Credit Card Spending for Home Improvement is on the Rise, Houzz-Synchrony Study Finds

Window & Door
October 23, 2018
Markets

One-third of homeowners used a credit card to pay for home renovations in 2017, according to a study released by Houzz Inc. in collaboration with Synchrony. Consumers charged $141 billion in home improvement product and service purchases to their credit cards in 2017, a 69 percent increase from 2011 ($84 billion). 

Significantly, half of renovating homeowners used cash and no other form of secured or unsecured financing. One in five admit to giving credit cards at least some consideration, and 27 percent indicated they choose not to use cards due to perceived high costs. Yet, among those considering a credit card, 37 percent would have used a different financing option, if it were available.

“The Houzz study reinforces that the availability of financing plays an important role in consumers’ home improvement purchasing decisions,” says Courtney Gentleman, SVP, CMO Payment Solutions, Synchrony. “Promotional financing can offer customers an easy and convenient way to make large purchases more affordable, and it can influence where shoppers buy.”

Renovating homeowners using credit card financing report a median spend of $10,000, with between $1,500 and $4,800 charged to a card. Reliance on credit cards remains high even in larger renovations, with 28 percent of homeowners who spent $50,000 or more on their projects paying for at least part of those renovations with credit cards. 

Among those who planned to pay off their balances over time, renovating homeowners were three times more likely to leverage no-interest or low-interest promotions than standard interest rates and cited the low cost as the leading motivation for card usage. Promotional no-interest financing was popular across renovation projects of all sizes and among homeowners of all ages.

Millennial homeowners (aged 25 to 34) were the most likely to use credit cards to finance renovations (41 percent), followed by Gen-Xers between the ages of 35 and 54, and Baby Boomers 55 years of age and older (34 and 30 percent, respectively).