Key takeaways

  • Using a 0 percent credit card to finance your home renovations is a risky route to take, but it could make sense in certain circumstances.
  • You should carefully plan and take steps to mitigate risk if you decide to use a credit card for this type of expense.
  • Some credit cards are better than others for financing home renovations, so it may be worth considering one of the top card options to get the most out of what you're spending.

When planning a home improvement project, it may be smart to avoid taking on credit card debt to do it. After all, average credit card interest rates have been climbing, and using a credit card to finance your home renovations could add considerable costs to your renovation budget.

Most people opt for lower-interest options, like a home equity line of credit (HELOC) or a personal loan, for these types of projects instead. But what if those options aren’t a good fit for your situation?

In these cases, you may opt to use credit cards to finance your home renovations instead. While it can be a risky move, there are times when it makes sense — like when you have an introductory 0 percent APR offer, a generous welcome bonus or are earning rewards on your spending. But if you’re planning to go this route, here’s what you should know.

Using 0% APR offers for personal home renovations

A while back, I had the unfortunate experience of having a plumber rod out our bathroom tub only to end up rupturing the pipes and making it unusable. I was already saving up cash to renovate the space, but now it felt necessary to fast-track my plan. Even though I didn’t have all the cash for it, I decided to come up with a way to get it done. I settled on using a credit card.

This bathroom renovation project came to about $8,000. I paid about half in cash, and the rest I put on my Wells Fargo Platinum card* (no longer available), which came with a 0 percent intro APR offer for 18 months at the time (followed by 16.49 percent to 24.49 percent variable APR).

The remaining $4,000 on the card was split between the contractor’s labor costs and materials. It took about seven months to pay down that balance. I got my bathroom done, on credit, with no interest because I paid off the balance well before the end of the intro APR period.

Once I paid the balance off, I didn’t use the card for new purchases since the regular APR kicked in, but I did keep the account open. As a result, I’d get new balance transfer offers from time to time. Some were 0 percent intro APR offers and others were low interest offers, but the offers were still well below the average APR and varied from six to 18 months.

Using 0% APR offers for business projects

At another time, I purchased an investment property to renovate and host guests on short-term rental platforms like Airbnb or VRBO. Once renovations were complete, I needed to add appliances and furnishings. At this point, I already had a couple of business credit cards and decided to add the Ink Business Unlimited® Credit Card to the mix.

This came in handy because, at the time, it offered a $900 welcome bonus when I spent $6,000 within three months of opening the account, plus a 0 percent intro APR for 12 months (18.49 percent to 24.49 percent variable APR thereafter). Both of those features are still offered, and they helped me save money on my purchases and interest expenses. Plus, I was able to rack up rewards for all that spending.

In this case, however, I had a small balance after the intro APR offer expired. Fortunately, I was able to transfer it to my Wells Fargo Platinum, which had another balance transfer offer at that time.

Since then, I’ve used a combination of welcome bonuses, rewards credit cards and 0 percent intro APR offers to help finance personal and business-related real estate projects. If you’d like to use credit cards for home renovations or even a fledgling real estate business, below are some best practices that could help.

How to use credit cards for renovations

There are ideal and less-than-ideal ways to use your credit cards for home improvement or renovation purposes. These tips can help you avoid some of the pitfalls of using credit cards for large purchases like home renovations.

Choose the right card for the right situation

Depending on your project, you should choose a card that offers the features you need. A 0 percent intro APR offer could work if you need more time to pay down a large project over time.

Consider getting a rewards card with a home improvement category like the Citi Custom Cash® Card or the Bank of America® Customized Cash Rewards credit card. Otherwise, credit cards with a welcome bonus with a large spending requirement can come in handy for the large purchases your renovation project might require.

Be mindful of fees

More contractors accept credit card payments for labor costs these days, but you’ve got to be conscious of fees they may charge for using a card. Some smaller outfits may charge an additional fee to use a credit card.

