One of the best things about modern credit cards is that you can find a rewards card for nearly any type of purchase — including for many of the things you’ll be buying for your new home.Of course, the downside to all those options? All those options.
Zeroing in on your rewards needs can be complicated, especially if you’ll be shopping in a variety of places. So, the first step is to make a list of your biggest expenses. For example, if you know you’ll be making some repairs or upgrades, you may want to put the hardware store at the top of your list.
Once you have a clear idea of which categories your expenses will fall into, you can start looking for a card that offers bonus rewards in the largest number of those categories. If you’re buying a house full of furniture while also putting down large utility deposits, for instance, a card that rewards both of those categories with bonus rewards would be ideal.
On the other hand, you may wind up with a list of expenses that don’t fit neatly into any card’s bonus categories. In that case, the best option may be a card with a good flat-rate on all purchases, such as a 2% cash back card. That way, you’re covered no matter where your needs take you.
You should avoid opening any new credit cards while you’re still in the home-buying process. Any big changes to your credit profile could negatively impact your home financing. It’s generally recommended to avoid opening any new credit cards in the six months before you buy a house.
Additionally, after everything is said and done, don’t forget that you’ve just taken on a huge debt. That new financial burden will likely impact your credit scores, as well as dictate how much money you have to pay off other debts. Both of these will influence a credit card issuer’s decision on whether to approve your application for a new card, as well as what type of credit limit to grant you.