There’s something appealing about strolling through Home Depot’s wide aisles, dreaming of home improvement projects that might be in your future. Unfortunately, The Home Depot Consumer Credit Card doesn’t elicit the same good vibes, despite its $0 annual fee.
That’s because the store-branded card doesn’t earn ongoing rewards and offers little in the way of perks. Even the most loyal Home Depot fan would probably be better off with a flat-rate cash-back or rewards card.
What Are the Pros and Cons of the Home Depot Card?
- No annual fee.
- Only requires fair credit.
- Allows financing for large purchases.
- Offers a full year to make returns.
- No rewards.
- No cash back.
- High APR.
- Financing only defers interest, so you’ll need to make payment in full by the expiration date to avoid hefty charges.
- Can only be used at Home Depot and on Homedepot.com.
Here are five things to know about The Home Depot Consumer Credit Card:
1. It offers deferred interest (but not 0%)
The Home Depot Consumer Credit Card can help you finance a big home project; in fact, that’s its primary selling point. It offers six months of deferred interest on purchases of $299 or more.
Be aware, however, that there’s a difference between deferred interest and a true 0% intro APR offer. With the former, interest is accruing in the background during the introductory period. With the latter, the interest rate during the intro period is literally 0% — no interest is accruing at all. This makes a big difference it you get to the end of the intro period and you haven’t paid off the balance completely.
With The Home Depot Consumer Credit Card, if you fail to pay off the balance completely by the six-month mark, you’ll be charged all the interest that was adding up from the day you made the purchase. That could end up being an expensive oversight. By contrast, with a 0% offer, you will pay interest only on the remaining balance and only going forward.
If you can qualify for a card with a true 0% introductory APR offer that lasts 12 months or longer, you’d be better off. The BankAmericard® credit card is a great alternative. You get 0% intro APR on Purchases for 21 billing cycles and 0% intro APR on Balance Transfers for 21 billing cycles for any balance transfers made in the first 60 days, and then the ongoing APR of 15.99%-25.99% Variable APR .
Or if you’re seeking to earn rewards on your purchase, the Chase Freedom Unlimited® is also a good pick. It offers an intro 0% intro APR on purchases and Balance Transfers for 15 months, and then the ongoing APR of 20.24%-28.99% Variable APR. Plus, it earns rewards. At Home Depot, you’d earn 1.5% cash back with the card.
2. You won’t want to carry a balance
Even if you don’t take advantage of the deferred interest offer, you’ll want to avoid carrying a balance from month to month. As with many store-branded credit cards, the ongoing interest rate can be quite high. The ongoing APR is 17.99%, 21.99%, 25.99%, or 26.99%, Variable.
3. New cardholders enjoy a modest discount
On new accounts, The Home Depot Consumer Credit Card offers $25 off purchases of $25 to $299, $50 purchases of $300 to $999, or $100 off purchases of $1,000 or more. That’s not nothing.
Still, unlike many store-branded credit cards, there are no ongoing rewards for in-store purchases. You can do better.
For example, if you’re a do-it-yourselfer and you’re not loyal to Home Depot, the Lowe’s Advantage Card offers 5% off eligible store purchases, earning it a place among Hargaria best store credit cards. For purchases of $299 and up, you can choose either the 5% discount or a similar deferred interest offer.
4. Cardholders enjoy a longer return period and exclusive offers
Frequent Home Depot shoppers might benefit from the fact that hassle-free returns are offered for one year with the card, which is four times longer than you’d normally get on Home Depot purchases. That could come in handy, especially on large purchases that you end up regretting later.
During special promotions, cardholders can also qualify for up to 24-month financing.
5. Home Depot offers a separate card for bigger projects
Home Depot also offers the Home Depot Project Loan Card, which allows cardholders to borrow up to $55,000 for big improvement projects. As of February 2023, you might be able to qualify for a loan as low as 7.42%, but your actual terms will vary.
It’s designed to finance major projects such as kitchen or bathroom remodels and could appeal to consumers who don’t have access to lower-APR loans elsewhere, such as a home equity loan.
The Home Depot Personal Cards at a Glance
|The Home Depot Consumer Credit Card||The Home Depot Project Loan|
|APR||17.99%, 21.99%, 25.99%, or 26.99%,|
based on creditworthiness
|4 tiers with term and APR subject to qualifying credit approval:|
|Late Fee||Up to $40||Up to $40|
At first glance, these cards both look like typical credit cards, but you should be aware of some major differences. Let’s dig into the specifics.
