Now that spring is here, you might be thinking about tackling home improvement projects. Whether it’s a new deck or a remodel of your kitchen, you’ll need to figure out how to pay for the work. And if you’re taking on these projects yourself instead of hiring a contractor, you may be headed to your local hardware store.
If you’re debating between Home Depot or Lowe’s for supplies, perhaps considering their different financing options may help in your decision-making process. (Before you look for financing options, it’s a good idea to take a look at your credit to see how it’s doing and what terms and conditions you may qualify for. You can check two of your credit scores for free on Credit.com.)
Home Depot Consumer Credit Card
With the Home Depot consumer credit card (which you can read a full review of here), you will receive 0% financing for six months on any purchase of $299 or more. After the promotional period ends, the annual percentage rate (APR) will change to a variable rate of 17.99%, 21.99%, 25.99% or 26.99%, depending on your creditworthiness. There is no annual fee with this card, but it charges deferred interest, calculated from the purchase date if you don’t pay your balance in full by the end of the promotional period.
Home Depot Project Loan
If you need a longer window to pay off your project, especially if you’re doing a large project (think projects like entire room remodels or additions), a Home Depot project loan could be another option. You can borrow up to $55,000 and have up to 84 months to pay off the loan. The first six months are considered a purchasing period during which you only pay interest on the amount borrowed, based on a 7.99% APR. The APR stays the same after this introductory period, but you’ll start to pay off the balance in monthly installments as well.
Why You Might Choose Home Depot Financing
The options at Home Depot and Lowe’s are similar, but there are key differences that could push you in either direction, depending on your preferences. With the Home Depot consumer credit card, there will be times throughout the year when Home Depot offers extended promotional financing beyond the standard six months. Some offers could be as long as 24 months. If you make your purchase during this period, you’ll have more time to pay for your project with no interest.
Lowe’s Consumer Credit Card
When using the Lowe’s consumer credit card there are a few options. You can either elect to receive a 5% discount on your purchase or special financing on purchases of $299 or more. One special financing option is to receive 0% APR for six months. If you go this route you will be charge deferred interest if the balance is not paid by the end of the six-month period. If you think you will need more time, you can choose to borrow for up to 84 months with a fixed 7.99% APR. Just be aware that if you take advantage of the special financing offers, you will not be able to receive the 5% off offer as well.
Why You Might Choose Lowe’s Financing
If you don’t need special financing and just want a discount, the Lowe’s consumer credit card might be the best choice. Because you can earn 5% off every purchase, the overall cost of your project could be considerably reduced.
Alternatives to Home Depot or Lowe’s Financing
If you want to earn rewards for your purchases or extend the 0% APR period, you might want to consider a credit card instead. Here are a couple of options.
Chase Freedom Card
This card allows you to earn rewards on purchases and offers an introductory 0% APR for 15 months on purchases and balance transfers. After the introductory period, the APR will change to a variable 15.49% to 24.24%. When you sign up for the card, you receive a $150 bonus after you spend $500 within the first three months. The card also comes with rotating 5% cash back categories each quarter. There is a limit of $1,500 per quarter on bonuses, which typically include home improvement stores once a year. All other purchases earn 1% back. This card comes with no annual fee.
If you want to boost the time you have to pay off your home improvement project, the Citi Simplicity card might be an option. (Full Disclosure: Citibank and Chase advertise on Credit.com, but that results in no preferential editorial treatment.) With this card, you receive an introductory 0% APR for 21 months on purchases and balance transfers. Once the introductory period is over, the APR changes to a variable 14.24% to 24.24%. This card also comes with no annual fee and will not charge a late fee.
Looking for more ways to spruce up your house? Check out our annual homeowner to-do list.
At publishing time, the Chase Freedom and City Simplicity cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).