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Home repairs can be a bummer, but if you play your cards right, you can minimize the financial blow.
Key points
- Home repairs can pop up when you least expect them.
- Choosing the right credit card to pay for them could result in a pile of extra money.
This past summer, my husband and I discovered our air conditioning system had stopped working — naturally, on the hottest day of the year. We needed a quick repair, and after consulting with professionals, we determined it made more financial sense to replace our system than fix it.
Although we had the money in our savings account to pay for a new air conditioner, we opted to charge the job on one of our credit cards and pay the bill off right away so as not to accrue interest. Since the repair company we’d called in wasn’t offering a discount for paying in cash, we figured we might as well put the expense on a credit card and get some cash back in the process.
But if you’re facing a repair, there may be an even savvier move you can make. And it’s something you may want to consider the next time you’re looking at a giant bill.
What can a pile of cash do for you?
Many credit cards offer sign-up bonuses for hitting a certain spending threshold shortly after opening an account. You may, for example, find an offer where you’ll get $500 cash back for spending $3,000 within three months of opening a new card.
If you normally only spend $700 a month, that $3,000 spending requirement may not be easily attainable. But if you’re plunking down a large payment for a home repair, you may have no problem meeting a card’s spending threshold — and scoring bonus cash as a result.
Now, the key to pulling off this strategy is to be able to plan out your repairs and time your credit card application strategically. In our case, we couldn’t go after a sign-up bonus because we needed to get the air conditioner replaced as soon as possible. As such, we didn’t have the luxury of applying for a new card and waiting for approval.
But some home repairs are more easily anticipated than others. Say you know your air conditioning system needs a $1,000 fix at some point between now and the start of summer. If you schedule that work for April, you can apply for a credit card with a sign-up bonus in March. Then, you can charge that $1,000 repair on your card to increase your chances of meeting the spending requirement for that bonus.
Make the best of a bad situation
Home repairs can constitute a big financial strain. And sometimes, their unexpected nature makes them even more difficult to deal with.
But if you have a specific repair on your radar, it could pay to apply for a credit card with a sign-up bonus and snag a lump sum of cash to help offset that expense. Getting a pile of money back could soften that blow — and leave you with more of a cushion for when the next big thing with your home goes wrong.
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