Also, if you decide to carry a balance on a card with a higher APR, you could end up paying quite a bit in interest fees. If prime rates continue to go up, carrying large balances could dramatically increase the cost of your home improvement project.

Know when to use your credit card

A great time to use a credit card is when you’ve got a large purchase that could 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.

That said, using a credit card is not always the best option for big renovation projects. If you are nearing the limit of one or more credit cards, the increase in your credit utilization ratio could adversely impact your credit score.

As noted, using a card for labor may not be the best idea if extra fees are tacked on, but you can certainly use it to cover your materials. You can ask your contractor for a list of materials or accompany them to the store so you can charge materials to your credit card of choice. Another option is to give them an employee card, which is relatively easy to do with many of the best business credit cards.

Finally, you may be tempted to get a cash advance on your card to cover your home construction project, but that can be extremely expensive. Most card offerings won’t apply to your cash advance (for example, a 0 percent intro APR, welcome bonus or rewards), and the higher APR and attendant fees can quickly make your purchase much more costly. Additionally, there’s no grace period for a cash advance, and you’ll be charged interest right away.

Keep good records with your credit card

One benefit of using a credit card is that it can help you keep track of your spending. As a business owner, you’ll always need to keep records of your expenses and income. Even if you don’t have a business, tracking your home improvement expenses will come in handy for tax purposes or when you sell your home.

Fortunately, there are easy ways to connect your card spending to many accounting apps like QuickBooks or Wave Apps. These apps can help you organize and categorize your expenses in a much easier way.

Have a backup plan

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. If not, you could end up carrying a balance with a high interest rate.

If you don’t have enough cash to pay off your balance, try to have other options lined up, such as another balance transfer offer, personal loan or even a home equity loan or line of credit. Keep in mind that while these alternatives may save you money in terms of interest, they can become costly in their own right.

Best credit cards for home renovations

Here are some personal and business credit cards to consider when it’s time to renovate or makeover your spaces.

    • Rewards rate: 5 percent cash back (on up to $500 each billing cycle, then 1 percent) on your top spending category each billing cycle
    • Welcome offer: 20,000 ThankYou points (worth $200 in cash back) after spending $1,500 in the first six months
    • Annual fee: $0
    • Purchase intro APR: 0 percent for 15 months
    • Balance transfer intro APR: 0 percent for 15 months
    • Regular APR: 19.24 percent to 29.24 percent (variable)

    The Citi Custom Cash® Card is a great 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 get up to 5 percent back on your spending (on up to $500 each billing cycle, then 1 percent back). Be sure to put all of your home improvement purchases on the card and aim to max out the $500 spending limit each billing cycle to earn the most cash back.

    • Rewards rate: 5 percent cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year; 2 percent cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year; 1 percent back on all other purchases
    • Welcome offer: $750 bonus cash back when you spend $6,000 in the first three months
    • Annual fee: $0
    • Purchase intro APR: 0 percent for 12 months
    • Balance transfer intro APR: N/A
    • Regular APR: 18.49 percent to 24.49 percent (variable)

    If you’re venturing out into the world of real estate, having access to a line of credit can be a great help to your business. Before that step, a solid business credit card could work in the interim while helping you build business credit. The Chase Ink Business Cash® Credit Card offers high rewards rates on select categories, a top-notch welcome bonus and a 0 percent intro APR on purchases for 12 months (followed by a variable APR of 18.49 percent to 24.49) — all of which could support your spending on renovation, construction and contracting projects.

    If you don’t mind paying a $95 annual fee, this card’s sibling, the Ink Business Preferred® Credit Card, offers a similar scaled-up rewards system and welcome bonus. This is a great choice for real estate-related businesses ready for the next level in business credit.

