Spring Home Improvements and Credit Card Debt

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.

What Does the Process of Settling Credit Card Debt Look Like?

Credit cards can be a great help when you need some extra spending power. However, the buy now, pay later proposition of credit cards gets many people into a financial jam when it comes time to repay their creditors. Consequently, many people carry a balance on their card that grows ever larger, until credit card debt settlement may be the best solution. In fact, settling credit card debt is one of the most common financial processes in the U.S.

Because most credit cards carry a high interest rate, repaying thousands of dollars in a timely manner often requires debt negotiations. If you are in a position where you need to pursue credit card settlement with the assistance of a credit consultant, below is a step-by-step process of what settling credit card debt is likely to entail.

1. You Provide Proof of a Serious Financial Hardship & Other Necessary Documents

A financial hardship is likely what is keeping you from being able to make large debt payments on time and constantly. That’s why, before receiving debt relief assistance, you may be required to provide evidence of a financial hardship. This may include proof of income via pay stubs or W2s and proof of outgoing bills, including a mortgage, car loan, hospital bill, utilities, and even debt repayments.

When seeking debt settlement services, you may want to also bring your credit report with you or have your consultant get ahold of it for you. This is a great tool for you and your debt consultant to use to build your case for why you need to negotiate your debt. In addition to showing the details regarding all your different debts, our report could include evidence of credit delinquency, such as unpaid debts or consistently late payments, that lenders will take notice of and may want to resolve through a settlement.

2. Your Debt Consultant Proposes a Settlement Amount

Based on the amount of debt you carry, as well as how much money you will be able to put towards your credit card debt settlement repayment, your credit consultant will approach your creditor to propose a settlement amount. This could be up to half of what you originally owed, but it’s important to have a range of what you can reasonably afford to pay, complete with a high and a low end.

Because of your financial hardship, many lenders are willing to accept a portion of what you owe. It allows them to collect some of the debt, rather than none at all. Moreover, when choosing a debt consultant, find one who has a great working relationship with various creditors. Their experience may help your lenders trust the outcome of the negotiations and make them more willing to agree to a new debt amount.

3. The Money You Owe Creditors is Put into an Account

The money that is needed for your settlement may be collected from you gradually and put in a secure account. It could be your normal savings account, or it may be a new one that is proposed and set up by you and your debt consultant. Remember, you should always have access to that money, no matter where it’s kept safe.

After that, you and your debt consultant may set up a payment plan with your lenders that will automatically occur either monthly or all at once, depending on the agreed-to terms. This distribution process means you don’t have to worry about remembering to make regular payments or about being late.

4. You May Need to Pay Taxes on the Money Saved

Depending on how much you originally owed and how much you end up settling your credit card debt for, the IRS may recognize the amount of money you saved via negotiations as taxable income. It also depends on how much you funneled into your special debt account and how long it sits in the account. In most cases, the taxes are minimal. However, if the money sits in the account for a year or longer, paying taxes is a likely reality. With that said, the amount you are likely to pay in taxes is probably worth settling a debt that would cost you far more in the long run.

5. Pay the Required Debt Consultant Fees

Debt specialists typically don’t work for free. However, the fees that they charge are sensitive to the fact that those whom they help are in a difficult financial position. It is likely the amount they charge will be based on a percentage of the settlement amount. The good news is that a debt consultant should let you know upfront exactly how much they will charge, so there is no guesswork involved. More importantly, it is against the law for any debt relief company to charge for their services before they actually provide you with help.

6. Start Paying Back the New Amount Owed

Now that you and your consultant have proven why you need assistance, determined how much you can reasonably pay back on the amount you owe, and gotten your lenders to agree to the new amount, you can start the repayment process. After debt settlement negotiations, creditors will expect your payments on time.

If you didn’t set up a separate account with automatic disbursals, as discussed above, you’ll have to remember to budget carefully and have the amount due each month by the specified date. Late payments on a negotiated amount will incur serious late fees and could cause your lender to distrust you and pull back on the agreement.


Settling a credit card debt often involves several unique steps like these, which a credit consultant can apprise you of. Your settlement process may happen precisely according to this list, or it may involve fewer steps of a different nature. To get started on credit card debt settlement, please contact Liberty Debt Relief today to schedule a free consultation.