Unveiling the Limitations of the Home Depot® Credit Card
No Rewards Program – Missing Out on Valuable Benefits
While the Home Depot® Credit Card offers various advantages, it falls short in one crucial aspect – the absence of a rewards program. Unlike the best credit cards available, including other store credit cards, the Home Depot® Credit Card does not provide any rewards points, cash back, or similar benefits for your purchases. This significant drawback limits the card’s appeal when compared to its counterparts.
Exploring the Value of Rewards Programs
Numerous store credit cards offer enticing incentives such as cash back on purchases or rewards points that can be redeemed for gift cards. These rewards not only enhance the overall value of a store credit card but also provide cardholders with tangible benefits for their spending. Regrettably, the Home Depot® Credit Card fails to offer such rewards, leaving customers with limited incentives to utilize the card, apart from its financing offers.
Restricted Usage – Limited to The Home Depot
One of the distinctive characteristics of the Home Depot® Credit Card is that it can only be used exclusively at The Home Depot stores and on The Home Depot website. This feature categorizes it as a closed-loop store credit card, setting it apart from conventional credit cards. Although many store credit cards share this limitation, it remains a noteworthy drawback. The restricted usability of the Home Depot® Credit Card deprives users of the freedom to make purchases at any desired retailer.
The Pitfalls of Deferred Interest Financing
As previously mentioned, the financing option provided by the Home Depot® Credit Card employs a deferred interest model. While this may help cardholders avoid immediate interest charges, it is crucial to fully comprehend the workings of deferred interest.
Under this financing arrangement, the interest on a purchase is deferred until the conclusion of a specific timeframe. However, if any payments are missed or the purchase is not paid off within the designated period (typically six months for this Home Depot® Credit Card), the card issuer reserves the right to charge retroactive interest from the original purchase date.
The Superiority of 0% Intro APR Credit Cards
In contrast to the Home Depot® Credit Card’s deferred interest model, the most favorable 0% intro APR credit cards offer an alternative financing approach. These credit cards provide an introductory period with waived interest, meaning that during this period, no interest is charged. Furthermore, if a balance remains after the introductory period, only future purchases are subjected to interest charges. Opting for an introductory 0% APR credit card is generally considered a safer method to finance purchases, given its more lenient terms.
How can I apply for a Home Depot Credit Card?
You have two options to apply for a Home Depot Credit Card. Firstly, you can apply online through The Home Depot website, where you will need to provide your personal information and consent to a credit check. Alternatively, you can visit any Home Depot store in person and complete the application process there. Keep in mind that eligibility is based on creditworthiness, and approval is not guaranteed. The card issuer, Citibank, will determine your purchase APR and other applicable terms based on your creditworthiness.
Will applying for a Home Depot Credit Card affect my credit score?
Yes, applying for a Home Depot Credit Card or any credit product involves a hard credit inquiry, which may lower your credit score by a few points. It is important to consider this impact before making a decision. However, you can check if you pre-qualify for the Home Depot Consumer Credit Card on their website without affecting your credit score. Please note that prequalification or preapproval does not guarantee approval for the card or any other credit card or loan.
How does using a Home Depot Credit Card affect my credit score?
If you are approved for The Home Depot Consumer Credit Card, Citibank, the card issuer, will likely report your purchases to the three major credit bureaus. By practicing responsible financial and credit habits, such as maintaining a low credit utilization ratio and making timely payments, you can potentially improve your credit score over time.
Where can I use my Home Depot Credit Card?
Home Depot credit cards or credit accounts can only be used at Home Depot stores or for qualifying purchases made on HomeDepot.com. These cards are considered “closed-loop” and cannot be used at other stores or vendors. Please ensure to use your Home Depot Credit Card exclusively for transactions within the Home Depot ecosystem.
Can I pre-qualify for a Home Depot Credit Card online?
Yes, you can pre-qualify for The Home Depot Consumer Credit Card on the Home Depot website. This feature allows you to gauge your chances of approval without negatively impacting your credit score. However, it is important to note that prequalification or preapproval does not guarantee approval for the credit card or any other credit card or loan.
Home Depot provides a number of store credit cards, commercial accounts and project loans to help you finance purchases from its stores. Read all terms and conditions carefully before applying for any credit product and ensure you fully understand any implications to your financial situation and credit profile.