    • Rewards rate: 5X points on flights and prepaid hotels booked with AmexTravel.com; 1.5X points on up to $2 million per year on eligible purchases in key business categories (including U.S. construction material and hardware suppliers; electronic goods retailers; software and cloud system providers; and shipping providers); 1.5X points on eligible purchases of $5,000 or more (on up to $2 million per calendar year); 1X points on other eligible purchases
    • Welcome offer: 120,000 Membership Rewards points after you spend $15,000 on eligible purchases within the first three months of card membership
    • Annual fee: $695
    • Purchase intro APR: N/A
    • Balance transfer intro APR: N/A
    • Regular APR: 20.99 percent to 29.99 percent (variable Pay Over Time APR)

    The first thing you might notice about The Business Platinum Card® from American Express is the hefty $695 annual fee. Although there’s a substantial carrying cost for this card, it offers a great slate of benefits, such as a welcome offer worth up to $1,620 through American Express Travel (with the 35 percent Airline Bonus redemption value). Then, there are numerous annual statement credits, benefits and travel perks like up to $200 in statement credits per year for qualifying airline fees, up to $400 in statement credits per year on Dell purchases, airport lounge access and much more.

    However, the biggest plus is that you can earn 1.5X on construction materials and hardware supplies on up to $2 million per year. This card is a great choice for a serious real estate investor who has many construction projects throughout the year.

    • Rewards rate: 3 percent cash back on home, auto and health purchases; 1 percent cash back on all other purchases
    • Welcome offer: Earn a $200 bonus after opening a Rewards Checking account and making 3 debit card transactions within 60 days
    • Annual fee: $0
    • Purchase intro APR: N/A
    • Balance transfer intro APR: N/A
    • Regular APR: 14.99 percent to 29.99 percent (fixed)

    The Upgrade Triple Cash Rewards Visa®* offers 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 more like a personal loan, particularly if you’re on the lower end of the APR range, which could be ideal for larger home improvement projects.

    • Rewards rate: 5 percent cash back on activated bonus category purchases each quarter (on up to $1,500 in purchases, then 1 percent); 5 percent cash back on Chase Ultimate Rewards travel purchases; 5 percent cash back on Lyft rides (through March 2025); 3 percent cash back on dining and drugstore purchases; 1 percent cash back on all other purchases
    • Welcome offer: $200 cash bonus after spending $500 within your first three months
    • Annual fee: $0
    • Purchase intro APR: 0 percent for 15 months
    • Balance transfer intro APR: 0 percent for 15 months (balance transfers must be made within the first 60 days and an intro balance transfer fee of 3 percent (minimum $5) applies)
    • Regular APR: 20.24 percent to 28.99 percent (variable)

    Although the Chase Freedom Flex℠* 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. Keep in mind that Chase 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 welcome bonus and a 0 percent intro APR offer for 15 months (followed by a variable APR of 20.24 percent to 28.99 percent). These features, coupled with its rewards rates, could help you save significantly on any home improvement project.

The bottom line

If you’re looking for a credit card that can help you accomplish your home improvement goals, starting with one that offers a 0 percent introductory APR can help. If you can earn a welcome bonus and ongoing rewards — even better. With the right credit card, you could preserve your cash, avoid interest and beautify your home or investment property on a very reasonable budget.

*The information about the Wells Fargo Platinum card, Upgrade Triple Cash Rewards Visa®, and Chase Freedom Flex℠ has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

**Credit Lines opened through Upgrade feature Annual Percentage Rates (APRs) of 14.99% – 29.99% and line amounts ranging $500 – $25,000. Optional ACH transfers to your bank account, balance transfers, and foreign transactions are subject to fees that, if incurred, will increase your finance charge and APR. The lowest rates require Autopay and the majority of the line amounts will be $15,000 or under. For example, a $5,000 transaction with a 36 month term and a 19.99% APR has a required monthly payment of $187.90. The APR on your transaction may be higher or lower. Your rate, line amount, and default term depend on maintaining a qualifying credit score, your credit usage history, requested amount, and other factors. The Upgrade Card is unique in that it allows you to obtain a series of closed-end loans which you may access through transactions such as card purchases up to the approved line amount. As you repay your balance, additional credit may become available to you up to the approved line amount subject to meeting our credit requirements. The Upgrade Card will not replenish as it would in an open-end credit arrangement.