Is there any reason not finance home improvements with a 0% credit card?

[Anonymous]

Need about $45K of home improvements (electrical and bath). Would rather not spend this all at once in cash. Is there any reason not to put this on a 0% interest card for 18 months and then pay a 3-4% fee to move it to another 0% interest card? While paying it down at a rate of $1000/month.

[Anonymous]

Adding my credit score is 780 and my current credit limit on my one and only card is $40K.

[Anonymous]

Also, I am mortgage free, paid off my car, have no consumer debt, and only debt is $90K in student loans at 2.7 fixed that my employer is paying off at a rate of $10K/year.

[Anonymous]

This is fine if you don’t need any kind of other loan any time soon.

[Anonymous]

Life can happen. You could do this, your financial situation changes, and once the interest-free year is up you are stuck with $45k of debt at 29.99% APR.

I would only do it if my income was quite stable and I was definitely able to pay it off within the 0% term.

You could also get to the end of the term and due to economic changes there aren’t any credit card companies willing to transfer such a large balance at a 0% rate.

If you have individual credit cards with $40k credit card limits you probably have a decent income—I would suck it up and save for 12-18 months to pay cash for this type of reno.

[Anonymous]

Are you saying you have the cash and don’t want to spend it? If so, then maybe put some of it (anything that’s a safety issue) on a card and make sure it’s paid off in the term period. But I agree with the PP who said save up the cash because one thing goes wrong and you’re stuck with a very expensive loan.

[Anonymous]

You never know what can happen. You can lose your job. Get into an accident or have terrible health. What if a tornado touches down and damages your home and you need additional repairs? What if you get into a car accident and now you gotta buy a new car and take on a car loan? So many things happen in life.

All of the sudden your plans for paying off the debt in 48 months turn into 90 months and then your fees or rates start skyrocketing and youbdrien in debt.

[Anonymous]

Investing is always risky to varying degrees. Upgrading the electrical systems and bathroom of a home you own is an excellent investment.

Many people would not want to part with cash that can sit in a 5% savings account when there are lines of credit that are essentially 0%.

Is it a risk? Yes. But with risk comes the potential for return. And this is a very low risk plan.

[Anonymous]

A couple of possible negatives/ questions:

1) if you lose your job can you still pay off the card?

2) it will affect your credit score a bit, but if you're not planning to apply for credit any time soon then probably not an issue

Why not just take a loan from your 401K instead where you pay yourself back with interest, and if you do lose your job the worst that can happen is you either have to pay the loan back or take it as taxable income and not pay it back.

Just food for thought.

[Anonymous]

I think a home equity loan or even a HELOC is a more prudent way to go. And you may be able to deduct the interest.

[Anonymous]

It’s fine, OP

[Anonymous]

Save up the money and pay cash.

[Anonymous]

Anonymous wrote:Save up the money and pay cash.

Don't listen to this clueless, tone deaf person. OP if you can get a 0% or 401K loan, do it. You should enjoy your home while you're in it.

[Anonymous]

Ridiculous. I would never finance renovations.

[Anonymous]

Anonymous wrote:Ridiculous. I would never finance renovations.

Most people do. There’s a reason why homes are leveraged investments.

I bet you think you are financially savvy.