>> Credit cards are leading 11 million Americans—many of them millennials—to waste $1.2B by overpaying for critical home renovations.
That's according to the 2017 At-Risk Renovator Report by Hearth [https://www.gethearth.com/]—a fintech startup that helps homebuyers make smart financial decisions during renovations. Their alarming new report studies "at-risk renovators"—homeowners with older homes who urgently need improvements but don't have enough home equity to qualify for secured loans.
*** HEARTH AT-RISK RENOVATOR REPORT ***
An at-risk renovator is defined as someone who (1) has potential home equity in the 4th quartile; (2) has a home built before 2000; (3) is a homeowner; (4) is likely to do a home improvement project; and (5) has a credit score above 575.
>> 37% OF AT-RISK RENOVATORS ARE MILLENNIALS
11 million Americans qualify as at-risk renovators, and 4.1 million of them are millennials. Millennials are buying homes, but they come with their own set of financial challenges—these are older homes that urgently need renovations.
>> 20% OF AT-RISK RENOVATORS RELY ON CREDIT CARDS
There are 3 main home improvement financing options: home equity loans or lines of credit, personal loans, and credit cards. Because at-risk renovators are unlikely to have equity, they can't access the first type of loan. Most have never heard of a personal loan (a fixed monthly payment loan that doesn’t require home equity). So that leaves credit cards—which, relative to a personal loan, lead to an average overspend of about $1,000 per person on a $20,000 remodel.
>> AT-RISK RENOVATORS ARE WASTING $1.2B BY OVERSPENDING ON RENOVATIONS
Since credit card payments are easy to miss and carry high interest rates, at-risk renovators who rely on them for renovations are spending up to $1.2 billion more than they would if they used a personal loan. That's the same amount the government spends on the entire Global Climate Change Initiative.
>> AMERICA'S TOP 10 OVERSPENDING STATES
Calculated by the average potential overspend by at-risk renovators per state
#1: California ($219M)
#2: Florida ($68M)
#3: Texas ($66M)
#4: New York ($59M)
#5: Pennsylvania ($55M)
#6: New Jersey ($52M)
#7: Illinois ($50M)
#8: Washington ($50M)
#9: Ohio ($49M)
#10: Massachusetts ($44M)
For more on this report, read this: https://www.gethearth.com/
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