Home renovations can be exciting, but also expensive. Utilizing a credit card strategically can help manage these costs, offering rewards, financing options, and purchase protection. Choosing the right credit card for your home renovation project can significantly impact your budget and overall financial well-being.
Credit cards offer a convenient way to finance home improvements, but it's crucial to select one that aligns with your spending habits and renovation goals. This guide will explore the best credit card options for home renovation projects in 2024.
| Credit Card | Key Benefits | Drawbacks |
|---|---|---|
| Chase Freedom Unlimited | 1.5% cash back on all purchases, including home renovation expenses.Introductory 0% APR for 15 months on purchases and balance transfers. No annual fee. | The 1.5% cash back is decent, but not the highest available. Balance transfer fees may apply. |
| Citi Double Cash Card | 2% cash back on all purchases (1% when you buy, 1% when you pay). No spending categories to track. Low balance transfer fee. | No introductory 0% APR period. The cash back is received only after paying off the balance. |
| Discover it Cash Back | Rotating 5% cash back categories, often including home improvement stores. Introductory 0% APR for 15 months on purchases and balance transfers. Cashback Match - Discover will automatically match all the cash back you’ve earned at the end of your first year! | The 5% categories rotate and require activation. After the first year, the cash back return on general purchases is lower. |
| Wells Fargo Active Cash Card | 2% cash rewards on purchases. $200 cash rewards bonus after spending $1,000 on purchases in the first 3 months.Introductory 0% APR for 15 months from account opening on purchases and qualifying balance transfers. | The 2% cash back is good, but not the absolute best available. Balance transfer fees may apply. |
| Home Depot Consumer Credit Card | Special financing options on purchases of $299 or more (subject to credit approval). Exclusive offers and discounts. One year to return purchases. | High APR if not paid within the promotional period. Can only be used at Home Depot. May encourage overspending at a single retailer. |
| Lowe's Advantage Card | 5% off eligible purchases. Special financing options available. No annual fee. | Can only be used at Lowe's. High APR if not paid within the promotional period. Discount is relatively small compared to potential cash back rewards from other cards. |
| U.S. Bank Altitude Reserve Visa Infinite Card | 5x points on prepaid hotels and car rentals booked directly in the Altitude Rewards Center, 3x points on eligible travel and mobile wallet purchases, 1x point on all other eligible purchases. $325 annual travel credit. | High annual fee ($400, effectively $75 after travel credit). Strict approval requirements. |
| American Express Blue Cash Preferred Card | 6% cash back at U.S. supermarkets (on up to $6,000 spent per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and transit, and 1% cash back on other purchases. | Annual fee ($0 intro for first year, then $95). The high cash back rates are limited to specific categories. |
| Capital One Venture Rewards Credit Card | Earn unlimited 2x miles on every purchase, every day. Earn 5x miles on hotels and rental cars booked through Capital One Travel. | Annual fee ($95). Miles are best redeemed for travel. |
| Bank of America Customized Cash Rewards Credit Card | 3% cash back in a category of your choice (including home improvement), 2% cash back at grocery stores and wholesale clubs (on up to $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then 1%). 1% cash back on all other purchases. | The 3% category selection requires active management. The spending cap limits the earning potential in the bonus categories. |
Detailed Explanations
Chase Freedom Unlimited: This card offers a straightforward 1.5% cash back on all purchases, making it a simple option for tracking expenses and earning rewards on your entire renovation project. The introductory 0% APR period can be beneficial for spreading out payments over time, saving you on interest charges. However, the cash back rate is not the highest compared to category-specific cards.
Citi Double Cash Card: The Citi Double Cash Card provides a flat 2% cash back on all purchases (1% when you buy and 1% when you pay). This simplifies earning rewards, as you don't have to worry about rotating categories or spending limits. The lack of an introductory 0% APR period might be a drawback if you plan to carry a balance.
Discover it Cash Back: This card features rotating 5% cash back categories, which often include home improvement stores. This can provide significant savings during specific periods of your renovation. However, the categories change quarterly and require activation, so you need to actively manage the card to maximize rewards. The cashback match is a significant benefit in the first year.
