Editorial Policy

I’m back in debt, but that’s OK

Allie Johnson

January 30, 2014

When my husband and I made the final payment on our debt this past year, we broke out the bubbly. So, it’s a little hard to admit that we’ve decided to go back in debt.

As I’ve mentioned before, we recently did a major remodel on our house. As our funds were dwindling, we still had a little more work to be done by a plumber and electricians who don’t take plastic. We also hadn’t purchased appliances, and we needed to do some finishing touches.

To give ourselves a little flexibility, we decided to buy all of our appliances on our rewards card and do a balance transfer deal. This enabled us to leave enough money in the bank to pay our service providers.

On one hand, I’m surprised both of us were so open to the idea of taking on debt again when we were still reveling in the afterglow of debt repayment. On the other hand, this doesn’t quite feel like debt (though I know, it is). It feels more like using credit strategically.

These are the reasons we felt comfortable with taking on this debt:

  • We found a great balance transfer deal. We got 0 percent interest for 18 months and we even managed to find a deal with no balance transfer fee. As long as we follow the rules of the offer and pay off the amount we owe in time, the credit will cost us nothing.
  • It gave us the ability to make a few upgrades. At first, I argued for getting cheap, basic granite countertops (our Realtor told us to get granite for future resale). Then we fell in love with a slab of gorgeous stone with gray swirls that cost double what we wanted to spend. We also got an induction range. Our choices weren’t just blatant consumerism: We knew the countertops would give our house a polished look that could help us sell in the future if we decide to move. As I learned in the past, selling a house faster saves money. And I’m an avid cook, so a good range is important to me.
  • Using credit took away some stress. As the remodel wound down, I kept crunching the numbers and going over our choices about how we should use the money remaining in our remodel fund. Because I didn’t have hard numbers on everything — such as exactly how much the remaining plumbing and electrical work would cost — it was really making me anxious. Using credit allowed me to relax and know we’d have plenty of cash to pay the service providers and finish off our space.
  • We still have cash in the bank. I know we’ll have a good chunk of money left after the final bills are paid. We can put that toward our balance, which means we’ll pay off our card way before the introductory period ends. Basically, we have enough cash to back up a big chunk of the debt we’ve gone into.

In sum, it’s not that we absolutely couldn’t afford to complete our remodel without going into debt — but credit gave us more flexibility and the ability to buy a few things we wouldn’t have otherwise been able to afford at once.

What do you think? Is it ever a good idea to take on debt, even at 0 percent, because you want to? Not because your car died and you have no other way to get to work, but because you want a prettier piece of granite and a nicer range and the flexibility to go over your budget a little? My take: Not going into debt is always the better choice. But if you get a good deal and are confident that you can pay your debt off responsibly and fairly quickly, credit can help you feel a little richer.