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Best credit cards for homeowners (and renters, too) from our partners

By , CardRatings contributor
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    Best credit card for home improvementCredit is a major concern for nearly everyone in the home-buying cycle. Consider what happens when you go for your mortgage: You look up your credit report, correct any mistakes, comparison shop for the lowest rates and, of course, limit new credit applications to prevent your score from dipping.

    But the need to be credit savvy doesn't end once you get the keys to your new home.

    Homeowners face a brand new set of responsibilities: some obvious, such as now having to act as your own property manager and fixer of broken things large and small. Other needs may be less obvious to someone brand new to home ownership, such as having to keep a continued close eye on your credit health so you can easily refinance when the time is right.

    To help keep your credit card line-up in sync with your new life, we took a look at some of the most common scenarios homeowners face and then leveraged insights from our credit card experts to help you find the best cards for each one. We also scoured the fine print so you don't have to. (But still read it!)

    Best credit card for home improvement 

    The card: Discover it® - Cashback Match™

    Why we like it: Discover it® - Cashback Match™'s  rotating categories change quarterly and have featured purchases like gas, restaurants, Amazon.com and more. Cardholders earn 5 percent cash back in those categories up to the quarterly maximum each time you activate, and Discover makes tracking and redeeming rewards effortless. Plus, if you're a new cardholder, Discover will match all the cash back you earn in your first year. Added bonus: Rewards never expire. Suddenly, all those trips to the store are a little less painful on your wallet.

    Discover it® - Cashback Match™ is also offering a 0 percent APR for 14 months on purchases and balance transfers. As we get into in more detail below, this is a better deal than the six-month zero APR window offered by many home improvement retailer cards.

    And even though the home improvement bonus category isn't on the list for 2018, Amazon.com and wholesale clubs both show up on the 2018 rotating categories calendar that was released in late 2017. Basically, those categories could still reward you handsomely for those DIY projects and new purchases for your home.

    Why care: You can outsource all of your home repair needs, sure, but be prepared to pay a hefty price for doing so. That's why so many new homeowners decide to go the DIY route. Mixing credit and renovation requires close attention to the details. That seemingly great six-month, zero-percent interest offer from a major home improvement retailer will not look or feel so fantastic if you do not pay it in full by the expiration. You could see your interest rate jump to more than 26 percent, well above the credit card industry average of about 16 percent (as of July 2016), after the intro period ends. Further, all the interest that was accruing in the background now gets added to your account. Ouch. There are much better offers out there when it comes to a credit card for home improvement.

    Fine print: You must activate Discover's offer each quarter in order to receive the bonus, so don't forget! Also, the rewards cap at $1,500 in spending for every quarter you activate.

    Also consider: Chase Freedom®. Like Discover it® - Cashback Match™, Chase Freedom® offers unlimited 1 percent cash back on all your purchases in addition to the 5 percent bonus cash-back categories that rotate quarterly. Chase Freedom® categories are usually a bit different from the Discover categories. It might not be a bad idea to have both cards.

    Best Credit Card Offers for Paying Down Your Mortgage

    The card: Wells Fargo Home Rebate Visa Card®

    Why we like it: If you are a Wells Fargo customer with a mortgage from Wells Fargo this card can be a powerful tool to help you pay down your mortgage more quickly and save thousands in interest payments over the life of your home loan. Redemption is easy, too: Every time you earn a $25 rebate your Wells Fargo home mortgage loan principal is automatically credited. (You can request your rebate as a paper check or redeem your rewards for travel and other products and services as alternatives.) Overall, the card benefits stand up quite well to other cash-back cards, particularly for the first six months: You earn a 5 percent rebate on gas, grocery and drugstore "net purchases" (purchases minus returns and credits) for the first six months. Then, it dips to 1 percent for each $1 spent in any category, but your earning potential and your rebates are unlimited.

    There's no annual fee to eat into your rewards and you'll enjoy a introductory 0 percent interest period for purchases and balance transfers for the first 15 months, making this a great card to use if you have a big purchase (think, sofa for that new living room) within your first few months of card membership.

