Picture this: After living for 5 years in your once-new home, you suddenly felt the need to do some modifications. May it be a kitchen revamp, switching a nursery room to a child’s room, be it simple or a full home-improvement project, it will definitely come with a considerable cost. And what is the perfect scenario in times like this? You might have to increase your budget as far as possible just to achieve a very noticeable change in your home.
In an ideal world, it’s always best to save-up first for your home improvement and work around the amount of money you save up once you start planning your home improvement. However, we all know that this is not always the case. There are cases where we usually go over budget when doing home improvements. Additionally, there are also times when we simply don’t have the money on-hand and resort to swiping your credit card to complete your home improvement purchases.
Okay, we all know that using your credit card for unplanned, high-value purchases isn’t the most ideal. Luckily, there are ways you can actually take advantage of your credit card when improving your home. So, how do you do this? We listed down some tips to make your credit card purchases work towards your advantage.
Buy only what you can afford paying in FULL every month
Keeping your credit card debt close to nothing is always the best scenario. Don’t end up like every average American consumer by getting consumed by mounting credit card debt. Use only your card to charge only what you can afford and make sure to pay your bill in full every month.
Always buy at 0% interest installment payment offers
One simple trick to avoid charging your card with purchases that are above your budget is buying at 0% interest in installment. While this is a pretty basic feature for credit cards, new credit card holders might forget that this is, in fact, a better way to buy big-ticket items.
However, make sure your credit limit is, in fact, big enough to accommodate the total amount of the purchase you’re getting on installment. Depending on your credit limit, this may actually hurt your credit utilization ratio, which is one of the factors that affect a person’s credit score. If you are charging a purchase worth $3,000 on a card with a credit limit of just $5,000, even if it will get credited on an installment basis, this puts your credit utilization ratio at 60%. Once this happens, make sure that you don’t make transactions that will require a credit check as this might have an effect on your credit score.
Choose the right credit card
Don’t just use whatever credit card you currently have in buying your home improvement purchases. If you know that you’ll be spending big in this home improvement project, you might want to try and open a new credit line with a different bank that offers better rewards, has lower interest rates, or provides competitive perks for the cardholders. This is why one it’s important to make sure you have the right card even before starting your home improvement.
Take advantage of credit card rewards and perks
Credits applied to your card doesn’t need to be put to waste. Incentives like a credit card cash back reward program allow some of the amounts you spend to be returned to the cardholder. And it does get more beneficial if payments are done on time and in full every month.
Meet a minimum spend
If you tried getting a new card and actually got approved for one, you’ll probably be qualified for new user promotions that require you to spend a minimum amount to enjoy exclusive freebies and offers. You’ve already signed up for one, might as well use the credit card you have. If you meet the minimum spend every month, it opens a lot of offers in the market. But of course, it is still based on your credit card provider.
Meet annual spend bonuses
As you meet the minimum spend on the card every month, meeting the annual spend can be easily done too. This might help you qualify for exclusive bonuses such as free airline miles, complimentary hotel accommodations or levelling up your status. Apart from that, you might actually save yourself from paying the annual fee on the card if you meet the annual spend.
Consider 0% APR Intro Offers
An introductory APR rate is being given to new credit cardholders which allows them to not pay any interests on their purchases. And sometimes, certain banks do offer 0% introductory APR on purchases for the first 12 months.
This is the perfect opportunity to buy all your home improvement needs should you be able to get a 0% APR intro offer. However, just make sure that you keep an eye on the date it expires and to pay off the full balance way before the promotional period is finished, or you might find yourself paying for interest rates.
Choose Credit Cards with Rotating Bonuses
Credit cards usually set a varying schedule for which types of cash back you could get on your purchases. Make sure to always check with your bank and see what offers they have in store for their customers since there may be times that the category could greatly help you out in your home improvement project.
Surely, doing home improvement could have a noticeable effect on your hard-earned savings. However, it doesn’t mean that these effects cannot be minimized. Indeed, using credit cards can have a number of advantages, when used carefully and wisely. So before postponing your plan in making your living room more comfortable to spend time with your family, why don’t you try these tips first? You’ll be surprised at how much you could actually save while spending.
