How To Use 0% APR Credit Cards For Home Renovations | Bankrate

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Bankrate is always editorially independent. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Our Bankrate promise is to ensure everything we publish is objective, accurate and trustworthy.

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Home renovations are a big business, and there’s no sign it’s slowing down soon. Whether you prefer to DIY or hire every project out, the simple fact is that home renovations cost money. In fact, Americans spent an average of $13,667 across 11.1 home projects in 2023, according to research from Angi. Having the cash on-hand to pay for these projects isn’t always possible, which is why homeowners often turn to financing options so it’s easier on the budget.

One option a homeowner might consider is using a credit card with a generous 0 percent introductory APR promotional period for purchases. By budgeting responsibly and paying off what you borrow before the promo period ends, you just might be able to use your credit card as an interest-free loan.

Using a 0 percent APR credit card and paying the balance in full before the promotional period ends can give you the option of stretching out payments over time, while avoiding costly interest charges. But using these cards for renovations comes with risks that include increased credit card use and a date-driven payment obligation in your budget.

Here’s how to avoid some common pitfalls of using credit cards for large purchases like home renovations and home projects:

A card with a no-interest intro period can help you extend out your renovation payments and possibly avoid interest charges, but if that card earns rewards, it can do so much more. The right 0 percent APR card can also allow you to maximize your cash back rewards or points and earn large welcome bonus offers. Here’s what to do if you want a card that provides both lucrative rewards and a strong intro APR offer:

Ryan Flanigan, a credit cards expert and writer at Bankrate, focuses on welcome bonuses and introductory APR offers the most when it comes to maximizing his rewards for home renovations.

A great time to use a credit card is when you’ve got a large purchase that can help you meet a welcome bonus spending requirement. If you can get a 0 percent introductory APR, even better. Finally, if you can rack up rewards on one or more purchases related to your home renovations, you could stand to gain a lot when you use your credit card at the right time.

However, one card isn’t always enough to truly get the most out of a 0 percent APR offer. One card strategy to consider is pairing a credit card with high-value rewards with a balance transfer card. Using this strategy, you could pay for your renovation with a card that doesn’t offer an introductory APR but does offer a lot of rewards, then transfer the balance of that card to one that does.

Brooklyn Lowery, a credit cards expert and senior editor at Bankrate, used this strategy to pay for her kitchen renovation. Here’s how she did it:

Keep in mind: If you are nearing the limit of one or more credit cards by paying for home renovations, the increase in your credit utilization ratio could adversely affect your credit score. However, your score should bounce back once your credit utilization falls back into your usual spending range.

Remember that you might also want this credit card to serve you long after your home improvement project is complete. With that in mind, consider a credit card that offers rewards aligned with your regular spending. If you’re going to be paying for gas, groceries and utility bills anyway, you might as well get something in return.

You may have situations where the fees are too costly to justify using your credit card for a renovation. More contractors accept credit card payments for labor costs, but you have to be conscious of fees they may charge for using a card. If they do charge fees, you can ask your contractor for a list of materials or accompany them to the store so you can charge materials directly to your card of choice.

And while you may be tempted to get a cash advance on your card to cover your home construction project, think twice about the high rates and fees that come with one. Most card benefits (like introductory APRs, welcome bonuses or rewards, for example) don’t apply to your cash advance. You’ll pay interest on a cash advance immediately at a higher APR — no grace period — and the higher APR and cash advance fees can make your purchase extremely expensive.

Also, it’s vital you keep up with due dates for credit card payments. Not only can you face costly late payment fees, but a late or missed payment can result in a penalty APR and losing your 0 percent promotional period, making your home improvement credit card an expensive option if you’re stuck paying the highest APR.

If you depend on low or no-interest APR offers to finance a home improvement project, make sure you can pay off the balance before the promotional APR period ends. Although these offers can easily lead to significant interest savings, it’s important to remember that they don’t last forever. If you don’t pay off the balance before the end of the promotional period, you could end up carrying a balance with a high interest rate.

If you don’t have enough cash to pay off your balance, look into other ways to pay for your home improvements, such as taking on a personal loan or home equity loan. Just be sure to read the fine print so that you understand all fees you face.

$750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.

No welcome bonus

Among the best cards for home improvements are those offering 0 percent APR promotional periods that can save you interest for 15 months or longer. Here are our five top favorites — and one alternative.

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The Citi Custom Cash® Card is a solid card for renovators because home improvement is one of its eligible spending categories. And you won’t have to track or activate any bonus categories to earn top rewards. To maximize this card, use it to purchase all of your home improvement purchases to max out the $500 spending limit each billing cycle and earn the most cash back.

