Financial Gurus, Is this worth doing ? (Using Credit Card for Building Expenses)

LFreek on 23/06/2015 - 10:23
Last edited 23/06/2015 - 14:12 by 1 other user

Hi Everyone. Looking for advice if this idea is actually worth doing, and what is the best way to go about it, or any other ideas/suggestions welcome.

Here we go. So I am building a home, and it is the basic package. It is what I can afford without going broke, and I don't want a mortgage. I will be saving what I can by doing carpets, tiles, flooring, curtains etc myself. (Yes, I have some experience..My Dad is an ex carpet layer etc,so quality will be good)So no debate on this please.

So, my question is this. I am thinking of using some kind of credit card when buying the carpet, tiles etc and anything I buy, to earn points and maximise my savings. I will be paying the amount back straight away (unless not advisable?)

What would be my best options in terms of doing this, and is there something better I could do?

Thanks in advance.

Financial

Comments

  • raj koothrappali on 23/06/2015 - 10:26

    If you are paying it back before interest free period expires, you should be fine
    You can also look into those '0% balance transfer CCs' if need be.

  • retiredfeline on 23/06/2015 - 10:32
    +2

    It's fairly normal to use CC for purchases. But check if they will give you a discount for other payment options, it may save more than any interest you keep or points you get.

    • serpserpserp on 23/06/2015 - 10:42

      I second this. Often just a savings of 5% will surpass the cost involved in acquiring a credit card with a decent point system and also the value you will get out of accumulating points on purchases etc.

      Example: Westpac's Altitude Black cards have a 3pt for $1 spend on Amex or 1pt to $1 MasterCard. The most cost effective way of utilizing points under the WBC scheme is to buy gift cards such as Myer/DJs. The cheapest card you can purchase is $20 with 3,850 points, so it is going to mean a purchase of ~$1,300 (on Amex) just to get a $20 card which is not even a 2% value of your purchase.

      Never mind annual fees etc. that the normal punter pays for these cards (can be up to $300 etc.)

      My advice: Unless you have a credit card already that has a points system that is either free (not sure these exist) or is apart of your expenses already, you'd be better off shopping around and purchasing goods with cash at a discount.

  • carwashhair on 23/06/2015 - 10:34

    ^yep. Just make sure that the value you derive from points earn is greater than the interest and surcharge costs of purchasing, or that you're not doing yourself out of an even larger discount by paying cash. With any smaller suppliers, it pays to ask.

  • Freek on 23/06/2015 - 10:49

    Thanks for the quick replies.

    I would be paying it back straight away.

    A quick estimate would be around a 15k spend, and not use it after that.

    Just thought I was spending the money anyway, might as well try and get something back.

    I do not have a CC already.

    Looks like old fashioned cash and haggling is the way to go.

    • retiredfeline on 23/06/2015 - 10:54
      +2

      Yup, just do it before 2040. :)

      • Freek on 23/06/2015 - 11:16
        +2

        Haha. Well and truly before. Soil testing done, so not far off.

        Will be an interesting comparison. Been looking at some stuff at Masters. CashRewards offers 2% back without a CC fee.

        Im not sure if there is a cap though. More research to do.

        On a side note. On eBay, a person was selling 800kgs of new Firm crumb rubber underlay which he no longer was using as the house build didn't go ahead. I manged to snag the lot for 99c no reserve auction. A few trailer trips and it was home.

        Hes surprisingly handed it over and was happy enough it was going to use, and not someone looking to flip it.

        Was pretty stoked. Good saving there.

  • meowmeowmeow on 23/06/2015 - 10:50
    +1

    Make sure you get a card without a cap on the points you can earn per month, or at least a generous cap

    • serpserpserp on 23/06/2015 - 11:06

      Which cards don't have a cap on points earn per month?

      • SlickMick on 24/06/2015 - 08:40

        My Citibank Signature had better not.
        My Amex Qantas Card had better not.

        ??

  • JimB on 23/06/2015 - 11:13

    Most places will offer you a cheaper price for Cash.

    If no savings, then pay using credit cards.

    I suggest you get a professional to lay your tiles. No DIY'er can lay tiles anywhere near as good as a good tiler.

    • Freek on 23/06/2015 - 11:19

      Yeah, I wont be doing a dodgy on things. But, I have done a bit of it before, and have a good mate that is in the industry to give me a hand. Last thing I want is crooked looking stuff.

      Just trying to save what I can as I don't want to borrow.

      But It will be done right. Saved a bit so far, with the pad being done by a mate of a mate. And me spending a bit of time on a bobcat that cost me a carton of beer to use, and diesel. All been leveled and inspected by the building company and given the thumbs up.

      • JimB on 23/06/2015 - 11:33

        Fair enough, my opinion still stands. With tiling, there's a big difference between ok job and great job.

        I've seen 'professional' tilers produce poor results, but I've never seen my tiler do anything but a great job.

        Everything else you mentions I'm happy to do DIY, but not tiling for a place I would live in myself.

  • snook on 23/06/2015 - 15:17

    Many trade supply places will charge extra for using a credit card, especially if you're looking at more bargain purchases.

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