Are you facing massive home repairs? Here’s why signing up for a credit card can save you money:

If you own a home, repairs may be needed at almost any time. And if you need major repairs, you may have to postpone them due to lack of funds.

According to Today’s Homeowner, by 2023, 82% of American homeowners will need at least one repair. And of those waiting for repairs, 59% said they were doing so because they couldn’t afford to get the work done right away.

But putting off home repairs isn’t always possible. If your heating system breaks down in January, you can’t wait until June to fix it when we’re going to have months of cold weather.

Now, if you know you won’t be able to pay off a huge home repair bill right away, the best course of action is usually to get financing. You can take out a personal loan or a home equity loan to cover the costs. If you want more flexibility in how much you can borrow, you may want to look into a HELOC.

However, in some situations, charging the cost of major home repairs to a credit card may be the best option. Here’s why:

When you have money to pay your bills

Personal and home equity loans are often better options than credit cards for financing purchases over time. Both loan options offer a fixed interest rate on the loan amount, and both tend to charge lower interest rates than many credit card companies charge.

However, if you have the money to cover the full cost of your home repairs, using a credit card makes sense. If you pay the balance when due, you will not be charged interest on your purchase. But what you can get is cashback or reward points, and lots of them.

So let’s say you owe $10,000 in home repairs. You don’t want to charge $10,000 to your credit card and pay it off over several years. In this case, the interest you earn can be huge.

However, if you have an emergency fund of $10,000 or more, you can pay the bills by putting them on a credit card and then using your savings to pay them. If you get 1% cash back on your purchase, you’ll get an extra $100 back.

Make sure there are no credit card fees.

Paying for home repairs with a credit card can make sense if you have the money to pay the bill in full. But before you do that, check with the contractor or company doing the work for you and make sure there are no additional charges for using a credit card. If you have one, consider writing a check.

Let’s say there’s a 3% surcharge on all credit card transactions and you have a $10,000 bill. Using a credit card will cost you $300. So even if you’re entitled to get $100 back, you’ll lose out financially if you swipe your credit card. In these situations, your best bet is to pay in cash if you’re lucky enough to have the money.

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