If you are paying cash or need a loan, find out before you start shopping how much you can afford to spend by getting prequalified for your financing. If you end up using a credit card, make sure you're using it in the smart way: Save up the money you need to pay off the balance to avoid paying interest -- which increases the real price of the item -- ASAP. If you must carry a balance, use the card in your wallet with the lowest interest rate. And don't automatically apply for a store card just to get a discount (or other perk like free delivery) if there's a chance it may take you longer than you anticipate to pay off the balance.
For example, interest rates on a Home Depot (HD) credit card range from 17.99 to 26.99 percent, while the average interest rate for all variable-rate credit cards is 14.59 percent. If you charge a $30,000 kitchen remodel at 14.59 percent, and commit to sending your credit card company $600 a month for the life of the loan, you'll end up paying nearly $17,000 in interest -- and it'll take you 6.5 years for your balance to reach $0. If you use a credit card with 17.99 percent interest and the same $600 monthly payment, it will take you almost 8 years to pay off that kitchen and set you back a whopping $26,000 in interest. (Yes, that's $9,000 more.)