Home Depot Credit Card Review: Only if You Need to Finance Home Improvement Purchases

The Home Depot® Credit Card can help you save money paying off those big home improvement projects. It offers no interest for six months on eligible purchases, and there's also an introductory discount offer. Outside of that, benefits are limited and don't measure up to other card offers. Learn more about the pros and cons of this Home Depot® Credit Card in our detailed review.

This credit card is a good fit for: Home Depot shoppers who regularly spend $299 or more and want to pay off purchases over time.

Top perks

The Home Depot® Credit Card has a few features that the retail giant's frequent shoppers will like.

No interest financing offers

There are no interest charges on purchases of $299 or more that you pay off within six months. During special promotions, this card offers up to 24 months of interest-free financing. If you often make large purchases at The Home Depot and need some time to pay them off, these financing offers are great for avoiding interest charges.

It's important to understand that these are deferred interest offers. Deferred interest means if you don't pay off the purchase within the allotted time frame, you're charged interest going back to the purchase date. This can cost you a lot of money if you're unable to pay in full.

Imagine you use your card's six-month financing on a $500 purchase. If there's any amount left after six months, even just $1, you'll be charged six months' worth of interest.

LEARN MORE: What Is Deferred Interest?

Up to $100 off a purchase

As an introductory offer, you get up to $100 off a purchase made in the first 30 days with the Home Depot® Credit Card. You can make the purchase in a store or on The Home Depot website. The amount of the discount depends on how much you spend. Here's how much you get based on the amount of the purchase:

• $25 off a single-receipt purchase of at least $25 but less than $300
• $50 off a single-receipt purchase of at least $300 but less than $1,000
• $100 off on a single-receipt purchase of at least $1,000

This is a reasonable discount for a store credit card. However, it doesn't match the best credit card sign-up bonuses, so make sure to check those out if you're looking to get as much value as possible.

No annual fee

You can add this Home Depot® Credit Card to your wallet without any extra yearly costs, as it doesn't charge an annual fee.

One year to make returns

The Home Depot® Credit Card offers extended returns and an easier return process. When you pay with The Home Depot® Credit Card, you have 365 days from the date of purchase to receive a full refund, which is much longer than the standard 90 days The Home Depot normally offers. And if you're missing your receipt, The Home Depot may be able to locate it in its system.

Good for building credit

One of the challenges of increasing your credit score is finding a card you qualify for. Many require a high credit score, and those that don't often have all kinds of unnecessary fees.

The Home Depot® Credit Card can be useful if you're working on your credit. It has lenient approval requirements, as many applicants with credit scores in the low- to mid-600s have been approved. Card activity is reported to all three consumer credit bureaus, so if you pay on time, it can help your credit.

RELATED: The Complete Guide to Understanding Your Credit Score

Special cardholder offers

Home Depot occasionally rolls out special offers for its cardholders. For example, it will sometimes offer 5% back as a statement credit on specific types of purchases.

What could be improved

Despite its perks, the Home Depot® Credit Card also has a few big flaws that hurt its value.

No rewards

The Home Depot® Credit Card doesn't earn rewards points, cash back, or any other type of rewards on your purchases. This is a significant disadvantage compared to the best credit cards, and even compared to other store credit cards.

Some store cards earn cash back on purchases. Many others earn rewards points that can be redeemed for a gift card. Rewards like these are a nice way to get something of value on your spending and can help make store credit cards worth it. Because this Home Depot® Credit Card doesn't offer rewards, the only reason to use it is for its financing offers.

Can only be used at The Home Depot

This is a closed-loop store credit card, which is one of the major differences between most store cards and traditional credit cards. "Closed loop" means a card can only be used with the retailer that issued it -- in this case, at The Home Depot stores and on The Home Depot website.

Quite a few store credit cards are like this, but it's still a notable drawback. You're very limited in terms of where you can use a Home Depot® Credit Card, and it's usually better to have a credit card you can use anywhere you want.

RELATED: Best Store Credit Cards

Deferred interest financing

As explained earlier, the financing you get from the Home Depot® Credit Card is deferred interest. While that can help you avoid interest, it's important to fully understand how deferred interest works.

With this type of financing, the interest on a purchase is deferred until the end of a specific time period. If you don't miss any payments and you pay off the purchase by the end of that time period (normally six months with this Home Depot® Credit Card), then you pay no interest. If you miss a payment or don't pay off the purchase in time, the card issuer can charge you interest going back to the purchase date.

The best 0% intro APR credit cards typically offer waived interest. There's no interest for the introductory period, and if you have a balance left over afterward, you're only charged interest going forward. If you can qualify for an intro 0% APR credit card, that's a much safer way to finance purchases.

A FICO® Score of at least 600 is recommended to apply for the Home Depot® Credit Card -- ideally, a score of 640 or higher is best. Applicants who get this card usually have scores in the fair credit or good credit range.

Keep in mind that credit card applications are based on a variety of factors. Although your credit score is important, it's not the only thing that determines whether you get approved for a credit card.

MORE OPTIONS: Best Credit Cards for Fair/Average Credit

You shop at Home Depot often and you either want to finance purchases or you're trying to build your credit score.

For the typical consumer, the Home Depot® Credit Card offers limited usefulness. That's frequently the case with store credit cards, but most of them at least earn rewards points or cash back.

The lack of benefits means this Home Depot® Credit Card is only useful for two things: Deferred interest financing or as a stepping stone to better cards after you've improved your credit. If neither applies to you, check out other credit card reviews and you should be able to find one that you like more.

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.