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How to Get Debt Help Before Renovating on a Credit Card

Home renovating is hot right now. Historically low interest rates and high housing prices are pushing Canadians to renovate their homes rather than move. Over two in five homeowners who are planning renos will pay for part of their renovations with credit cards — using debt to cover 25 per cent of their costs. Before you consider credit card debt to help cover reno costs, here are a few things you should think about.


A lot can happen in 2.5 years! If you’re considering paying for renovations on credit cards, be sure you have a plan to pay off your balances quickly (within a few months), or explore other options.

Beware the dangers of credit card debt. Here are three:

  1. Borrowing rates are high. You could pay as much as 20 per cent interest on your unpaid balances.
  2. It’s easy to apply for more cards, and take on more debt. Credit card companies have incentive to approve you for another card, but they aren’t looking after your best interests. Don’t fall into the trap of having debt on multiple cards.
  3. Be wary of credit cards offering reward miles or loyalty points. If you’re paying interest on a large month-to-month balance, these reward programs likely won’t outweigh the accumulating interest charges.

If you plan on making renovations, the best thing to do is to put money aside into a dedicated savings fund that will cover the costs of your project. Don’t touch your RRSP or other long-term investments to work on your house.

And if you’re taking on debt for your renovation, there are better options than credit cards. A home equity loan or line of credit can offer you a lower interest rate than a credit card, but you’ll still want to have a plan to pay off your outstanding balance.

As always, planning ahead and understanding your financial situation are key. Lower your stress and plan renovations within your budget. That will save you the headache of needing debt help with higher credit card balances.

Are you considering renovations in the near future? Chat about how you’re planning to make it work financially with the hashtags #DebtSolutions, #HomeReno.

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