Home Improvement Credit Card from Bank of America: Home Advantage
I was reading over at Blueprint for Financial Prosperity and saw that Bank of America is now offering a new credit card with a home improvement spin, the Home Advantage Card.
It’s much like other cash back cards, offering the equivalent of 1% cash back on all purchases for the life of the card, and an additional 1% cash back for the first 12 months when you “shop for your home.“
If you’re about to do a lot of DIY home improvement, this card might be right for you. For those who are plugging away at projects slowly, over years (like us), this card is probably only good for you if you don’t already have another 1% card you use for most of your shopping.
Qualifying Purchase Requirements
So what exactly does it mean to shop for your home? Essentially, all purchases made at stores that identify themselves with one of the following categories qualify for the discount. I was surprised by two things in Bank of America’s list of stores (1) that BoA covered this many types of stores in the offer, and (2) that credit card companies subdivide stores into so many different types. Who knew they needed a category just for fireplace stores? Is must be a bigger industry than I realize.
- Office and commercial furniture (MCC 5021),
- Home supply warehouse stores (MC 5200),
- Furniture, home furnishings and equipment stores (MCC 5712),
- Floor covering stores (MCC 5713),
- Drapery, window covering and upholstery stores (MCC 5714),
- Fireplace, fireplace screens and accessory stores (MCC 5718),
- Miscellaneous home furnishing specialty stores (MCC 5719),
- Antique stores (MCC 5932),
- Glassware, crystal stores (MCC 5950),
- Household appliance stores (MCC 5722),
- Electronics stores (MCC 5732),
- Computer software stores (MCC 5734),
- Electrical parts and equipment (MCC 5065),
- Hardware, equipment and supplies stores (MCC 5072),
- Paints, varnishes and supplies stores (MCC 5198),
- Lumber, building materials stores (MCC 5211),
- Glass, paint and wallpaper stores (MCC 5231),
- Hardware stores (MCC 5251) and
- Nurseries, lawn and garden supply stores (MCC 5261).
BoA notes that our favorite stores, including Home Depot, Lowes, and Best Buy, are covered by these categories, as I’m sure are thousands and thousands of others.
Beware of the 12 Month Limit on the Extra 1% Back
Of course, Bank of America only provides the additional bump up for the first 12 months of the offer. After that, the Home Advantage card is no better than any other 1% cash back card. This will be a major drawback for most folks, but the credit crunch has its consequences. Someone has to pay for all the bad debt floating around, and giving people 2% back for life just isn’t in the cards right now (haha!)
Home Mortgage Pay Down – A Gimmick?
BoA really sells this card on the premise that it will help you pay down your mortgage faster. Of course, any money savings anywhere in your budget that you apply to your mortgage balance will help you pay down the mortgage faster. The only problem I have with their marketing is that the savings BoA quotes are at amazing purchase levels. On the sign up page, BoA quotes the amount of mortgage savings you’ll make if you apply the cash back you receive each quarter to the balance on your mortgage (with certain assumptions).
BoA uses three quarterly cash back figures to demonstrate the savings you might receive by paying down your mortgage early: $50, $100, and $250. In order to receive checks at these amounts, you would need to charge, all at qualifying stores $2500, $5000, and $12,500 respectively each quarter. After the 12 month period is over, you would need to double these spending rates to achieve the mortgage savings BoA cites!
The Bottom Line
If you’re considering doing an extensive amount of work on your home (to the tune of $5,000 or more), and you would have used a 0% or 1% cash back card for the purchases, the Home Advantage card could be a compelling offer. If not, like us, you’ll probably pass.
Related Links:
What do you think? Any credit card suggestions for the home improvement obsessed?
Numbers image courtesy of Declan.
Comments & Conversation on this Article...
Ask your question in our Home Improvement Help Forums.
Otherwise, leave a note here!