Unless your credit cards carry a very low interest rate or offer promotional financing, a personal loan to pay for renovations may be a better bet. Again, though, you’ll be tied up in making interest payments, and that’s what we’re hoping to avoid — or at least minimize. Keep reading to learn more about better options.
0% intro APR interest
Make a list of the credit cards you currently hold. One by one, log into your online account and look for any current, special offers. While credit card issuers frequently advertise a 0% introductory APR on everyday purchases to lure new customers, some card issuers offer the same intro 0% APR rate to current customers willing to transfer a balance from another credit card. If one of your existing cards is making this offer, you may just have found the way to finance home renovations without paying interest. Here’s how you can do it:
- Decide which credit card you’ll use to make the initial purchase. We’ll call this “Card No. 1.” Double check to ensure the spending limit is high enough on this card to cover the expense.
- Check the spending limit on the card offering the 0% balance transfer. We’ll call this “Card No. 2.” The limit on Card No. 2 needs to be high enough to cover the amount you want to transfer and the balance transfer fee (typically between 1% and 3% of the amount transferred).
- Make home improvement purchases using Card No. 1.
- Once the purchases posts to Card No. 1, transfer the balance to Card No. 2.
- As long as you pay the card off in full before the promotional period expires, you’ll be able to make a significant purchase without spending any of your hard-earned cash on interest.
Because most intro APR periods range from 12 to 18 months, you have that long to pay it off without incurring interest. For example, if your balance is $15,000 and you have an 18-month promotional period, monthly payments of $833 would ensure the debt is paid in full, and you won’t owe any interest.
The savviest way to use a credit card is to make sure you get more from the credit card than the credit card issuer gets from you. Credit card companies make their money through the interest you pay and charging things like an annual fee.
Let’s say you own a business and fly to visit customers or have family living far away and board a flight each time you want to see them. The best …….