Are you spending on home improvements? How a credit card can help

For more than a year after moving into her new home, Andrea Woroch, a consumer savings expert, had her eye on what she thought was the perfect six-light chandelier for her entryway. The metal and oak light fixture was also sold with a hefty price tag: $ 599.

So she waited for it to go on sale for $ 200 off, then made the purchase with the cash rewards she had accumulated on her. Bank of America® Customized Cash Rewards credit card. “Even though I have enough cash in my savings account to cover this cost, I considered it an unnecessary purchase and therefore only justified buying it if I got it for free with my rewards,” he says. it.

Home buying season – which is now upon us – also tends to be the home improvement season of choice, whether for the seller or the buyer. Using credit cards strategically can help you offset the costs of improving your home.

Invest in home improvement

Americans tend to spend a lot on their homes: 2018 Home Report NerdWallet Improvement found that 85% of homeowners say their home is their biggest investment. While 52% said they were able to easily pay for their recent home improvement projects, 20% said they had to make sacrifices in other areas and 13% took on debt for the projects.

This is where credit card rewards can help. By using credit cards for daily expenses, homeowners can accumulate rewards and use them for home-related purchases.

Use credit cards strategically

Credit card rewards can help cover renovation costs both on the front-end (earning rewards or discounts in advance on renovation purchases) or on the back-end (using your rewards collected to “erase” purchases, as Woroch did).

Here are other ways to use credit cards to help offset the cost of home improvement expenses:

1. Reward yourself when you renovate

Woroch used the rewards she had amassed to mainly reimburse herself for her chandelier purchase. But another way to cut those costs is to make the purchase with a credit card that gives you rewards or discounts on the renovation expenses you make.

Woroch’s Bank of America® Customized Cash Rewards credit card is a good example of such a card. With it, you can select a 3% Cash Back category from a list of six, and one of those categories is “Home Improvement & Furnishings,” which includes a wide variety of expenses like Home Depot purchases, plumbers, landscapers and florists.

The card also offers 2% cash back on grocery stores and wholesale clubs and 1% on everything else. (There is a combined spending limit of $ 2,500 each quarter for the 2% and 3% categories.)

Another card, the Visa Signature® US Bank Cash + ™ card, offers 5% cash back (up to $ 2,000 in combined purchases per quarter) on two bonus categories of your choice, from a list of a dozen. As of March 2020, those categories included department stores, home utilities, and furniture stores – all of which could come in handy for home improvement spending. The card also offers 2% off an everyday category like gasoline, groceries or restaurants, and 1% off everything else.

2. Take advantage of signup bonuses

If you are applying for a new card, some offer signup bonuses – typically around $ 150 to $ 200, once you hit a required spending threshold over a period of a few months. And you can spend that “free money” on home improvement purchases.

the Bank of America® Customized Cash Rewards credit card and the Visa Signature® US Bank Cash + ™ card both offer healthy signup bonuses, as do many other cash back credit cards from major issuers.

3. Evaluate store cards

If you plan to spend a significant amount of money at a particular store to beautify your home, you may want to consider getting that store’s co-branded credit card. Many of these cards can reward Loyalists handsomely:

  • the Lowe Advantage Card, for example, offers 5% off qualifying Lowe purchases.

  • the IKEA® Visa® credit card offers 5% off Ikea purchases (plus 3% off meals, groceries and utilities, and 1% off other purchases).

  • the Amazon Prime Rewards Visa Signature Card offers 5% off on Amazon and Whole Foods (and 2% back on restaurants, gas stations and drugstores, plus 1% on everything else).

  • the Capital One® Walmart Rewards ™ Mastercard® offers 5% off on Walmart.com and purchases through the Walmart app; 2% discount on in-store and restaurant purchases and on travel purchases; and 1% on everything else

4. Use a 0% intro APR finance offer

If you want to spread your payments for a purchase over several months, you may want to consider requesting a card that offers an introductory APR period of 0%, which can save you money on interest.

Store branded credit cards tend not to have such promotional windows, but many general rewards credit cards do. Just make sure you pay off the balance before the offer expires and the annual rate increases.

Using these types of strategies can make investing in home improvement more affordable and can make you feel happier at home. As Woroch says, “We installed the new light … and I’m in love!”

This article was written by NerdWallet and was originally published by Forbes.

Information relating to Amazon Prime Rewards Visa Signature Card and the Amazon Rewards Visa Signature Card was collected by NerdWallet and has not been reviewed or provided by the issuer of this card.


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