Putting Home Repairs and Investments on Your Credit Card – A Smart Decision?
Having a solid investment upon which you can rely in troubling times seems like a no-brainer – when pertaining to real estate, many are now beginning to ponder making improvements and reinvesting in their homes since the housing market seems to be picking up steam once again. Others are considering an investment in their properties in order to improve the prospects of the property selling in the coming months.
Whatever the motivation, many have asked whether using a credit card to make such improvements is a valid and fiscally responsible approach. Below, we’ll address these concerns so you can make the best decision possible.
Small Investments Versus Large Investments
Credit card debt resulting from a home improvement project can quickly become more of a liability than an asset if done improperly. While small projects can usually be paid off in a matter of months, larger investments will depend namely on your current income and savings. There are a variety of credit cards available to those with good or excellent credit that offer 0% APR for a period of several months; for financially manageable products, using a credit card in this case makes sense – especially if you are betting that your home will be on the market and sold within that time-frame. Any home project that requires more than a couple thousand dollars in investment, however, should be considered carefully as interest charges could ultimately add hundreds – if not thousands – of dollars of additional costs.
There Is Always Risk
Some will embark upon a home improvement project with the goal of adding curb appeal and home value for a potential sale in the near future. Others may simply want to take care of existing problems to make their homes cleaner, safer and more appealing. Regardless of rationale, there is always an element of risk involved. For those using a credit card to finance home improvement projects, it should be noted that your home may not sell as quickly as intended. For those who wish to make simple investments, changes in employment or personal situations could quickly nullify any investments you’ve made and leave you on the hook for that recently-acquired debt.
If You Have the Cash…
Some ask whether using a credit card to make home improvements is smart when you have the cash on-hand to pay for the project. The answer is an emphatic yes, so long as said funds are ensured to be there in the event a major emergency or life-altering event puts you in a position where you would not be able to pay down the debt otherwise. If you are capable of doing this, then the investments you make via credit card can help improve your credit score with little to no consequences.
Similar Posts:
- New SEC rules out to protect money market
- Defaults on US credit cards drops to an 18 month low
- 20 Million Home Owners With Negative Equity, Study Shows
- Alternatives Offered to Home Equity for Debt ReductionAlternatives Offered to Home Equity for Debt Reduction
- Best american express credit cards in every category customers can apply for
