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Synchrony Bank has launched a no-annual-fee credit card for home-related shopping with some out-of-the-box attributes, giving you different perks depending on the amount of your purchase.
The Synchrony HOME Credit Card resembles traditional "closed-loop" store cards that can be used only at specific merchants, but it has a broader reach than most. Through a partnership with the Discover card network, the card advertises acceptance at more than a million locations and can be used to buy qualifying home-related purchases, which can include furniture, decor, appliances and flooring, plus spending at places like mattress stores, garden stores, and with contractors.
The card offers one of the following, depending on how much you spend at an eligible merchant:
Rewards of 2% cash back as a statement credit on purchases under $299 (offer good through Dec. 31, 2019); or
Six months of promotional financing on purchases of $299 or more. (Be aware that this is a deferred interest offer, not a 0% intro APR offer. More on that below.)
"Our research shows the consumer is looking for choice," says Neeraj Mehta, chief executive officer, payment solutions, Synchrony. "With the HOME card, we feel that there's nice flexibility to the card and it allows you to be specific."
Qualifying purchases made at participating Synchrony HOME locations may receive an offer of longer promotional financing, ranging from 12 to 60 months depending on the retailer.
If you aren't sure whether the place you want to shop will accept the card, the HOME locator feature can identify participating merchants, based on your address or ZIP code. When NerdWallet tried the locator, we were surprised to see some of the places that accepted the card included a gourmet grocery store, a tailor and a pest control service.
Is the Synchrony HOME Credit Card a good deal?
Earning 2% back on certain home-related spending is decent, especially since that's a relatively unique bonus category. But you can do better, even among more traditional store cards.
For instance, the Lowe's Advantage Card — also issued by Synchrony — offers a 5% discount on every eligible Lowe's purchase. And it goes a step further than the Synchrony HOME Credit Card: For Lowe's purchases of $299 or more, you get to pick whether you want 5% off or a six-month promotional financing period.
If you don't want to pledge full home-improvement loyalty to Lowe's, plenty of general rewards cards can offer richer rewards no matter where you spend. The Bank of America® Cash Rewards credit card, for example, earns 3% back in a category of your choice among six (home improvement/furnishings is one of them) and 2% back at grocery stores and wholesale clubs for the first $2,500 of combined bonus category/grocery store/wholesale club spending per quarter. All other spending earns an unlimited 1% cash back.
Or if you don't want to mess with bonus categories at all, the Citi® Double Cash Card – 18 month BT offer earns a high flat rate of 2% back on everything you purchase: 1% back when you buy and 1% back when you pay it off.
And unlike the Synchrony HOME Credit Card, these kinds of general rewards cards can be used anywhere. You're not limited to a list of eligible retailers.
If you're looking to finance a large home-improvement purchase over time, the Synchrony HOME Credit Card can help, but be aware of the potential pitfalls of its deferred interest promotion. With this offer, the interest isn't waived; it's merely put aside. If you pay in full before the promotional period is up, you won't owe any interest. But if you owe even $1 when that deferred period ends, you'll have to pay up on the interest that was accruing on the entire balance from the date of purchase.
And with the Synchrony HOME Credit Card, that could be costly indeed. As of Feb. 12, 2019, the card was charging an ongoing APR of 29.99%. That's a much higher interest rate than you'll find on many general-purpose credit cards.
If you're not sure you can fully pay off your bill in time, look for a card that offers a true 0% intro APR on purchases — meaning you won't be charged interest retroactively. No interest accrues during the promotional period, and when that period ends, the interest is charged only from that date forward and only on the remaining balance.
The U.S. Bank Visa® Platinum Card is a NerdWallet favorite in this category. It comes with an intro 0% APR for 20 billing cycles on purchases and balance transfers, and then the ongoing APR of 13.99% - 23.99% Variable APR.