HOG home remodelling on your credit card

Remodeling and renovating a house can be expensive. According to Home Advisor, a person can spend an average of $10,946 for a bathroom remodel. On the other hand, kitchen remodeling can take as much as $14,864. While this is the case, improving your house can provide comfort and increase resale value.

Renovations are usually funded using bank loans, home equity loans, or your own savings. Recently, in a 2018 study, more homeowners are using credit cards to finance home renovations.

Using credit cards for home renovations makes it easier and convenient. However, Because credit cards can be an expensive way to borrow money, sensible homeowners should think about a few things before putting the expenses of renovations on a credit card.

A Good Credit Score Helps Finance Your Home Improvement

Using your credit cards for purchases allows you access to numerous benefits. However, this can only happen if you have built a good credit score.

Before using your credit card to pay for home renovations, make sure you have a good credit score. Credit scores are calculated using two popular scoring systems: FICO and VantageScore. The basis for a good credit score depends on which scoring system is used to calculate your score.

If your score isn’t good enough on either of these scoring systems, it’s not a good sign. Having a bad score means your loans won’t get approved. You can get a bad credit score in different ways. 

One example is not paying your debts on time. When this happens, your debts will be moved to collections, and it will negatively reflect on your credit report. If you believe that this is a mistake, don't worry. There are ways that help you remove collection accounts from your credit report

The Fair Credit Reporting Act allows you to send disputes directly to your creditors. You can just simply file a dispute on their websites. Or you can get help from credit repair companies to do the dispute for you. 

When the credit bureaus find that they are indeed incorrect, they will remove the account. If not, it can stay for up to seven years. Removing the account can improve your credit score. The reason is that your payment history is one of the major factors that influence your score.

Why Use a Credit Card to Finance Your Home Renovation?

Photo by RODNAE Productions from Pexels

Using a credit card to pay for a home renovation is a good financial move. A card with a promotional interest rate is helpful in the long term if you can pay off the debt promptly. You can also save money by using credit cards with discounts or cashback.

Here are other reasons to use a credit card to charge for home improvement expenses.

1. You Can Get the Home of Your Dreams Immediately

People renovate their houses because they want a more comfortable place to live in. Paying in cash is good if you have already saved up money for renovation costs. However, you know how difficult it is to save money for home renovation.

Sometimes, emergencies occur and your home improvement savings get used. Now, you need to save up again, wondering when you’ll be able to achieve the home of your dreams.

With a credit card, you can immediately have your house renovated and worry about the costs later. Convenience is the main advantage of using your credit card for home improvements. 

2.There Is Increased Promotional APR Offers

More people are using credit cards. That’s why credit companies are finding ways to stay competitive in the market. Many cards are now offering 0% initial APRs for as long as 18 months to attract new customers. 

These offers are an excellent way to spread out a large purchase over several months. You won't have to pay any interest on your amount if you pay it off before the initial APR expires.

3.You Can Get Rewarded

Most credit cards have 1% to 2% cashback offers on purchases. However, you can get bigger rewards by signing up for a new credit card. 

For example, you can get a bonus by spending a specific amount in the first 90 days after signing up. And you can receive this either in cash or travel value. 

Using the new credit card for your home improvements means spending a lot of money. By doing so, you can easily meet the minimum spending criteria for a sign-up bonus. You can charge the expense of a remodel on a high-end travel card. And, in return, you can get enough points to take a vacation while they work on the renovation.

4.You’re Given 30 Days to Pay Off Your Balance

Your bill won't be due for at least 30 days after you make your transaction. This is one of the good things about credit cards. As long as you pay your bills in full every month, you won’t get any interest for 30 days.

5.You Can Build a Good Credit History

Using credit cards for home renovation boosts your credit utilization rate. And because of this, your credit history also improves.

Credit cards allow you to create a credit line. It’s beneficial since it allows banks to see your active credit history. This is based on your credit card repayments and utilization. Credit card usage is used by banks and financial organizations to assess your creditworthiness.

Factors to Consider Before Using Your Credit Card For Home Remodeling

Credit cards make significant house purchases appear more attainable in the short term. However, they can be a very costly way to spend money in the long run. That’s why you need to be completely sure that you’re using your credit card for house improvements.

To help you decide, here are some factors for consideration.

6.Retail Credit Cards

If you plan on a DIY renovation, a store-branded credit card can help you save money. This also applies if your renovation project requires new furniture and appliances.

Some cards provide long grace periods without interest or exclusive offers to cardholders. Despite that, store-branded credit cards have their own disadvantages. As an example, they usually offer delayed interest. And this is different from a 0% APR.

Cards with delayed interest work like this. The remaining balances at the end of the promo period will be subject to an interest charge. And this is equal to the amount of interest that has accumulated during that time. 

For example, you charged $10,000 but only owe $100 when the deferred interest promotion expires. The interest will be charged on the entire $10,000. This wipes out whatever savings you could have gotten when you first opened the account.

7.Your Credit Score

If you apply for a new credit card, this can temporarily lower your credit score. Make sure you don’t plan on applying for loans in the next six months before charging huge expenses. You need to allocate enough time to rebuild your credit score. And you can do this by making on-time payments and using your credit responsibly.

8.Settling Payments Before the Promo Period Ends

People with a credit card that offers zero interest should pay off their debt before it expires. Such credit cards can be used as interest-free loans. Although, this can only work if the balance is fully paid by the end of the period. Unpaid amounts can quickly accumulate.

During the renovation, you can’t avoid hidden expenses. What you can do is to have a complete budget as much as you can at the start of your renovation project. After that, determine how much you’ll be paying monthly to pay off the balance. You need to make sure that you paid it off by the time the introductory period ends.

However, there are cases where paying off the debt isn't an option. During these times, you'll have to carry some fees beyond the promo period. It’s advisable that you use a card with a 0% APR rather than one that charges delayed interest.


People renovate their houses because of two reasons. One is they want to increase their house’s value, and the other is to improve its livability. Using a credit card to pay off expenses is a convenient way of achieving these goals. 

However, before using your credit card, you need to check your credit score first. A good credit score provides you with more chances of getting approved for a loan. A bad credit score, on the other hand, does not. Despite this, there are ways that you can repair your credit score.

Aside from convenience, credit cards provide numerous benefits for using them. While this is the case, you need to know when you can use your credit card for home renovations. If you only need smaller purchases, then a credit card is the ideal method for you.

 Authors Bio: Dan Martin

 Daniel Martin loves building winning content teams. Over the past few years, he has built high-performance teams that have produced engaging content enjoyed by millions of users. Dani also enjoys photography and playing the carrom board.

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