Credit Card Options for House Renovation

Em0510

Hello! 

Very new to this so apologies if I say anything silly! 

We have saved up for 10 years(!) and finally brought our first house. It is a wreck and needs about 40k-60k worth of renovation on it. 

Family members have very kindly offered 20k as a gift to help and have also offered to loan us the remainder interest free. 

I am wondering whether how we should take advantage of this? Do we buy on credit cards with good rewards(?) and then pay it off each month with the interest free loan? Or is there a better way?

If this is the right option is there a specific credit card or cards that would be best? 

I imagine we would need to pay contractors a different way as a lot of them are asking for cash.

Thanks so much for your help in advance! 

Emma x

MorningcoffeeIV

Your first job is to create a budget to understand what you can afford to borrow and make repayments.  Then find out who will accept cards. 

Once you've done that, you can see if you can get any cards which are appropriate. 

Don't expect to get all, or any, the credit you might want, if you've just bought a house and are new to credit cards.

born_again

In reality you need to find out if co's doing work will take a credit card.

CliveOfIndia

There are several things to consider here, some of which have already been mentioned.

Firstly, if you've not had a credit card before, or have very little credit history, you may find you're restricted as to what cards will be available to you.

Secondly, as you've already found out, many tradesmen won't accept payment by credit card.

Em0510 said:

Do we buy on credit cards with good rewards(?)

If you are able to get accepted for a rewards card (with a high enough limit), and if your supplier will accept payment by card then yes, you may as well earn some rewards if you can.

Em0510 said:

 then pay it off each month with the interest free loan?

On an ordinary credit card (with or without rewards) you need to clear the balance in full each month.  Otherwise you'll be charged interest, which will dwarf the value of any rewards you might receive.

An alternative is a 0% purchase card, which charges you 0% interest for a set period of time (12 or 18 months, for example).  In this scenario you can just make the minimum payment to the card each month - though you will need to have cash available to repay the remaining balance when the promotional 0% rate expires.  Otherwise you'll start paying interest at the card's standard APR.

So yes - if you can get a rewards card and if your suppliers will accept credit cards and if you'll be able to clear the card in full every month, then go for it.  But do make sure you read and understand the Terms & Conditions of any card you might end up getting.

Perhaps most importantly of all - don't use a credit card as a means to pay for something you can't afford.  If you can't afford it, it'll have to wait until you've saved up.  Spending on a credit card without having the means to pay it off can very rapidly lead to a miserable spiral of debt.

Em0510

Thank you so much for all your responses !!

- we are now thinking of just using a credit card to make big purchases (fridge, washer/dryer / freezer/ bath/ sink etc) as all decorative purchases - as the flat has been completely gutted. We have money in the account to pay off the cc amounts in full/ each month. 

Going to start looking at what cc might gain us the best rewards (with a 0% interest)

Wish me luck and thanks again! Love this community x