    By the way, Wells Fargo has a unique and potentially huge extra feature: cell phone insurance. If you pay your cellular bill with your Wells Fargo credit card, you will automatically be covered for up to $600 in coverage ($1,200 per year) if your phone is damaged or stolen.  

    Why care: The idea of carrying a mortgage into your retirement years is a scary thought, but also an increasingly common scenario. A 2015 Zillow study found that the average age for a first-time home buyer in the U.S. is now about 33 years old. Why not think about a credit card that directly impacts your mortgage principal when you buy your everyday items?

    Fine print: Reverse mortgage loans or loans that are "in process or not yet fully funded" do not qualify.

    Also consider: If you plan on rewarding yourself for all that frugal DIY work with some travel, then consider putting those new kitchen cabinets on a United MileagePlus® Explorer Card. Very large purchases may pay off handsomely -- each calendar year you make $25,000 in purchases, you'll snag 10,000 bonus miles.

    Best Credit Card Offers for Extended Warranties

    The card: Blue Cash Preferred® Card from American Express

    Why we like it: All major credit card issuers offer extended warranties on purchases so you can't really go wrong here, but the Blue Cash Preferred® Card from American Express (American Express is a Cardratings advertiser) does have the edge in a few ways:

    • Extension of manufacturers' warranty for one additional year; three years for Centurion® cardholders. Applies to warranties of five years or less.
    • Amex doesn't exclude wear and tear claims.

    These benefits come with all American Express products, but we chose the Blue Cash Preferred® Card from American Express in order to combine great protection with an already bulked-up cash-back card, handy now that staying-in means enjoying a home of your own. Cash-back rewards go up to 6 percent at U.S. supermarkets, to an annual $6,000 spending limit (after which it drops to 1 percent). You'll also earn 3 percent at U.S. gas stations (handy for all those trips to and from home improvement stores) and at select U.S. department stores (great for all the new linens and more you'll need to make your new home homey). Everything else earns 1 percent cash back. We also love that the rewards come back in the form of Reward Dollars that can be redeemed for statement credit or for gift cards or merchandise -- so easy. Terms apply. See Rates and Fees

    Why care? Things will break in your new home. And they will break more often than you think. Take my homeownership experience: Our first load of laundry was greeted with billowing black smoke. Not long after, lightning struck the water line to the well, creating a beautiful but unwelcome water feature off the back deck, and then a major crack appeared in the housing of our brand-new refrigerator.

    Fine print: If your claim is approved, American Express will pay up to the actual amount charged, not to exceed $10,000. If you live in Puerto Rico or the U.S. Virgin Islands, you will have a separate extended warranty description, so be sure to read that.

    More details to consider:

    • Notice of claims needs to be made within 30 days by calling 1-800-225-3750.
    • Review all exclusions. Coverage is not available for several types of purchases, including cars, boats, motorcycles and items purchased for resale, professional or commercial use.
    • Amex's extended warranty does not reimburse for "shipping and handling expenses or installation, assembly, professional advice, maintenance or other service charges."
    • Benefits are capped at $50,000 for losses in a calendar year.

    Also consider: Chase Slate®. This is a perennial favorite for 0 percent intro offers, which is great if you will need time to pay off a large purchase and don't want to pay any interest. With this card, you'll have 15 months to make purchases or pay off a transferred balance, interest-free. Plus, Chase Slate® doesn't charge a balance transfer fee for transfers made within 60 days of opening your account – that's a savings of $5 or 5 percent of each transfer.

    But What if I Rent?

    Renters have options, too. Take advantage of your maintenance-free lifestyle and grab one of the many amazing travel rewards promotions currently available. Our credit experts prefer the Chase Sapphire Preferred® Card. Right now you can earn 50,000 bonus points if you spend at least $4,000 in the first three months from account opening. Those points are worth a cash equivalent of $625 if you redeem them for travel through Chase's online rewards portal, Chase Ultimate Rewards. You don't have any DIY projects keeping you in on the weekends, so take off and enjoy the perks of renting.

    Just don't talk up weekend outings too much in front of friends stuck mowing the lawn and weeding all weekend. Home sweet home indeed!

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