Credit Card for House Extension

TobyAnscombe · 19 March 2017 at 11:49AM

Hi all - first time post so please be gentle..

My wife and I are looking to extend our house rather than moving. We have a budget and will be using savings to pay for the build, decorating and the inevitable new kitchen and have a contingency built in.

My question is on credit cards - given that we will be buying a load of new stuff (and using trade accounts with builders etc) is it worth looking to get a 0% or cash back card to try to either stretch out the terms or to do something with the money that we are going to spend.

I'm not suggesting that we finance and draw out the repayment period, merely that I know that we are looking to spend ~£10-15k on a card so is there any benefits that we can get and if so, what would the best approach be?

TIA

[Deleted User] · 19 March 2017 at 11:58AM

Yes - cashback, rewards or a 0% offer can all be useful. But the best option depends on what you can get.

Do you have have an established credit history - or is this a first credit card for you? Even with a decent file, 15k in a short period could be challenging, though not impossible.

TobyAnscombe · 19 March 2017 at 12:05PM

I've a decent credit history and never been refused. Noodle gives me 650/710 so I hope I'm a safe bet ;-)

I've never really jumped around with cards so only have a Barclaycard which is paid in full each month with a £15k limit - I hadn't thought about the max credit I'd get so good point.

Nebulous2 · 19 March 2017 at 12:25PM

Barclaycard do a duo card which gives you two cards on the same account- 1% cashback on American express and 0.5% cashback on the visa card. I don't think it is currently offered, but there are tales on here of people being allowed to switch to it by phoning and asking. Given you have a good history with Barclaycard that could be a starting point for you.

Otherwise look at the links at the top of this forum - top cashback cards, and take your pick.

TobyAnscombe · 19 March 2017 at 12:41PM

Thanks - am I correct that cash back cards expect you to pay in full each month otherwise the interest soon outweighs the cash back? Sorry for the dumb question!

Nebulous2 · 19 March 2017 at 1:18PM

TobyAnscombe wrote: »

Thanks - am I correct that cash back cards expect you to pay in full each month otherwise the interest soon outweighs the cash back? Sorry for the dumb question!

They don't expect you to - but there is limited point in using a cashback card and not paying in full every month. As you rightly say the interest would soon swallow up any cashback.

I was basing my answer on you having the cash and using it to fund your project as you went. If you aren't intending to pay it off every month then you could get a card with a 0% offer for purchases for a prolonged period, which would allow you to build up the debt due and then as long as you made the minimum payment every month and paid it all before the period finished, it wouldn't cost you anything.

There are a lot of different types of credit card and you need to be quite clued into the variations to choose the one which best suits what you intend to do. Or ask of course - the people here tend to be quite helpful - but we need enough information to make the most accurate suggestions.

DCFC79 · 19 March 2017 at 1:19PM

TobyAnscombe wrote: »

Thanks - am I correct that cash back cards expect you to pay in full each month otherwise the interest soon outweighs the cash back? Sorry for the dumb question!

Well paying in full is advised, yes I suppose the interest would soon outweigh the cashback.

TobyAnscombe · 19 March 2017 at 3:34PM

Intend on paying in full each month, ideally being able to pay builders deposit on it as well as apparently you gain the full spectrum of protection and rights (according to Houzz website).

Seems to be a toss up between points or raw cash back

eskbanker · 19 March 2017 at 4:18PM

TobyAnscombe wrote: »

Intend on paying in full each month, ideally being able to pay builders deposit on it as well as apparently you gain the full spectrum of protection and rights (according to Houzz website).

Sounds like you're referring to section 75 protection, which indeed can be a significant benefit from paying by credit card - there's another guide on this closer to home at http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases.

Also worth exploring exactly which of the traders you'll be dealing with will accept payment by credit card and if they charge a fee for doing so, as this may affect the economics that you'll be evaluating. As you'll see from the s75 article, you can get the full protection even when only paying a small (theoretically a penny) amount on a credit card, so even if a 2-3% fee is involved, paying a small deposit by CC could be worth doing.

eddddy · 19 March 2017 at 5:57PM

TobyAnscombe wrote: »

Intend on paying in full each month, ideally being able to pay builders deposit on it as well as apparently you gain the full spectrum of protection and rights (according to Houzz website).

Seems to be a toss up between points or raw cash back

Many local building firms (who are highly reputable) don't accept credit cards.

It tends to be the larger 'sales-focused' building firms that accept credit cards. In my experience, this type of firm tends to charge much higher rates - perhaps to cover the cost of their sales teams, marketing teams, advertising etc.

Credit Card for House Extension

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