Is the Home Depot card application the worst choice you could make in 2013? You will see a number of reviews which allege it’s a "scam" or "ripoff" but those complaints are an exaggeration, because the card is legal. But that doesn’t necessarily mean it’s a wise choice!
The "no interest if paid in full" explained (updated Nov 2013)
This is not the same as the 0% you will find on major credit card offers. What Home Depot typically offers is this: No interest on purchases of $299 or more if paid in full within 6 months
What that means is that if you don't pay every single penny back before the 6 months, then on the original purchase price you're going to get charged the interest retroactively going back to day one! And that's at a rate of 17.99% - 26.99%. Worse yet, Home Depot's application states that fewer than half of applicants will qualify for a rate of less than 25.99%. So the odds are you will have a rate of at least 25.99%. Ouch!
Major credit cards do NOT charge interest retroactively on their 0% intro, which makes them a wiser choice.Let’s face it… home improvement isn’t cheap. Regardless of whether you shop at Home Depot, Lowes, or another store, there’s a good chance you will pony up some big bucks for whatever project you’re tackling. And obviously, that can be painful on the wallet, right? Stores like Home Depot play right into that pain, by offering you the “convenient” alternative of using their store credit card to pay. Their no interest offers may sound like a lifeline, until you actually understand how they work.
As you see above, it says right there on the application how it works. Unfortunately many people don’t pay attention to this, nor do the customer service reps at the store always do a good job explaining it.
- To avoid interest charges, you have to pay off the full amount by the promotional end date (in the above example, that’s 6 months).
- If you don’t pay off the full amount within that timeframe, your Home Depot credit card account will be charged interest going back all the way to the date of purchase.
- Worse yet, all of the APRs are excessive, so that will be costly. As I write this review the advertised rates are 17.99% - 26.99% APR, but next to that they say this…
Major credit cards won’t do that
If you get a 0% offer from a Visa/MasterCard/Discover/AmEx, it won’t come with this deferred interest gimmick.
In other words, if you apply for a major bank card that offers 0% for 12 months, you will truly get 0% during that period, even if it takes you longer than that to pay it off.
This is why you should not apply for the Home Depot store. Instead you would be better off getting a regular bank card that comes with a 0% intro financing promotion.
Rewards? Forget about it!
- Chase Slate – Offers a nice 0% promotion and seems to be easier to qualify for than their other cards.
As if the financing offers weren’t disappointing enough, the Home Depot credit card doesn’t even offer a rewards program!
The best card for earning rewards at Home Depot stores is actually from Discover. Thru their ShopDiscover program, you can earn 5% cash back at homedepot.com:
So if you are a Discover cardmember and want to buy a fridge, faucets, doors, or anything else... just go to the Home Depot website through your Discover account and you will receive a full 5% cashback bonus on your purchases. Their website offers free in-store pickup, so you can buy online and then go pick it up at your local store.
Best of all, with the Discover it card (no annual fee) you can also save 5% in-store at home improvement stores during the quarter they are featured. To learn more, check out my Discover it review.
The 10% off promotion is extinct?
I remember a few years back, there used to be a promotion for the Home Depot card where you got 10% off the first purchase charged to the account. If you were spending thousands of dollars and had the ability to pay your bill in full, this was a fairly good deal as long as you were making a big ticket purchase.
Unfortunately I haven’t seen them offer in ages. It seems they stopped it a few years ago when the economy tanked and never brought it back since. I haven’t heard from anyone nor seen that 10% discount deal anywhere for several years now.
However as an alternative incentive, I have seen them tout a $25 statement credit for opening a new account. Being that many bank-issued cards offer more than that, I think most people would agree a $25 statement credit is a total joke. Not to mention, the last time I saw them offer that was way back in 2011.
Whether you’re after low interest rates or rewards, this is a rotten credit card all around. To add insult to injury, I hear the customer service is treacherous on it.
The only half-way logical reason I can think of for getting it is if your credit score is garbage and you need an easy to get credit card. If that’s the case, the Home Depot credit card requirements/qualifications aren’t too strict. But for anyone with average credit or above, you can do much better getting a card elsewhere.