Home renovations can increase the value of your home and make it better suited to your preferences. In 2018, the survey polled by LightStream Home Improvement showed that 58 percent of homeowners admit that they had the intention of spending money to improve their homes.
The survey also showed that 30 percent of those homeowners planned to pay for those renovation projects with credit cards.
So, is this a good idea?
The truth is that it is almost a requirement for most home shoppers to take advantage of the convenience credit offers, especially those who cannot pay upfront.
However, even for those home buyers who have the cash at hand, there is a lot of flexibility with credit cards. Credit cards are usually protected against contractor fraud or botched projects, and there are many advantages offered by some credit card companies such as cash back and points.
So, the increasing number of homeowners using credit cards to pay for the renovation of their property is not a surprise, and this trend will continue to increase in the future. Remember that you should not use a credit card unless you can pay the renovation off when the month comes to an end due to significant interest charges.
Funding your home renovation through credit card, is it wise?
The following three factors are essential when making this kind of decision:
- The amount of credit you have.
- Your ability to carry a balance on your card.
- How quickly you will pay off the expense
If you already have debt and an issue with the interest rate you are paying, then this might be a responsibility you should not shoulder. If not, using a credit card for such a significant expense is an excellent way to receive credit card benefits.
What are the Advantages of Putting Home Renovations on a Credit Card?
The two most significant advantages of using a credit card are convenience and immediacy. Furthermore, if house values are increasing fast, it would be ideal to move quickly. However, this would rely on real estate market ups and downs as well as how long you plan to live in your home.
The Disadvantages?
One of the drawbacks is that if you don't make your credit card payments, you could be dealing with an interest rate of 21.99-26.99 percent or more, which will eventually negatively impact your credit score.
Final Thought
Using a credit card can be beneficial if you have the money to quickly take care of the renovation and explore certain advantages such as rewards or doubled warranties.
About the Author
Michelle Plunkett, Associate Broker
It's simple, really. Help people. Each client is unique. Every situation deserves special attention. Each home, neighborhood and community is a perfect fit for someone. Whether you are part of a grieving family settling an estate, 1st time home buyer, Upsizing, simplifying or find yourself starting a new life chapter, I am eager to understand your needs, provide you with options, guide you along and help you to make insightful, shrewd decisions. What journey do you find yourself embarking on? I would love to share the adventure with you - keeping it exciting, fun and rewarding! I am a FULL TIME Realtor - working my schedule to fit with your lifestyle and adapting to your technological abilities. Together we can make it happen! In appreciation for your business and in keeping with the spirit of thankfulness to the community that has supported me along the way, a portion of each commission is donated to charity.
