What’s the Best Way to Pay a General Contractor?

When paying a general contractor, is paper or plastic better? Angie’s List founder shares some tips and advice.

When your world’s been rocked by a tornado or other disaster, it’s hard to wrap what’s left of your mind around how and when to pay a contractor.

That’s why you should listen to an audio interview with Angie’s List founder Angie Hicks, who recently talked to the Wall Street Journal about the timing and mechanics of paying a contractor. Here are five interview highlights:

1. Pay contractors by credit card, which gives you the most protection and leaves a good paper trail. If the contractor won’t accept plastic, pay by check and write on the memo line exactly what part of the project the check is for. 

2. Don’t use contractors who insist on cash; it’s a red flag that something fishy is going on.

3. Payment is a great way to keep a contractor on track, so never pay for the entire project up front. If you pay for materials, make sure you get proof that they’ve been purchased.

4. Write a detailed contract with your contractor at the beginning of the project, so you both know what to expect. Tie payment to work completed.

5. Hold last payment until punch list items are completed.

How do you usually pay general contractors? Have you ever been in a dispute?