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When it’s time to move house, remodel or build, significant costs are expected and should be prepared for — both from a personal finance perspective and for the sake of maximizing your rewards. Readers routinely ask us what credit cards are best when it comes time to make a purchase at Home Depot, Lowe’s, Ace Hardware and other home improvement stores. Today I’ll cover several strategies you should investigate when it comes to maximizing your home improvement expenses.

Can I Earn Credit Card Rewards If I Finance Home Improvements?

If you’re looking to refinance or take out a loan for home improvements, you’ll have to make payments directly to your bank. There’s no fee-free way to make those payments with a credit card and earn points. If your financial institution will accept a check, you can use services like Plastiq which typically charge a 1-3% service fee in order to use your credit card and earn points.

The vast majority of the time, the rewards you earn in exchange for the fee aren’t worth enough to warrant the charge, or the margin you come out ahead is so small that it should be avoided. If you’re able to earn enough Plastiq referral credit by having friends, family and coworkers sign up for the service and make a payment using your referral code, you may be able to get a few months of fee-free payments under your belt and earn credit card rewards.

Another thing to consider is the contractor/laborer you use and what payments they accept. In my experience, most do not accept credit card. Margins in the construction business are tight enough without the contractor having to give up 1-3% in merchant transaction fees to a card issuer. What you can do is negotiate to buy the supplies yourself from your home improvement store of choice and at least earn credit card rewards in that manner. If you aren’t comfortable negotiating, have a friend or family member help you along the way so you don’t miss out on potentially huge rewards for your large expense.

Save Money

There are a few money-saving strategies you should consider when it comes time to make your purchases:

  • Discount Gift Cards — You can routinely find the large merchants’ gift cards on sale for a discount on sites like Raise, Gift Card Mall and Cardpool. I’ve seen gift cards for Lowe’s for as much as 15% off during the holidays which, when combined with one or more of the methods listed below, can add up to significant savings. Remember, however, what you give up in return for saving money with discounted gift cards: purchase protection, return protection and extended warranty which are ancillary benefits of a lot of the cards listed below.
  • Shopping Portals — As mentioned here at TPG time and time again, shopping portals should be at the forefront of your mind when it’s time to spend money. Cashbackmonitor.com is my go-to resource for searching multiple portals for Lowe’s and Home Depot. As of publish time, Home Depot had several categories of purchases that qualified for up to 8% cash back at Top Cash Back.
  • Lowe’s Coupons — There seems to be a bottomless well of Lowe’s coupons in the world and many can be picked up from eBay for less than $1.  Remember to separate your purchases into multiple transactions in order to use multiple coupons and stack your savings.
  • Lowe’s Military and Veteran Discount — As of January 1, 2018 the well-known Lowe’s 10% off coupon has moved to the digital age. You need to attach your proof of qualification to your My Lowe’s card either through the automated system on Lowe’s.com or by taking your DD-214 to your local Lowe’s where customer service will take care of you. Scan your card every time you check out and save 10% automatically on almost everything in the store.
home improvement home depot
Home Depot has several categories of purchases that qualified for up to 8% cash back at Top Cash Back. (Photo by @smgu3 via Twenty20A)

Tips for Choosing the Right Card

With a few money-saving strategies covered, let’s look at a few general credit card strategies.

Meet minimum spend — With a large expense on your horizon, you should take the opportunity to evaluate if your loyalty portfolio is missing a card. If so, use the home improvement purchase to quickly knock out minimum spend on one or more new cards and qualify for bonus points.

Meet annual spend bonuses — Taking care of a home isn’t cheap, so make sure to check the cards in your wallet and see if you could potentially hit an annual spend threshold that triggers bonus miles, a companion ticket or status:

Consider 0% APR Intro Offers  — Multiple cards offer an introductory 0% annual percentage rate period which could be better than what a bank is offering. Make sure you can pay off the entire balance before the intro period is over.

  • Chase Slate: 0% intro APR for 15 months from account opening, then a variable APR of 17.24%–25.99%.
  • Chase Freedom and Chase Freedom Unlimited: 0% intro APR for 15 months from account opening, then a variable APR of 17.24 – 25.99% .
  • Discover it® Cash Back: 0% intro APR for 14 months from account opening, then a variable APR of 14.24%-25.24%.

Rotating Bonus Cards — If you have a Chase Freedom, Discover it Cash Back, Discover More or Citi Dividend Card, you should always keep your eye on the quarterly rotating categories to see if a home improvement store is listed. You can also see if you could purchase items typically found in a home improvement store in one of the bonus categories, like Amazon.com or wholesale clubs in order to qualify for the 5% cash-back earnings.

The information for the Chase Slate has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Top Card Picks for Home Improvement Purchases

If you aren’t looking to meet minimum spend or trigger an annual spend bonus, here are some cards that can make sense year-round to use for your home improvement purchases:

Chase Ink Plus (not open to new applicants) and Ink Business Cash Credit Card These are useful for earning maximum Ultimate Rewards on your purchases. The cards earn either 5% cash back or 5x points if you buy Lowe’s or Home Depot gift cards from Staples or OfficeMax/Office Depot. When I want maximum points and am not worried about ancillary benefits like return protection, price protection or extended warranty for my upcoming purchase, I’ll head to the office supply store first.

Chase Freedom Unlimited — Earn more than the minimum 1 point per dollar; boost that by 50% to 1.5% cash back regardless of where you buy your home improvement goods.

Alliant Credit Union Visa Signature Card — The relatively new card earns 3% cash back on all purchases for the first year and 2.5% cash back on all purchases in subsequent years. It’s the highest uncapped cash-back-earning card in the US right now.

Starwood Preferred Guest® Credit Card from American Express — It’s never a bad idea to earn as many of the most valuable loyalty points around as you can. If you’re out of options or don’t have any of the above cards, even though you’ll only earn 1 Starpoint per dollar go ahead and use this card to boost your SPG account.

(Photo by Eric Helgas for The Points Guy)
Earn more than the minimum 1 point per dollar with Chase Freedom Unlimited; boost that by 50% to 1.5% cash back regardless of where you buy your home improvement goods. (Photo by Eric Helgas for The Points Guy)

Bottom Line

Most home improvement projects represent a significant expense and you should do everything you can to minimize the sting of those costs. With the right combination of savings tactics and rewards-earning credit cards, you’ll come out much further ahead than you would by walking into a store and paying cash.

My personal preferences are based on the amount and type of goods I’m purchasing from the store. If it’s a lot of inexpensive goods or basic building supplies, I’ll use a combination of discounted gift cards and the veteran’s 10% discount to save as much money as possible. If it’s an appliance or electronic, I’ll use my Chase Sapphire Preferred Card through a shopping portal to earn maximum points while still getting the extended warranty protection the card offers. The only wrong answer when it comes to your home improvement purchase is doing none of the above.

Featured photo by of Getty Images

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