What credit card do you use to fund renovations?

Question

Straightforward question -- what credit card do you use to fund your material costs in a renovation? Why did you pick that card?

Before I explain my situation, let me add some context. I have solid money management skills, and have a six-figure career so I'm highly confident in my ability to repay the credit card debt (if incurred). I have a credit score that ebbs and flows around 800. We can all agree that having credit card debt isn't favorable but if used correctly, it can add flexibility to the renovation project. I'm not here to debate whether I should use one or not.

Now here's where I'm at today: a good friend of mine is a reputable contractor whose done hundred of quality renovations. He's let me know that I can purchase all of the materials, and I'll I'd be responsible for is paying the wage of his employees to get the job done. That said, I'm likely looking at $20k  to $30k in material. My goal is to pay cash for the work and finance the material. As far as repaying ~$30k in material costs (credit card debt), I'm confident I can do that by 12 months and 100% certain I can do it by 18 months. One last thing, this is a BRRR strategy (buy and hold).

ONE LAST NOTE: This is not a joint venture with my contractor. I purchased a duplex on my own with conventional financing. Purchase price is $408k with and ARV of $600k.

J Scott · Answer

My personal preference is the Chase Southwest Visa.  Simply because I fly SW most of the time, so the free flights are good...

Frank Hinck · Answer

@Armando Neri

On a joint venture like that I’d recommend using an LLC not using your own personal financing therefore not using a credit card.    HELOC or Hard money might be a better option.

Aaron McGinnis · Answer

Use one that will give you the kind of points benefits you want. Personally, I travel internationally a lot and so I like the Chase Bank Visa point system, as I use a sapphire card personally and can then xfer points out to various airlines and hotel groups.The Points Guy is kind of like Biggerpockets, but for CC reward points. Start there and do your homeowner before buying into a reward system.For me, CC reward points have been... well, life changing. We've flown all around the world, usually up front, for less cash out of hand than it would cost us to get to the beach.

Luke Marsh · Answer

There are numerous credit cards that are pretty solid for business expenses, it really depends on your preferences. I have had a really good experience with the Chase Ink Business Preferred as Evan mentioned.

Sean Howell · Answer

Me and my partner used a credit card from our LLC at Bank Of America. This was interest free for the 1st year so we were able to basically borrow the rehab money for free for a year and also allowed us to develop a relationship with the bank. They required us to have established credit with them for a year before they would give us a business line of credit. This was the perfect way for us to bridge that gap. Would recommend if you have an LLC.

Evan Polaski · Answer

@Armando Neri I use the Chase Ink Business Preferred.  Cash back or 25% bonus for airline mileage.  But travel rewards are only valuable if they are the airlines/hotels you use.

Joe Marquardt · Answer

@Armando Neri   Forget about miles/cash back/etc....get anything with a 0% introductory rate for 12 months. If you are paying down fast, then you’re borrowing free money. Also, since this is a small renovation and you’re only spending $30k on the card, any cash back/points/etc are not really going to be much that should make rewards offered by the card your driver in deciding. Find a card with a intro rate and you’re set.

Sam Stabler · Answer

@Armando Neri

Why do this when Fed Fund Rate is at 0% and not heading up anytime soon, thereby lowering the cost of adjustable rate financing for the foreseeable future on other adjustable rates such as Helocs? Id rather use that financial instrument than take a chance on 0% financing off a credit card for 12 months, only to see it balloon up to 30% on the 13 month if you decide to carry the balance should things not go exactly as planned.

Mike Stohler · Answer

I would not use a credit card.  Money is too cheap at the moment.  Get a HELOC.  Pay 2% instead of 12+  Also, always without waiver, do business in an LLC, and never in your personal name.

What credit card do you use to fund renovations?

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