What You Need to Know About IKEA Financing

If noshing on Swedish meatballs while perusing aisles of minimalist Scandinavian-inspired home furnishings sounds like a fine way to spend the afternoon, you’re likely a huge fan of IKEA.

The iconic do-it-yourself retailer makes it easy to load up your shopping cart by offering IKEA financing for both smaller, everyday purchases and larger, home remodeling projects. But IKEA-branded credit cards aren’t your only financing options.

IKEA® Projekt credit card

For larger projects, such as a home renovation or kitchen remodel, qualified customers may want to check out the IKEA® Projekt credit card.

This form of IKEA financing has the potential to save you money on interest, as you’d qualify for a 0% APR financing period based on your purchase amount. IKEA automatically enrolls customers in the six-, 12- or 24-month financing plan on eligible purchases, but you can opt out of the plan if you wish. Any remaining balance after this period is subject to the standard purchase APR of 21.99%.

You can see if you qualify for the IKEA® Projekt credit card without affecting your credit score. Prequalification results in a soft inquiry on your credit report. If you choose to formally apply, there is a hard inquiry.

IKEA® Visa® Credit Card

Whether you’re planning to update a living room or furnish a college dormitory, the IKEA® Visa® Credit Card may provide you with the purchasing power you need to get the job done while earning cash back on IKEA purchases.

There is no limit to the amount of rewards you can earn. IKEA also offers a loyalty program, IKEA Family, that provides discounts, rewards and a free hot drink each time you visit an IKEA store. When you apply for an IKEA® Visa® Credit Card, you’re automatically enrolled in IKEA Family.

Cardholders may also qualify for other exclusive benefits, including:

• $25 off your first IKEA purchase of $25 or more
• $25 IKEA reward certificate
• Auto rental collision damage waiver

As with anything else, the devil is in the details. For example, you must open and use your IKEA® Visa® Credit Card the same day to qualify for $25 off your first purchase. You’ll also need to make $500 in qualifying purchases outside of IKEA within the first 90 days to scoop up your $25 IKEA reward certificate.

Although IKEA extends preapproval offers for the Visa credit card to pre-screened candidates, the company doesn’t allow you to prequalify before submitting a formal application. Make sure you read your cardholder agreement carefully for other program specifics.

Alternatives to IKEA financing

If you don’t qualify for the above financing options, or if you just prefer not to use them, don’t count yourself out just yet. Personal loans and traditional credit cards may offer you better terms, for example, while financing companies boasting fee-free alternatives for online shoppers have become more popular in recent years.

Here, we’ll take a look at four options that may save you even more money on your next IKEA  purchase:

Quadpay financing

Quadpay is a point-of-sale financing company that can help you fund larger IKEA purchases, allowing you to spread the total amount into four equal payments over six weeks.

The app gives you an available balance to spend, similar to the spending limit on a credit card. It leaves out many of the disadvantages of a conventional line of credit as well. Applying won’t hurt your credit score, for example, and you don’t pay interest on your purchases. Those that meet Quadpay’s confidential assessment guidelines also get approved instantly, and can start shopping at IKEA within minutes of approval.

As you make payments toward your purchase, the app frees up your available balance in real time. However, this balance also limits the purchases you’re able to make. The factors that affect your total available balance will look familiar to credit cardholders:

• The age of your Quadpay account
• Your payment history
• The state of the economy

Personal loans

Personal loans are lump-sum loans that are repaid in fixed monthly installments over a set period of time, typically a few years. Lenders rely heavily on your credit score to determine your loan eligibility and to set your APR. Beyond your credit score, lenders will usually consider your debt-to-income (DTI) ratio as well.

Personal loans are typically unsecured, meaning they don’t require collateral, but borrowers with subprime credit may have an easier time qualifying for secured loans. (The collateral you provide backs the loan; if you default, the lender can seize the collateral to help offset their losses.)

If you decide that a personal loan works best for your IKEA financing needs, make sure you are aware if there are any origination fees, early payoff penalties or finance charges before applying for a personal loan. You can also prequalify for a personal loan with lenders on LendingTree’s marketplace to see potential loan terms without affecting your credit.

Credit cards

Borrowers with good credit can sometimes take advantage of a credit card with an introductory 0% APR to make their IKEA purchase more affordable. With these financing offers, you’ll be charged zero interest for 18 months or longer. Any balance you carry beyond the introductory period will be charged regular interest, however.

Without an introductory offer, credit cards can come with higher APRs than other types of financing, including personal loans, depending on your credit and other factors.

Budgeting and saving up in advance

If you’re not careful, using credit cards or loans to finance IKEA furniture purchases can be much more expensive than if you decided to use cash, especially if you don’t pay it off right away. Not only will you have to pay interest costs, but origination fees, late fees and annual fees can quickly accumulate and increase your total debt.

Budgeting for high-ticket purchases is a much more efficient and practical financial strategy. This is especially true when you pay for nonessential items. Whether you pay in cash or credit, you’ll still need to fund your purchase somehow; choosing cash will ultimately save you more money in the long run.

Get started on creating a budget that works for you by downloading the worksheet below:

Special financing offers are current as of date of publishing.