Despite IKEA’s accessible pricing and DIY flat packs, if you’re looking to furnish an entire room or do a floor-to-ceiling kitchen remodel, your total at the IKEA checkout can add up quickly.
If you don’t want to be surprised at the register or have to wait for the home of your dreams, IKEA offers several options to their customers who are interested in financing.
We’ll explore them below so you can decide which choice is right for you.
Here’s How IKEA Handles Financing:
If you’re looking to make payments on your IKEA purchases, you can use the IKEA Projekt card. This comes with 0% APR for 6, 12, or 24 months. IKEA has also partnered with buy now, pay later companies, which allow customers to spread their purchases over a few monthly payments.
IKEA “Projekt Card”
IKEA offers cards to customers looking to make a large purchase, like preparing a nursery or remodeling a kitchen or bathroom.
This card isn’t for buying one singular item, such as a couch or appliance, but everything does have to be purchased in the same transaction on the IKEA Projekt card.
The card offers promotional periods with 0% APR. The promotion length depends on how much the purchase is available at the register.
For $500 to $1,000, the cardholder receives six months of 0% APR. According to their Projekt Card payment estimator, a $500 purchase would cost about $84 spread out over six months. If the cardholder makes all six payments on time, they wouldn’t be subject to any interest.
For $1,000 to $2,500, the promotional 0% APR lasts for 12 months. For example, a $1,500 purchase would cost about $125 a month for 12 months with 0% interest.
For big spenders going above $2,500, the promotional period lasts 24 months.
Again using IKEA’s estimator, a $3,500 purchase would cost about $146 monthly for two years of 0% interest.
Minimum Payments:
It’s important to note on this, and any store credit card, that the minimum required balance may be a bit misleading.
It’s essential to keep track of how many months you have left in your promotional period and pay that amount each month, which may be more than your minimum due.
Interest:
You will be subject to hefty interest rates if you don’t get everything paid off in the promotional period.
The website lists a 21.99% rate, but the Finance Options page of IKEA’s US website does stipulate that “Interest will be charged to your account from the end of the promotional period on any remaining promotional plan balance.”
Therefore, you won’t be back-charged interest on the total purchase amount after that promotional period.
Instead, you’ll pay the interest on the remaining balance until it is paid off.
IKEA Visa Credit Card
If you’re an IKEA regular, you may be interested in the IKEA Visa Credit Card. Instead of functioning like the Projekt card, this Visa is a rewards credit card.
It comes with IKEA-specific rewards, but a cardholder can use it anywhere that takes Visa cards.
If cardholders open and use their IKEA Visa on the same day, they can get $25 off a $25+ purchase. If cardholders put $500 on the card within three months of opening the card, they also get $25 IKEA Rewards Dollars.
This $500 must be on non-IKEA-related purchases, which means that Traemand and TaskRabbit purchases to help with installation do not qualify within that $500.
Rewards:
- Get 5% back on IKEA, Traemand, and TaskRabbit purchases when you put them on the IKEA Visa.
- Get 3% back on food and utility purchases on the IKEA visa.
- Get 1% back on all other purchases.
Qualifying For IKEA Credit Cards
You can get preapproved with a soft inquiry for the IKEA Projekt card, which won’t cause a temporary drop in the customer’s credit score.
However, for those who decide to move forward and formally apply, IKEA will run a hard inquiry, which will cause that temporary drop.
For the IKEA Visa Credit Card, some customers may receive a preapproval offer from IKEA. However, there isn’t an option to select prequalification with a soft inquiry.
Customers who want to access this card must submit a formal application and be subject to a hard inquiry.
Comenity Bank:
IKEA’s credit cards are backed by Comenity Capital Bank, a 32-year-old bank headquartered in Salt Lake City, Utah.
This bank works with retail companies to manage their credit card programs.
Buy Now Pay Later
Buy Now Pay Later (BNPL) programs have been gaining popularity in the online shopping arena for quite some time.
Customers see an option at checkout to split their payment into four or six monthly installments using a third-party service.
The name of these services varies depending on the region, but if offered, the customer will see the option to break up the payment when they check out.
The company will usually store the customer’s card information to make the remaining payments automatically.
Final Thoughts
Many stores offer to finance purchases for their customers, and it’s essential to read the fine print and carefully consider if these options make the most financial sense.
While they’re relatively easy to sign up for, store cards may get hasty or excited customers into hot water.
Customers may want to explore their other options, including credit cards or personal loans from their current banking institutions. These may not offer the same benefits, but they may make more sense over time.