum which has no limit.

 

[mefordis]

Doesn't hurt to ask the contractor what forms of payment they accept. I agree with others the very small contractors may not have a way to process credit card payments. Some may charge an extra fee to use them since the card companies charge a processing fee. I bought some carpeting from a smaller local store and they gave a discount when paying with cash.

Venmo would be good as I can use a credit card and it goes straigh to their bank account, no fee on their end.

 

[Mackenzie Click-Mickelson]

We just paid for an appliance repair person to look at our dryer, this is a small business, but they have where you can make appointments online, they text you a confirmation and then the intended repair person (which the company only has a few) can text you for more information.

Our repair person texted my husband, thought the issue may be a blower and picked up one on his way to our house, the blower wasn't the problem, in fact he couldn't figure anything out other than maybe replacing the idler pulley assembly (which we did and he was the one to tell us about one of the only appliance parts stores in the area who is open to the public rather than having him install it which he said would cost a lot more) but mechanically the dryer was fine, just made a loud very loud noise (which is better with the new part but not back to before). Anywho he had a square device for the charges owed for having him look at it, although it was just under $100. Check or card is what he mentioned.

These days while square and other such devices may charge a fee even small businesses should be able to have things like this. With all the other payment methods available someone only taking cash and cash for large projects would make me wary of them. If a card is a no go I would do a cashier's/teller's check if possible for the amounts you'd be likely talking about.