Best Cash Back Card for Home Improvement — Bank of America Cash Rewards

People have already spent billions of {dollars} on house enchancment for the reason that begin of the pandemic — and consultants are forecasting a whopping $433 billion in house enchancment spending in 2021 alone, in response to analysis from Harvard College’s Joint Center for Housing Studies. 

However many householders may very well be lacking out on added financial savings for his or her renovation tasks. Of householders taking over tasks with a value between $1,000 and $5,000, simply 30% decide to pay with a bank card, whereas 85% use money from financial savings, in response to the 2021 U.S. Houzz & Home Study from Houzz, a house renovation web site.

Should you use your card strategically and keep away from carrying a steadiness, a cash back credit card with house enchancment rewards might help you maximize each greenback you spend at house enchancment shops or on contract work. And with money already saved to instantly repay the cost, you possibly can keep away from any danger of carrying over high-interest bank card debt.

Many money again playing cards even supply 0% APR durations on new purchases so you possibly can finance your challenge and pay it off over time, with out curiosity, in addition to rewards on on a regular basis spending in different classes, that can assist you save even after you wrap up your challenge.

Our high decide for money again on house enchancment proper now could be the Bank of America Customized Cash Rewards Credit Card. Earlier than you gear as much as renovate the grasp tub or reconfigure your landscaping, right here’s how this card can add worth to your subsequent challenge: 

Why the Financial institution of America Custom-made Money Rewards Credit score Card is Good for House Enchancment

There are just a few options that increase the no annual payment Financial institution of America Custom-made Money Rewards Credit score Card above different money again choices with regards to house enchancment advantages:

Money Again Rewards

With this card, you’ll get 3% again in a class you select (amongst fuel, on-line procuring, eating, journey, drugstores, or house enchancment/furnishings), in addition to 2% again at grocery shops and wholesale golf equipment. These rewards charges apply to the primary $2,500 in mixed alternative class/grocery/wholesale membership spending per quarter. After that, you’ll earn 1% again, and get 1% again on all different purchases. 

If you wish to maximize this card’s rewards for house enchancment, you might select house enchancment as your 3% class throughout your challenge, and use the cardboard solely for house enchancment as much as $2,500 spent at house enchancment shops quarterly. Eligible spending contains every part from {hardware} shops to restore retailers to huge field house enchancment retailers. Contractors are additionally eligible, so if you wish to herald an electrician or carpentry contractor, you possibly can nonetheless earn rewards in your fee. 

However your alternative class can supply much more flexibility, relying in your challenge. Should you plan to purchase your provides or new home equipment on-line, you possibly can choose the web procuring class. This contains on-line purchases you make with all kinds of retailers, together with people who may be useful on your challenge, like Amazon.com or Walmart.com. You could find extra particulars on eligible retailers for every class on Bank of America’s site.

Maxing out the $2,500 quarterly cap in your 3% house enchancment purchases alone would web you $75 in rewards per quarter. In case your challenge is long-term, or you will have just a few smaller tasks to tackle, you might web $300 in house enchancment bonus rewards every year.

Welcome Bonus

Maximize your own home enchancment spending much more by utilizing it to attain this card’s welcome bonus. 

As a brand new cardholder, you possibly can earn $200 in bonus money after spending $1,000 on purchases inside 90 days of account opening. That’s about $333 monthly; however in the event you max out your 3% rewards class, you’ll spend greater than sufficient to attain the bonus. And bear in mind, this money bonus is obtainable on high of the rewards you’ll already earn on on a regular basis spending and residential enchancment purchases.

0% APR on New Purchases

Not solely does it supply nice money rewards, however the Financial institution of America Custom-made Money Rewards Credit score Card’s 0% APR supply can even offer you flexibility to repay your challenge over time. There’s an introductory 0% APR on purchases (and steadiness transfers made inside 60 days of account opening) for the primary 15 months, adopted by a variable APR of 13.99% to 23.99%. 

Let’s say you spend $2,500 in your alternative class at a house enchancment retailer your first month after account opening. You’ll earn the $75 again on that spending, and in the event you reap the benefits of the 0% APR supply, you’ll even have 15 months to pay down your steadiness earlier than it takes on curiosity. You possibly can repay the $2,500 fully in that point with equal funds of $167 monthly.

Should you do reap the benefits of this supply to finance your challenge, simply be sure to have a plan to pay your steadiness in full earlier than the 15-month intro interval ends. You’ll shortly erase any rewards by taking over high-interest debt in your remaining steadiness. 

