Credit Card or Bank Loan?

Posted on 19. Jan, 2009 by Mrs. Mecomber in managing money

I have long considered (and tossed around at great length) whether to finance our home improvements and renovations with a bank loan or with a credit card loan. My own personal credit is very good, which has given me great options for credit card loans; but bank interest rates and home equity loan rates really haven’t changed much for me. I know one family that financed their entire tens-of-thousands renovation with credit cards, and they had everything paid off within six years and paid very minimal interest. This is extremely appealing to me. Credit cards have extreme flexibility. But you have to be disciplined to control your spending and pay it off in time for it to work. How have you financed your improvements, and how did it go? With the banking industry crisis, I haven’t seen banks willing to budge their rates very much. Yet with credit card loans, my good credit can get me a very low APR.

Anyway, with all these choices, it helps a great deal to be able to comparison shop for better rates and search for the top credit card offers. There’s a great website to check for such comparison shopping: CreditCardFlyers.com. It will itemize the rates you are looking for, by company, by instant credit notification, by reward points, by balance transfer amounts, by low APR, by cash-back offers, and more. The website is free to peruse, and you just might find the good APR or rewards card you’ve been waiting for. I think it’s smart to list all the cards and rates together, so they can compete off one another and we consumers can finally benefit from it!

Financing is hard work– harder work than renovating, I think! Know your options and scout around for the best deals. I’m hoping that this year is MY year to finally finance and get that new kitchen! And as always, do your homework before leaping into a financing plan!