Looking at 0% promo interest cards to finance home remodel - need to soundboard-get advice

[RonM21]

Congrats on getting the 3 cards. I hope all goes well now with the remodel

[gamegrrl]

I just posted an almost identical post in Personal Finance. LOL! In fact, I have a second contractor coming today to put together a bid.

I know from experience with this second contractor that they have to be paid by check, as they did our kitchen renovation. I need to see if the same is true for the first contractor.

My Blue Cash Everyday card from American Express has 0% interest through May 2017, so I will likely use that for purchases. Still need to figure out the best way to handle the portions of the project that can't be put on plastic though.

Good luck with your renovation! We only have one bathroom and it's this terrifying 110 year old example. LOL!

[Anonymous]

Congrats! Agreed on the Citi protection. If it's 0% purchases and BT then you can charge everything to it (in chunks) and transfer it off as you like. Right? Also nice to know that it was all charged in the same place. When we did our kitchen reno two summers ago, I hadn't become the credit junkie I am now and didn't have limits to support what we were doing in a logical way. Things were charged to two different HD cards, a HD project loan, and about four different credit cards. Heaven help us if we ever have to figure out what was charged where down the line. 

[brewcrew87]

I recently did pretty much the same thing with my basement remodel.  Put about 12k on the credit cards.  What I did was sign up for a Chase Ink+ (70k URs bonus) and a CapOne Spark Cash ($500 bonus).  I then charged everything on those two cards and used a Barclay BT for 18 months at 2% BT fee on my Sallie Mae so I can pay it off over time.  Made a pretty decent amount in rewards that definitely made the BT fee a non-issue.

Good luck!

[helaurin]

Thanks!   I just charged almost to the max on the Citi card for about half of the plumbing stuff (plumbing supplies & fixtures were just over $11,000). I'm hoping to make fairly good use of the Price Rewind feature, so it may not be quite as close to the max when I get done.  I put the rest of the plumbing stuff on the Chase card, along with a deposit for the vanities.  I've got another card for the tile (store specific) with 15% - 20% off (depending on amount purchased) and 12 - 18 months 0% (depending on amount purchased).    Just picked out the tile tonight

[takeshi74]

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@helaurin wrote:

I figure that I'll need to put probably about $10 - $12k on credit cards.

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Keep in mind that revolving utilization matters regardless of 0% offers.  If you want to put $10-12K on a card you'd ideally want  at least 3x that amount.  If that's not possible then you'll need ot pay down those cards as quickly as possible to avoid adverse action.  At 90% a card is considered maxed.  General advice is do not exceed 30%.  How long would it take you to get back down to 30%?  To pay it off?

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@helaurin wrote:

In general, assuming nothing changes with my income (I'm a single parent), I will be able to put about $1,000 a month towards the credit cards through the rest of 2016, and about $700/month in 2017.

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That's going to be a long repayment time.  Unless you can get something like a $30K+ limit you can easily run into trouble.  Let's assume you get a $12K limit and charge $12K  that means you're starting out maxed at 100%.  On month 6 you would still be at 58% revolving utilization which is still very high.  You wouldn't get under 30% until month 10.  That's a long time IMO.  Of course, risk tolerance isn't the same for all creditors.  Some will be willing to tolerate less risk, some will tolerate more.

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@helaurin wrote:

I'm considering taking a few cards

New acccount and credit seeking activity are also risk factors.  Be careful compounding them.

A loan may be trickier to qualify for but it won't have as much impact as a spike like this in your revolving utilization.

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@helaurin wrote:

I have reasonably decent credit (Fico score of 788).

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You don't have just one score.  There isn't just one scoring model used by all creditors and for most models you have a score with each of the 3 major CRA's.  If you want to know where you stand score-wise with a given creditor you need to be aware of the specific scoring model & CRA used in their decision and go pull that specific score.  Different models evaluate report data differently and can have different scoring ranges which will impact the number generated.  The data in a report is the other piece that determines the number generated and you cannot assume that all 3 CRA's have identical data.

That score looks good and you may be in good shape with the other CRA's but you'll want to verify that instead of just assuming.  You can use the Credit Pulls Database (Google to find) to verify the CRA used by the creditors/products you're considering.  Some entries in the CPDB will note the scoring model.  You can also use existing threads here as a resource to find this sort of info.

You could probably get good limits with that score but it's never just a matter of score.