Wells Fargo Active Cash Card: This card provides a flat 2% cash rewards on purchases. You also get a $200 cash rewards bonus after spending $1,000 on purchases in the first 3 months. This card also offers an introductory 0% APR for 15 months from account opening on purchases and qualifying balance transfers.
Home Depot Consumer Credit Card: This card offers special financing options on purchases of $299 or more at Home Depot. This can be advantageous for large purchases like appliances or lumber. However, the high APR after the promotional period can be costly if you don't pay off the balance in time. This card is only usable at Home Depot.
Lowe's Advantage Card: Similar to the Home Depot card, the Lowe's Advantage Card provides 5% off eligible purchases and special financing options at Lowe's. This can be beneficial if you frequently shop at Lowe's. However, the card is limited to Lowe's purchases and carries a high APR after the promotional period.
U.S. Bank Altitude Reserve Visa Infinite Card: This premium card offers 5x points on prepaid hotels and car rentals booked directly in the Altitude Rewards Center and 3x points on eligible travel and mobile wallet purchases. While it comes with a high annual fee, the $325 annual travel credit can offset some of the cost. This card is best suited for those who travel frequently and can maximize the travel credit and bonus points.
American Express Blue Cash Preferred Card: This card offers high cash back rates in specific categories, including 6% at U.S. supermarkets (on up to $6,000 spent per year, then 1%), 6% on select U.S. streaming subscriptions, 3% at U.S. gas stations and transit. If you spend a significant amount on these categories, this card can be very rewarding. However, the annual fee and the spending cap on the supermarket category should be considered.
Capital One Venture Rewards Credit Card: This card offers a simple and straightforward rewards structure, earning unlimited 2x miles on every purchase, every day. It also offers 5x miles on hotels and rental cars booked through Capital One Travel. The miles are best redeemed for travel, making it a good option for those who travel frequently.
Bank of America Customized Cash Rewards Credit Card: This card allows you to choose a 3% cash back category, including home improvement, and earn 2% cash back at grocery stores and wholesale clubs (on up to $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then 1%). This can be a good option if you spend a significant amount in your chosen category. However, the spending cap and the need to actively manage the category selection should be considered.
Frequently Asked Questions
What is the best type of credit card for home renovation?
The best type depends on your spending habits and financial goals. Consider cards with 0% APR introductory periods, cash back rewards, or special financing options at home improvement stores.
Should I use a store-specific credit card for renovations?
Store-specific cards can offer discounts or financing, but they are limited to that store. Consider a general rewards card if you want more flexibility.
What is a 0% APR introductory period, and why is it important?
A 0% APR introductory period means you won't be charged interest on purchases for a set time, making it easier to pay off your renovation costs.
How can I maximize rewards on my renovation spending?
Choose a card with bonus rewards in categories relevant to your renovation spending, such as home improvement stores or general purchases.
What are the risks of using a credit card for home renovation?
High APRs can lead to significant interest charges if you don't pay off the balance quickly. Overspending can also lead to debt.
How do balance transfers work, and are they beneficial?
Balance transfers involve moving debt from one credit card to another, often with a lower interest rate. This can save you money on interest charges.
What credit score is needed to qualify for the best renovation credit cards?
Generally, a good to excellent credit score (670 or higher) is required to qualify for the best rewards and 0% APR credit cards.
Are there any annual fees associated with these cards?
Some cards have annual fees, while others don't. Consider the annual fee when evaluating the overall value of the card.
What is the difference between cash back and travel rewards?
Cash back provides a direct monetary return on your spending, while travel rewards offer points or miles that can be redeemed for travel expenses.
How do I choose the right credit card for my situation?
Assess your spending habits, renovation budget, and financial goals. Compare the features and benefits of different cards to find the best fit.
Conclusion
Choosing the right credit card for your home renovation can save you money through rewards, financing options, and purchase protection. Carefully consider your spending habits and renovation goals to select the card that best aligns with your needs and helps you manage your project's costs effectively.