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Although the Discover it® Cash Back may not seem like an obvious choice for a home improvement card, it’s mentioned here because its 5 percent rotating bonus categories often include stores like Amazon, Target and Walmart, all of which can be used to purchase home improvement supplies. It has also previously included home improvement stores as a category. However, Discover announces its bonus categories throughout the year, so this plan requires some flexibility and readiness to act.

It also helps that this card comes with a 0 percent intro APR offer on purchases for 15 months, followed by a 18.24% – 27.24% Variable APR APR , plus one of the best welcome bonuses on the market. With Discover’s Cashback Match, you’ll get double the amount of cash back that you’ve earned in a year. So, if you earned $300 in cash back, you’d get an extra $300 at the end of your first year. This can be especially lucrative if you’re making large renovation purchases with the card.

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If you’re venturing out into the world of real estate investing and renovating a home as part of that process, having a business credit card is a great way to keep your business spending separate from your personal spending. The Chase Ink Business Unlimited® Credit Card offers a flat rate of 1.5 percent cash back with no spending cap — something that can’t be said for most of the other cards on this list. It also comes with a top-notch welcome bonus and a 0 percent intro APR on purchases for 12 months (followed by a 17.49% – 23.49% Variable).

If you don’t mind paying a $95 annual fee, its sibling card — the Ink Business Preferred® Credit Card — offers a similar scaled-up rewards system with a more lucrative welcome bonus, making it a valuable choice for real estate-related businesses ready for the next level in business credit.

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The Wells Fargo Reflect® Card shines because it has one of the longest introductory APR periods on the market at 21 months (followed by a 17.24%, 23.74%, or 28.99% Variable APR). It doesn’t earn rewards, so it’s not the best for someone looking to maximize their points or cash back with a single card, but it’s great for someone who simply wants as much time as possible to pay off their renovation expenses.

The Wells Fargo Reflect is also a strong choice for someone who wants to pair their rewards credit card with a balance transfer card. While the Reflect comes with a 5 percent balance transfer fee (minimum $5), you could offset those costs and more depending on the rewards card you use and the amount of money you spend on your renovation.

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The U.S. Bank Cash+® Visa Signature® Card is ideal for home improvement purchases because it allows you to choose two categories (out of 12) to earn 5 percent cash back on the first $2000 in eligible purchases each quarter. There are several categories to choose from with this card, but options you may consider for home improvement include department stores, furniture stores and even sporting goods stores. These can be great options for kitchen cabinets, new furniture, home decor, household appliances and more. So you’ll continue to get value from this card long after your renovations are complete.

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Although it doesn’t offer a 0 percent introductory APR, the Upgrade Triple Cash Rewards Visa®* is worth mentioning for its 3 percent cash back in a wide number of home categories, such as hardware, home supplies, landscaping, HVAC systems and more. You could be approved for a credit limit as high as $25,000 and get the option to pay your balance in installments, too. This card might serve as a personal loan, particularly if you’re on the lower end of the APR range, which could be ideal for larger home improvement projects.

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There are a few drawbacks to using credit cards for home improvement purchases, such as:

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It’s typically a good idea to use a credit card for home improvement projects since you can take advantage of zero percent promotional periods, welcome bonuses and earn rewards on what may be a significant cost. As long as you’re able to pay down the balance swiftly, the benefits may outweigh the risks for you. However if you’re going into the renovation without knowing how you’ll pay off the balance, then this likely isn’t a good idea.

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There are a few factors you should consider before using a credit card for your home renovation, such as:

Get a clearer picture of what card you should choose by comparing them side by side and plot out your payoff plan with a credit card payoff calculator.

Compare credit cards

Find the right card for your home improvement project.

Credit card payoff calculator

Come up with a repayment plan that’s right for you.

If you’re looking for a renovation credit card that can help you meet your home improvement goals, start with a card offering a 0 percent introductory APR. If you can earn a welcome bonus and ongoing rewards — even better. With one of today’s best 0 percent intro APR credit cards, you could preserve your cash, avoid interest and beautify your home or investment property on a reasonable budget. And if you don’t find a credit card that you want with a long enough introductory APR offer, you could try pairing a high-value rewards credit card with a top balance transfer card instead.

No matter which strategy you choose, just be sure you can pay off your balance before the end of your introductory period so you can avoid paying interest on any remaining balance.

*Information about the Upgrade Triple Cash Rewards Visa® has been collected independently by Bankrate. Card details have not been reviewed or approved by the card issuer. The Bank of America content in this post was last updated on December 9, 2024.

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