The Home Depot Consumer Credit Card Review: Should You Apply for Store Credit?

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The Home Depot Consumer Credit Card offers in-store credit for purchases.
Image Credit: The Home Depot / Clark.com

If you have been to The Home Depot lately, you probably have noticed signs for The Home Depot Consumer Credit Card.

The in-house credit card touts interest-free payment plans and potential discounts on select purchases. But there’s a catch!

Money expert Clark Howard says there are risks with store credit cards like these that you may not be aware of. In this article, I’m going to detail the risks as well as the pros and cons of this card.

Table of Contents


What Is The Home Depot Consumer Credit Card?

The Home Depot Consumer Credit Card is an in-house store credit card offered by the home improvement retailer. It does not carry a Mastercard or Visa logo. That means that you can use it only for purchases at your local The Home Depot store or through the retailer’s app and website. You can’t use it for purchases at any other retailer.

This card, which often is pitched by The Home Depot employees at the checkout counter, offers no-interest or low-interest financing options on select purchases. It also comes with card-specific perks like a first-time purchase discount and an extended returns policy.


How Can I Save Money with The Home Depot Consumer Credit Card? 

The Home Depot relies on promotional offers to lure potential customers in a handful of ways:

  1. No-interest periods for select purchases
  2. Limited-time discount offers for select purchases
  3. Extended return policy

The Home Depot does not offer a straight discount on purchases made with its in-house credit card. This is in contrast to the Lowe’s Advantage Card: It offers 5% off everyday purchases at Lowe’s, which is The Home Depot’s major home improvement store competitor.

No-Interest Periods

The standard no-interest period offer for this card is six months on purchases of $299 or more. This is actually “interest-free” only if you pay the balance in full before the end of the six-month period. We’ll get into the potential downfalls of this arrangement a little later on.

Home Depot Consumer Credit Card offers 6 months financing with no interest.
HomeDepot.com

In addition to the standard six-month offer, the card also offers similarly-structured financing deals that can last as long as 24 months. These deals change often and typically involve the purchase of a product in a specific spending category.

For example, here are a few of the financing offers that were available at the time of this review:

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  • 12 months special financing on installed fencing purchases of $1,999 or more
  • 24 months financing on Kinetico or RainSoft installed water treatment purchases ($600 minimum purchase)
  • 12 months financing on any installed heating and air conditioning purchase of $299 or more
  • 12 months financing on any stock or special order windows, installed windows, doors, installed garage doors and patio doors

Limited-Time Discount Offers

While The Home Depot does not offer a set purchase discount for cardholders, it does advertise special discounts that are available only for a limited time.

For example, at the time this article was written, The Home Depot was offering a special discount to new cardmembers that could be as much as $100 off a purchase of $1,000 or more:

Home Depot offers deals exclusive to credit card members.
HomeDepot.com

These discounts are not just for new cardholders, though.

In July 2020, the retailer also was offering $500 off installed sheds or garages, plus an additional 5% back, if you make the purchase on your The Home Depot Consumer Credit Card.

Extended Return Policy

One additional way The Home Depot Consumer Credit Card could potentially save you some money is through its generous return policy.

Instead of the standard 90-day return policy for new or unopened merchandise, the retailer will allow its cardholders to make returns for up to one year from the purchase date. While this doesn’t save you any money on the front end, it could buy you some time to decide whether you made the right purchase or not.

And you may not even need your sales receipt. Since the purchase was made on the in-house credit card, The Home Depot will be able to locate your transaction data for up to 365 days from the purchase date.

You can read more about The Home Depot return policy here.


Is the Risk Worth the Potential Reward?

The idea of an interest-free six-month period to finance your next big household purchase is attractive on the surface. But there are risks involved.

Clark says the main risk associated with this card is retroactive interest. Let me explain how that works.

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If you make a purchase of $299 or more, you can use this card to get 0% financing on the purchase for six months.

If you fail to pay the balance in full by the end of the six months, you will be assessed retroactive interest charges on the full purchase amount. And that interest accrues from the date of the purchase, leaving you owing a lot more than the amount you saw at the register.

And the use of this card gives you little in the way of rewards beyond the special financing period.

Using a cash back credit card, such as the Citi Double Cash, could be a way to get 2% cash back without having to tap into a new line of credit, for example. And revolving cash back cards, such as the Discover it Cash Back Card or Chase Freedom, offer 5% cash back on categories that change every three months. It’s worth checking those categories before your purchase to see if you qualify for the 5% discount.


2 Alternatives to The Home Depot Credit Card

If you are looking for an alternative to using a store credit card, Clark says these are better ways to finance your upcoming home improvement project if you can’t pay cash.

Clark’s First Suggestion: Home Equity Line of Credit (HELOC)

If the project is large enough, you may want to visit your local bank or credit union first. If there is equity in your home, applying for a home equity line of credit may be the most prudent financial decision.

Clark says you’re likely better off securing a lower APR rate via traditional lending if you know you can’t pay off the full balance of your purchase before the introductory offer expires.

“Even though they’re going to pay interest right away, they’re going to pay a much lower effective interest rate than even with 6, 12, or 18 months at 0% but then goes to a 25% or higher interest rate later,” Clark says.

Clark’s Second Suggestion: Low Fixed-Rate Credit Card

What if your project is expensive but not worth accessing a line of credit? Clark still has an alternative to the store credit card.

While you’re at that local bank or credit union, perhaps you could ask about their lowest fixed-rate APR credit cards.

Clark says you can often find a fixed-rate credit card at a credit union for under 10% APR. He would prefer locking in that card rate and then trying to pay the balance off early versus attempting to dodge retroactive interest.

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Final Thoughts

If you are considering a large purchase at The Home Depot, you likely will be tempted to apply for this card. Here are some pros and cons to consider before you make that decision:

The Home Depot Consumer Credit Card: Pros and Cons

Pros Cons
Interest-free financing opportunities Cannot use the card anywhere but The Home Depot
Promotional discount offers on select products High APR interest awaits if balance is not paid in full
One-year return policy on purchases made with the card Retroactive interest is due on special financing if not paid in full by end of promo period

Bottom Line: While the temptation may be strong, Clark’s advice is to forgo The Home Depot Consumer Credit Card in favor of other financing options.

If you have a small project, perhaps you could take advantage of a rewards program with your existing credit card. If you have a large purchase to make, Clark would prefer that you seek a loan or fixed-rate credit card that will give you a stable path to quick repayment.

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