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Financing in Focus: Role of Credit Cards in Home Improvement
In collaboration with Synchrony
Houzz Research
October 24, 2018
Findings from a survey of 10,602 U.S. homeowners on Houzz who renovated their primary residence in 2017 and paid with one or more credit cards.
1 in 3 uses credit cards to pay for home renovations: One in three surveyed homeowners on Houzz paid for 2017 renovations with credit cards (33%), typically in combination with cash or other personal finances. Unrestricted credit cards were twice as common as store-specific. A typical (median) card payer reported spending $10,000 on 2017 renovations and $1,500 to $4,800 charged to a card.
Millennial homeowners lead the ‘charge’: Renovating homeowners 25 to 34 years old were more likely to pay with a credit card (41%) than those 35 to 54 years old (34%) and 55 and older (30%). Credit usage remains high even for larger projects.
Most pay off balances over time: Three in five credit card users plan to pay off card balances over time (62%), with homeowners younger than 55 more likely to revolve balances (60% to 65%) than those 55 and older (49%). Moreover, a typical (median) card payer planning to revolve reported charging more to the card ($2,000 to $4,900) compared with a non-revolving payer ($1,000 to $3,600).
Promotional financing is key to card usage: The majority of card users planning to pay off balances over time take advantage of no-interest or low-interest promotions (58% and 16%, respectively) and cite the low cost as a motivation for card usage.
Perceived high costs deter cash payers from using credit: One in five renovating homeowners who used only cash to pay for renovations gave credit cards at least some consideration (18%), with a quarter choosing not to use credit due to perceived high costs (27%).
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Millennial homeowners lead the ‘charge’: Renovating homeowners 25 to 34 years old were more likely to pay with a credit card (41%) than those 35 to 54 years old (34%) and 55 and older (30%). Credit usage remains high even for larger projects.
Most pay off balances over time: Three in five credit card users plan to pay off card balances over time (62%), with homeowners younger than 55 more likely to revolve balances (60% to 65%) than those 55 and older (49%). Moreover, a typical (median) card payer planning to revolve reported charging more to the card ($2,000 to $4,900) compared with a non-revolving payer ($1,000 to $3,600).
Promotional financing is key to card usage: The majority of card users planning to pay off balances over time take advantage of no-interest or low-interest promotions (58% and 16%, respectively) and cite the low cost as a motivation for card usage.
Perceived high costs deter cash payers from using credit: One in five renovating homeowners who used only cash to pay for renovations gave credit cards at least some consideration (18%), with a quarter choosing not to use credit due to perceived high costs (27%).
Download the Full Report
See Related Stories: