Spring is a time when residential contractors and big-box retailers of home goods are often their busiest. One of the main reasons is that homeowners are also at their busiest, updating their residences with a bevy of improvements that range from adding rooms to remodeling existing spaces. For many, the improvements are purchased with a home improvement credit card, or with a general credit card used as such.
As everyone knows, paying with credit is a double-edged sword. It makes it easy to get what we need. However, if we overspend, we could eventually find ourselves needing to pursue debt relief help. Considering that too much debt is always a potential risk, are credit cards really a good way to finance spring home improvements, or should spending on credit be a less preferred option to other methods of purchase?
Credit Card Home Improvement Spending
Now that spring is here again, many homeowners will be making considerable investments to optimize domestic spaces. Before doing so, they’ll be looking for how to pay for home renovations in the simplest and most financially stable way. For many, the path of least resistance is to use a credit card, as they classically “buy now and pay later”, purchasing what they need with a swipe of plastic, and then settling the balance when the bill arrives in a few weeks.
Because homeowners’ ability to pay credit card debt varies widely, there is not a clear-cut answer. However, there are smart credit card practices that can benefit you this spring. With this in mind, let’s look at those practices that can help you use a home improvement credit card wisely.
Home Improvement Credit Card Spending Tips
For those who take pride in their home, spring home renovations are an exciting prospect — so much so, that how to pay for home renovations purchased with a credit card can be an afterthought to making the renovations. Here are four helpful tips to help you avoid overwhelming debt:
Designate a Card for Home Improvement
It’s common knowledge that one of the best ways to avoid insurmountable credit card debt is to carry as few open lines of credit as possible. However, those who follow this rule often end up with fewer credit cards with high spending limits that essentially equate to having a greater number of cards with lower spending limits. This, in itself, is not a problem. Rather, the issue is that the few cards they have are used to make a wide variety of purchases, including home improvements.
When you use just a few cards to purchase many things, it’s easy for the monthly balance due to quickly increase. For example, using between one and three cards to make monthly car payments, utility payments, a mortgage payment, and then paying for a major home renovation, too, could potentially rack up multiple thousands of dollars in debt, in just a month. Before you know it, you have a whopping bill that seems impossible to pay and may need professional credit card debt settlement services to help alleviate your financial burden.
When it comes to paying for home renovations, one way to avoid insurmountable debt may be to designate a single credit card for making the improvements and paying it off as soon as possible, before the interest builds up. In fact, using a dedicated home improvement credit card makes it easier to track spending, thus making it simpler to see what you can afford on credit and what it may be better to pay for out of pocket.
Consider Applying for a Better Credit Card
Another factor of credit card debt are the terms and conditions of the cards you use. While nearly all credit cards are considered to have high interest rates, some are considerably higher than others. Because home renovations are generally high-dollar purchases, you naturally want to make them with a card that offers the lowest available interest rate.
If you lack a card that has an impressively low interest rate, consider applying for one. Depending on renovation cost, a new home improvement credit card with commendable terms and conditions could save you big money.
Perform DIY Projects When Reasonable
A third way to minimize the cost of home improvements is to make them DIY projects, if you have the skills to do the work. Hiring a contractor is similar to paying a professional mechanic to service your vehicle: much of the cost goes toward labor.
Because your home is likely one of the most valuable assets you own, however, you definitely don’t want to perform DIY improvements that exceed your ability to perform the work properly. Doing so could result in needing a contractor to repair mistakes, which could incur greater expense than having hired a contractor in the first place. However, if you can skillfully handle the work, paying for materials and not labor presents a significant cost-saving opportunity.
Thoroughly Explore Cost Comparisons
Whether you use a home improvement credit card to pay for materials you install on your own, or you hire a contractor to do the job, simply “shopping around” to compare prices can reduce your expenses by a meaningful margin. Contractors and retailers often run “spring specials” that cater to a time of year when home improvements are commonly made. Being a smart shopper of these opportunities helps make you a shrewd credit card user.
Smart Spending can Prevent the Debt Trap
If your choice for how to pay for home renovations is a home improvement credit card, the tips here can help you make the renovations you need, without incurring excessive credit card debt that you obviously don’t want. However, if you happen to accrue debt and end up in serious financial hardship that necessitates a special payment arrangement, contact Liberty Debt Relief for a free consultation. We can help you select and implement a debt relief strategy to get you back on track financially.
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