If you shop for building materials, fixtures, appliances, landscaping supplies and other construction items at Home Depot, you should be aware that they have numerous financing options available for both consumers and commercial enterprises like contractors. Here’s a look at their four different financing mechanisms, so you can see if one is right for your ongoing needs or for a particular project in your home.
Home Depot Commercial Credit Cards
Revolving Charge Card
If you are a contractor or have another business that necessitates shopping at Home Depot frequently, having a Revolving Charge Card may be a wise choice. This card carries no annual fee and offers an APR (annual percentage rate) of 15% to 21.99% interest, depending on your credit status. Late payment fees are $35.
Convenience and improved organization for your business are the biggest reason to apply for this card. If you need to pay for materials up front before you bill your clients, you won’t be shouldering the cost yourself. If a client takes several months to pay you, you can finance those purchases and just make minimum payments on the card. Also, you get itemized billing and purchase tracking by SKU (stockkeeping unit) with this card, which makes keeping track of reimbursable expenses for multiple jobs much easier.
If you work on small jobs or purchase materials from a number of different suppliers in addition to Home Depot, this charge card may be right for you. However, if the bulk of your supplies come from Home Depot and you work on large-scale projects, you may want to consider applying for a Commercial Account, below.
Commercial Accounts with Home Depot typically have higher credit limits than the Revolving Charge Card. They do, however, need to be paid in full every month. This is a better option for well established businesses that can afford to do this. It may be better to start with a Revolving Charge Card and move to a Commercial Account if you are a start-up enterprise.
Commercial Accounts issue buyer identification cards for you and any employees who will be making purchases at Home Depot. This makes sending staff for supplies easy when you can’t leave a job site or have multiple jobs going on simultaneously.
Home Depot Consumer Credit Cards
Consumer Credit Card
For the average consumer, Home Depot offers a store credit card that can be used to make purchases in Home Depot stores and online at their website. Your credit limit and APR are determined by your creditworthiness. APRs for Home Depot Consumer Credit Cards currently range from 17.99% to 26.99%.
The main advantage to having a Home Depot Consumer Credit Card, in addition to convenience when shopping there, is that it entitles the card member to periodic discounts, usually with in-store purchases. Currently a 10% discount on one receipt is being offered, which can be significant if you are purchasing something like an appliance or materials to build a deck. Once your receipts start adding up to more than a few thousand dollars, though, it probably makes sense to look at Project Loans, below.
Home Depot offers project loan financing for larger renovations with budgets that go above the typical credit limit for their consumer card. This is an ideal way to pay for a kitchen or bathroom remodel or to cover less fun but still necessary construction projects like replacing your windows or adding a garage.
The biggest limitation with this type of financing is that all your materials covered by the loan have to be purchased from Home Depot within a six-month window of time. Anything you need from another supplier would have to be financed separately. The good news is that Home Depot has a pretty large selection of building and home supplies, and they can order items from other locations and have them shipped to the store closest to you.
Project Loans from Home Depot offer credit lines up to $40,000 at a fixed 7.99% APR, which may be a lower interest rate than you’d pay with many major credit cards. You have 84 months, or seven years, to pay off the loan, and there is no penalty for paying off the loan early. This makes Project Loans attractive to homeowners who want to use the financing to complete upgrades before selling their homes, and they can pay off Home Depot with the proceeds from their real estate transactions. The 84 months begins at the time of loan approval, but during the first six months, you are only required to pay the interest on the loan.
If you financed a project at the maximum $40,000 amount and took the entire seven years to repay it, you would have to pay $624 per month. You would also be paying $12,416 over the loan total, so it’s worth trying to pay the loan off early. If you need money for a major project like replacing your roof, however, and you don’t have the means to pay for it otherwise, paying the interest may be less than the damages you’d incur by not doing the repairs. It will also likely take less time to be approved for a Home Depot loan than for a bank loan or line of credit.
With so many financing options to choose from, if you are a regular Home Depot shopper, it’s a good idea to take a look at all of them to see if any work for you. With Home Depot stores in so many communities today, financing through their stores makes doing everything, from small fix-it chores to whole-house construction, easier and more convenient.