In November, we are doing a big home renovation which we have saved for for years. We do have the full amount already saved.
The construction company offers a 1 year, no interest loan for their services. We are purchasing materials on our own (which saves a ton), so this loan would only be for labor, a total of $21,300. Materials will be no more than $15,000. Probably closer to $10k, but we've budgeted for $15k just in case.
My question is twofold:
1. In repaying the one year, 0% interest loan, would we be better off to make regular payments? Put our savings to work for another year (high yield savings account), then pay it off right before it is due? (Defaulting is not an option, just trying to maximize this unexpected opportunity)
2. This got me thinking that we should explore a 0% APR for 15-18 payments, reward-earning, new credit card for the materials. Any referral codes/recommendations on such a card?
Also, does anyone see a huge problem with using these types of tools? I don't really understand why the company offers such loans. Granted the interest rate is ridiculous if you don't pay the balance off in 1 year, so maybe they make money off of some people.
Thanks in advance for your help!
ETA: We have no debt other than our mortgage and the high end of the "Excellent" range for credit.