Different Playing cards to Take into account for House Enchancment

Whereas the Financial institution of America Custom-made Money Rewards Credit score Card is our favourite choice for house enchancment, there are just a few different money again playing cards that may allow you to rating main financial savings in your subsequent challenge. Just like the Custom-made Money Rewards, these playing cards not solely supply money again on house enchancment but in addition on the on a regular basis purchases you’ll make as soon as your challenge is full.

Earlier than you apply for any new card, be sure to examine choices that may allow you to maximize your own home enchancment spending and proceed so as to add worth to your pockets over time.

Wells Fargo Energetic Money℠ Card

The Wells Fargo Active Cash Card doesn’t supply any bonus rewards particular to house enchancment purchases, however it does supply a flat price of two% again on every part you purchase. Which means regardless of the place you purchase, it can save you on your own home enchancment challenge. There’s no annual payment, and you can begin off incomes $200 in bonus money while you spend $1,000 on purchases inside three months of account opening.

The Wells Fargo Energetic Money additionally gives 0% APR on purchases and steadiness transfers for 15 months, adopted by a variable APR of 14.99%, 19.99%, or 24.99%. This makes this card a strong choice if you wish to pay down your own home enchancment purchases slowly and with out curiosity for 15 months.

Citi Customized Money℠ Card

The no annual payment Citi Custom Cash Card is an alternative choice to contemplate in the event you’re engaged on smaller house enchancment tasks over time. You possibly can earn 5% again on as much as $500 spent inside your highest eligible spending class every billing interval, then 1% again. Eligible 5% again classes embrace eating places, fuel stations, grocery shops, choose journey, choose transit, choose streaming providers, drug shops, house enchancment shops, health golf equipment, and reside leisure.

As an alternative of selecting your class, you’ll mechanically earn 5% rewards (as much as $500 spent every billing cycle) within the eligible class you spend most. Whereas this removes the necessity to activate classes your self, you may additionally need to be extra acutely aware of how a lot you spend per class in the event you’re seeking to particularly maximize house enchancment in a given month.

You can too finance your own home enchancment purchases with this card, because of a 0% intro APR on purchases and steadiness transfers for 15 months, adopted by a variable APR of 13.99% to 23.99%.

House Enchancment Retail Playing cards

Should you plan to purchase the majority of your own home enchancment provides from one place, you may additionally take into account a retail card, such because the Lowe’s Advantage Card or the Home Depot Consumer Credit Card. These playing cards can supply financial savings on house enchancment spending or financing offers, however there are just a few extra restrictions than with normal bank cards that would value you.

With the Lowe’s Benefit Card, you get 5% off your Lowe’s purchases or the choice to make use of a particular financing supply for eligible purchases. The House Depot Credit score Card doesn’t supply any reductions or rewards, however you possibly can qualify for particular financing gives and perks like an prolonged return interval.

In contrast to introductory 0% APR offers on conventional bank cards, although, these particular financing gives solely defer curiosity. Should you don’t pay your steadiness in full by the top of the promotional interval, you’ll be charged curiosity going all the best way again to your buy date.

Should you’re planning to order nearly all of your own home enchancment merchandise or provides on-line,  however, the Amazon Prime Rewards Visa Signature Card might make for a great various. There’s no annual payment, however you do must pay for an Amazon Prime membership ($119 yearly). The cardboard gives 5% again on Amazon and Complete Meals Market purchases; 2% again at eating places, fuel stations, and drugstores; and 1% again on different purchases. You can too qualify for as much as a $150 Amazon present card upon account approval.

Ought to You Use a Credit score Card for House Enchancment Tasks?

House enchancment money again rewards might help you save on a expensive renovation, however it’s important to watch out with the way you spend, and be sure to have a plan for reimbursement. In any case, bank cards are likely to cost a lot larger APRs than different monetary merchandise like personal loans or home equity loans. 

And whereas a card with 0% APR on purchases for a number of months could be helpful for paying down your steadiness over time, be sure to can eradicate the fee earlier than your introductory supply ends to keep away from excessive curiosity costs.

You must also take into account how charging costly house enchancment prices to a bank card might have an effect on your credit score. Should you run up a steadiness near your credit score restrict, you’ll danger growing your credit utilization ratio, which might damage your credit score rating. When you have a really expensive challenge to finish, otherwise you’re unsure you’ll have the ability to afford the fee, it may be value ready till you possibly can save money to place towards your own home enhancements or wanting into alternative home improvement financing.

Earlier than you open a brand new bank card that can assist you save in your subsequent challenge, be sure to select one that provides advantages you should use for the lengthy haul. Search for a money again card with distinctive rewards not solely on house enchancment however in your most frequent on a regular basis spending classes too, like eating, groceries, or fuel.