Using a credit card for renovations?

[Grant Doyle]

I am closing on a four-plex in the next month and will be renovating it while I live in. I do not currently have a credit card and thought that using a card to pay for renovations would be a good way to start building more credit. What things should I be careful of and what recommendations do you have?

[Christopher Giannino]

1st and foremost, don't open up a credit card until you officially have closed on the 4plex.  I have heard lots of horror stories of individuals opening up new lines of credit during the closing process and then losing the deal because things have changed and now the bank won't lend them the money.

Also, if you plan on doing any kind of refinance on the back end just know that if you don't pay off the credit card in full, the debt will count towards your DTI ratio when it comes to refinancing. Depends on the lender but I believe this could potentially cause an issue.

Last thing, if you're going to open up a new credit card I would look for something with some kind of benefit or reward.  It could be a introductory 0% for XX amount of months, it could be XXX bonus after you spend XXXX amount or simply something with some kind benefit that works best for you life eg travel points.

Hopefully you find this helpful and best of luck!