About IKEA Projekt Credit Card
The IKEA Projekt is a credit card from IKEA that’s designed for those plan on spending at least $5,000 at IKEA and want reasonable long-term financing for their purchase.
The card was part of a dual-card launch in May 2018 in which IKEA also debuted their IKEA Visa, which is a rewards-based card that provides bonuses for certain types of purchases.
The Projekt, on the other hand, is a card that has a very specific purpose and, in that sense, is one of the few of its kind when you compare it the Home Depot consumer credit card.
Our review of this card is going to show you what its features, rates and fees are. These are the building blocks of virtually every credit card.
Then, we’ll compare the card to IKEA’s other credit card, as well as credit cards from Lowe’s and Home Depot to help you see the options you have when it comes to financing a project for your home.
The last part of our review will give you an overall view of the card’s pros and cons, and we’ll also give you our research-based thoughts on who we think this card is good for.
The IKEA Projekt Offer: Financing for Purchases of $5,000 or More
As we mentioned at the beginning of this review, this card is designed for those who are making purchases of more than $5,000. Typically, a purchase that big implies that you’re doing some major upgrades to your home, either via a renovation of a room or buying furniture for your home or apartment.
If you used an average credit card to make this kind of purchase, you’d most likely get a card that has a 0% offer on purchases that ranges from 14 to 21 months. An offer like this means you wouldn’t have to pay any interest for 14-21 months and, once that period is over, the credit card company would hit you with an APR of between 14% and 25%, in most cases.
This is a great deal if you’re able to pay off your purchase by the end of the 0% period. If you can’t then the interest payments will be substantial.
The IKEA Projekt card is a great alternative to a low-interest card because, while it doesn’t give you 0% on your purchases, it does give you an APR of 4.99% for 60 months.
The advantage with this offer is that, over time, the 4.99% rate over 60 months will most likely save you more money than a 14-21 month no-interest offer.
If you used the Discover it to pay off your balance and you didn’t make payments until after the 14 months of 0% interest, you’d pay $2,857 in interest by the end of five years.
If you were to use the IKEA Projekt card to repay the $10,000 balance, you’d end up paying $1,317 in interest.
As you can see, if you take five years to pay off your balance, the IKEA Projekt card’s 4.99% interest rate saves you about half the interest you’d pay on a normal low-interest credit card.
The Projekt is a better choice over the course of 30 months, too, saving you around $300 in interest over the Discover card.
There are other low-interest cards out there, but none of the popular choices have an interest rate lower than the Discover it. Other cards like the Chase Freedom Unlimited and Capital One Quicksilver will cost you more in interest payments over 30 or 60 months than the Discover card.
Important Things You Should Know About the Fine Print
We read through the terms and conditions of the offer we described in the previous section. During our research, we found some interesting information you should consider before signing up for the card.
First, the card’s non-promotional APR is 21.99%. This interest rate will kick in after one of two things happens: a late payment or the promo period ends.
These two conditions tell us something crucial. First, you cannot pay late on this card or the interest you end up getting hit with as you pay off your balance will exceed what you’d pay over time with a card like the Discover it.
Second, the fact that you pay 21.99% after the promo period ends is standard with regular credit cards – once the 0% period is over, your normal APR kicks in.
However, store cards usually implement something called deferred interest”. Basically, the credit card company gives you, for example, 0% APR for two years. The whole time that promo APR is in effect they’re calculating how much interest you’d pay based on the normal APR.
If you don’t pay off the entire balance by the end of the two years, then the company adds to your balance two years’ worth of interest based on the regular APR.
What makes the IKEA Projekt card different is that they don’t charge deferred interest. This is a big deal if you run into some financial trouble during your repayment period and you don’t pay off the balance all the way.
The last thing you need to know is that the 4.99% APR applies only to one purchase of $5,000 or more. It does not apply to multiple purchases that add up to $5,000.
We called IKEA’s customer service line to confirm this and were told, mistakenly, about other offers. Turns out those offers weren’t available at the time of publishing. This indicates that there may be other financing offers available similar to what you’d see with the Home Depot and Lowe’s cards (more on that in a minute).
Keep in mind, though, that the $5,000 spending requirement does not include what you pay for services like installation or shipping/delivery.
Pro tip: The IKEA Projekt has no annual fees.
How the IKEA Projekt Card Compares to the IKEA Visa
At the beginning of this review, we mentioned that the Projekt is one of two IKEA credit cards; the other is IKEA Visa.
In our review of the IKEA Visa, we point out that you can use the card’s variety of rewards bonuses to earn about $526 in rewards the first year and $476 every year thereafter.
The interest rate on the card is 21.99%, the same as the Projekt card. The big difference between the two cards is that the Visa focuses on yearly rewards and doesn’t have a low- or no-interest offer, whereas the Projekt focuses on special financing for purchases of $5,000 or greater.
Because the IKEA Visa has the 21.99% interest rate and because the rewards you earn have to be used on future IKEA purchases and can’t be used as a statement credit, we believe the IKEA Projekt card is the best choice for a purchase of $5,000 or more.
How the IKEA Projekt Card Compares to the Home Depot Consumer Credit Card
One of the things that made this card unique when it launched is that it offered one APR promotion: 4.99% for 60 months on purchases of $5,000 or more.
We consider this promotion unique because most cards from home improvement stores have multiple financing options. In our guide to store credit cards, we point out that the Home Depot consumer card has various tiers of financing.
Here’s a list of the card’s offers that were available at the time of publishing:
- 12 months of 0% financing on any purchases of $299 or more.
- 12 months of 0% financing on riding mower purchases of $899 or more
- 0% interest on blinds, shades and shutter installations (18-24 months)
- 0% interest on roofing, siding, gutter, and attic insulation installations (up to 24 months)
As you can see, Home Depot offers more financing options than the IKEA Projekt, which probably has more to do with the fact that Home Depot has multiple departments with a wide range of tools, building materials, installations and other products.
IKEA has its own share of different departments – bedroom, kitchen, etc. – but, as we mentioned earlier, the Projekt card didn’t offer department-specific financing deals at the time of publishing.
The Final Word: Pros and Cons of the IKEA Projekt Card
Based on our research of this card, we believe its greatest strength is that it offers low-interest, long-term financing on purchases of at least $5,000. In fact, the 4.99% APR you get and five years of financing are similar to five-year auto loans which, at the time of publishing, had an average APR of 4.21%.
Over time, that interest rate results in interest payments that are lower than what you’d pay on a low-interest card like the Discover it. Also, the length of the promotional financing is longer than what you’d get from a big purchase at Home Depot.
The negative side of the card is that the up-front bonuses are weak and there is no way to earn rewards with the card. However, when it comes to store credit cards, this is often the case. Since purchases for your home tend to be more expensive, the cards focus on financing over rewards.
In general, we believe this is an excellent card if you have a big IKEA purchase you need to make and you want to split up the payments over an extended period of time with reasonable interest rates.
If you want to learn more, read through our guide to the pros and cons of using store credit cards. We provide straightforward, unbiased advice about how store credit cards can help you and hurt you.