Before Paying for Home Repairs on a Credit Card, Ask This Question

A middle-aged adult sorts their home finances with a laptop and notebook.

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You may want to keep that credit card tucked away when home repairs strike.

Key points

  • When home repairs strike, you may be tempted to pay for them using a credit card.
    Sometimes, paying cash will end up being a lot cheaper.

When my husband and I bought our home about 12 years ago, we knew we'd be liable for costs outside of our monthly mortgage payments. And sure enough, through the years, we've spent our fair share of money on home repairs.

Recently, we had to replace our air conditioner when it gave out in the middle of the summer without warning. The cost was about $7,000.

My first inclination was to whip out one of my credit cards and charge that expense. Thankfully, I had the money in my emergency fund to pay that bill in full. But I figured that I might as well use my credit card to get cash back out of the deal.

Still, before I handed over that credit card, I asked one important question. And the next time you're faced with a home repair, it pays to ask it, too.

Is there a discount for paying in cash?

It's common for merchants to charge consumers one price for cash payments and another price for using a credit card. Gas stations, for example, commonly post per-gallon prices based on the payment method being used.

Similarly, it's common for home repair companies to offer a discount for paying in cash versus a credit card. That's because credit card companies charge those companies fees that can eat into their profits. If they're able to collect cash payments and avoid those fees, they're often willing to pass those savings -- or at least a portion of them -- onto consumers.

That's why I made sure to ask if a discount on my air conditioner replacement would apply for a cash payment. Even though I wanted my credit card points, my card only gives me 1% back on something like a home repair. And so if the company I used would've offered a 3% discount for paying in cash, that would've been the better bet.

As it happened, there was no cash discount in my situation. And so I used my credit card and got my cash back to soften the blow of that sudden and very expensive repair.

But the next time you're faced with a home repair, it pays to ask the question and see if there's a discount for paying in cash. For a large repair, you could end up saving quite a bit of money.

It never hurts to ask for a cash discount

Chances are, you'll spend more on the typical home repair than you will on a restaurant meal or local store purchase. But even in those situations, it never hurts to see if there's a discount for paying in cash.

Normally, big businesses won't offer one. But let's say you're having a dress altered at a local shop. You may be quoted $80 for the job under the assumption that you'll be paying with a credit card. But if you're willing to pay cash, the business owner may be willing to knock a few dollars off the price.

Credit cards are a convenient way to pay, but they cost businesses money. It never hurts to do some digging and see if paying in cash will result in a discount for you -- especially if you have an expensive home repair on your hands.

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