Renovating or remodeling a home can be a fantastic investment as homeowners can increase the value and utility of their property. Unfortunately, many property owners do not have the means to finance an expensive renovation. Lowes and The Home Depot are the two major home improvement retailers that offer competing credit cards that can help get the job done while spreading the costs over time.

Lowe’s Credit Card

Lowe’s and GE Retail Bank offer a consumer credit card that features no annual fee, a 0% financing offer, and a 5% discount on purchases. This card is a store card that is not affiliated with a larger payment network. Therefore, it can only be used for purchases from Lowe’s.

Purchases made with this card are eligible to receive a 5% discount, although that offer is not valid on purchase of services, gift cards and some appliances. In addition, this offer cannot be used with any coupon, military or employment discounts, or low-price guarantee. Instead of receiving the 5% discount, cardholders can receive six months of interest free financing on purchases over $299. After the promotional rate expires, the standard interest rate is a hefty 24.99% – about 10% higher than the national average rate on standard credit cards.

The Home Depot Credit Card

The Home Depot also offers a store credit card through Citi. Like the Lowe’s card, it is not part of a payment network and it can only be used at their stores. And while it does not currently offer an in-store discount, it does presently provide 6 months of promotional financing. The standard APR on this card is variable with the lowest rate about 4% above the average rate for general credit cards – 17.99%. Other consumers may be approved and offered rates of 21.99%, 25.99%, or 26.99%.

However, in store offers for the Home Depot card can vary dramatically. A recent example was a 0% APR for 18 months promo. While appealing, this promotion was 180 degrees different than what is offered on a 0% APR credit card with a 0% for 18 months promotion. On the latter, no interest is levied during the 18 month 0% period.

With the Home Depot card, if a transaction that used the 0% for 18 month financing is not paid in full before the 18 months expires, that card is charged interest for the 0% period, effectively erasing the benefit of the 0% promotion. Consequently, consumers who use this feature should be extremely careful to pay special financing balances in full. If this can be accomplished, the Home Depot card’s promotional rate can be very advantageous.

Which card is best?

Clearly, the Lowe’s card has the advantage over its biggest competitor, The Home Depot. The 5% discount is very significant, as is the opportunity for promotional financing. Unfortunately, much of the marketing literature can lead customers to believe that they can take advantage of both the promotional financing and the discount on purchases as is the case with nearly all credit cards with similar terms.

In fact, the terms insert the word “or” between the two offers in a way that is not immediately apparent. Nevertheless, it is preferable to have the option of either one of those terms rather than just limited term financing with The Home Depot card. In addition, it is also possible to save 5% and get even longer promotional financing by using a no-fee balance transfer to a Chase Slate card. By offering either 0% financing or a 5% discount, Lowe’s comes out ahead of this battle between home improvement retail giants.

However, given how frequently these stores change credit card promotions, consumers who intend to use one of these cards should check both stores first to get the best deal.

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