Using a 0% APR Credit Card to pay for rehab to gain points?

7 Replies

I have a large renovation coming up in a month and thought it would be a good idea to pay for the rehab work on a 0% apr credit card in the hope of gaining thousands of points for future use. Just wanted to know if anyone out there has done the same thing? What credit did you use etc. I've seen a few with 0%APR for 12 - 15 months which gives me plenty of time to cash out refi in order to pay it all back. Thanks

@Elizabeth L.

It can be done as long as you are diligent about paying off the cards, preferably as soon as you get your draw or your refinance.  It is really easy to get underwater with the cards because the minimum payments are so low.  Also, be aware that the balance on those cards will affect your credit score and the amount of money you qualify when you refi.

@Elizabeth L.

I've used the 0% APR for 18 months offers that have been sent to me on my existing credit cards. Just know that you have to pay that balance in full or you'll be stuck paying all of the deferred interest at the end of the term.

I'm not aware of any good cards that offer points AND 0% APR. I believe it's usually one or the other unless you already have a card that gets points and they offer you the 0%.

@Elizabeth L.

I believe the main objective is to get the work completed, correctly and as inexpensively as possible. You could definitely use a credit card for that and there are a number of cards available, depending on your credit. Just make sure you have the funds available to pay for the rehab if you are unable to refinance. You will most likely need to pay transaction fees to access the money 3%-4%, if you are writing a check for the work or the contractor will just factor this into their price. In that situation, paying by check might get you a better price. I would check pricing on the work when using a card vs. using cash.

Really sticking it to the credit card companies even if they have billion of dollars to figure out what, when, where, and why you spend money on stuff. New flash: You won't win. 

Most contractors that work for me want cashiers check or cash. My advice is to find another way. 

Thank you All, that all makes sense. I do have the cash I can borrow from a family member paying %5 interest, the work is estimated to take about 4-5 weeks and I hope to cash out refi as soon as I get it rented so I can pay off the loan. I was just thinking of all the travel points I could gain by putting the 40-50k on a credit card. I have the starwood amex card but the apr is so high so I thought maybe applying for one with 0% apr for the first 12 months. I have really good credit and financials so I hopefully shouldn't have a problem with the refinance but it's my first time doing this. 

@Elizabeth L. , I finance a large portion of my rehabs with Home Depot store credit card 0% interest for 6/12/18/24 month offers. (Length of 0% interest depends on how much you're spending.)

A few tips:

1. Make your minimum payment a couple of days before it's due. Write this on the calendar and make sure you aren't late. Late payments means the 0% interest is over AND you owe 100% of all the interest for the entire purchase.

2. Pay the entire balance off a few days before it's due. Again, write this on your calendar and make sure you aren't late. Late payment means you owe the entire amount of interest on the entire purchase for the entire time - which can really add up. 

@Mindy Jensen Thanks Mindy! I also have a home depot credit card I use, the only reason this even came up as an option is because I just hired my contractor and he's going to start next month, he said he takes credit cards so I can make my progress payments to them by card, so I just thought of all the points I could gain. I can definitely pay it off right away since my dad has the cash he was going to loan to me in the first place at 5%. Will write this on my calendar as soon as we start, I don't want to hurt my credit score at all. 

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