- I have very good credit
- I have a credit card that gives 2% cash-back on almost all purchases
- I do not carry a credit card balance month to month
- I have to make emergency home renovations and will need to borrow about $12,000
- My credit limit is much greater than $12,000
- I'm able to quickly get a personal loan for $12,000 around 7% APR (Much lower than Credit Card interest)
- Get the $12,000 personal loan
- Pay for all renovations on my 2% cash back credit card
- Use the loan to pay off the credit card balance.
- I just saved $240
Question Is there any reason I shouldn't do this vs just paying for the renovations directly with the loan? I called the company that will give me the loan and they said once I receive the cash from the loan I can use it for whatever I want. (except crimes)
*** UPDATE ***
I ended up doing this. Turns out that, at least in my area, many contractors waive credit card fees in order to stay competitive. I was able to get hundreds of dollars cash-back by putting it all on the credit card, then immediately paying off the card with my personal loan.