Millions of customers look to Home Depot (NYSE:HD) for their home improvement needs. For those who need to borrow to finance their home projects, you can find multiple Home Depot credit offers, each of which has different terms. By looking at all of your Home Depot credit options, you can find the one that best meets your own needs.
Home Depot credit cards
Home Depot offers two different types of credit cards. The consumer credit card offers customers the ability to finance their Home Depot purchases just like any other credit card, with credit limits set depending on how good your credit is. Interest rates are relatively high, with the corporate website saying that the typical range is between 18% and 27% depending on your credit history. Minimum monthly payments are required, but one special feature that the Home Depot credit card has is that certain purchases related to popular projects offer interest-free or other promotional terms.
The other Home Depot credit card is for commercial customers. It carries an interest rate of 22% for customers in most states and offers variable credit limits depending on the credit-worthiness of your business. The card allows business owners to carry a balance from month to month, requiring only minimum monthly payments and offering itemized billing for ease of management.
Other ways to get credit from Home Depot
As an alternative to traditional credit cards, Home Depot also offers other ways to borrow for purchases. For consumers, the Project Loan program allows qualified customers to borrow up to $40,000, allowing multiple purchases during that timeframe that all get added together for purposes of the loan limit. Home Depot offers interest-only payments for the first six months of the loan, with a fixed interest rate of 8%. The term of the loan is seven years, giving borrowers the chance to spread repayments across up to 84 fixed monthly payments while retaining the flexibility to prepay at any time.
For commercial customers, the alternative to a corporate credit card is Home Depot's commercial account. Unlike the conventional project loan program, the commercial account requires customers to repay any amounts due in full every month. However, as long as you pay your bill on time, no interest or other fees are imposed, and you get the benefits of online account management and itemized billing statements along with the convenience of a single payment for all your Home Depot needs for the month.
What's the best deal?
Which form of Home Depot credit is best for you depends on your particular needs. Traditional credit cards offer a lot of flexibility, but they also carry high interest rates if you can't pay off your balance in full every month. By contrast, the project loan program for consumers can be extremely attractive, with far better interest rates than credit cards offer.
For business customers, the Home Depot commercial account doesn't add much that a business credit card doesn't offer, as you can always pay off a credit card without interest or penalty. The discipline of a commercial account might be beneficial for some business owners, but by itself, that's not a very compelling reason to choose it over other choices.
Home Depot's credit options make purchasing the products you need to do home improvement projects easier. If you're smart about managing your credit and would shop at Home Depot anyway, looking at its credit options could work to your advantage.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.