Can I Buy a Car with a Credit Card? How to Get that Done in Less time

A couple of weeks ago, I got talking with my next-door neighbor, Janet, over a number of random thoughts. Just right in the middle of our conversation, Janet popped me a question, “tell me, can I buy a car with a credit card?”

I mean, that was quite weird and hilarious, and way out of the thread of our conversation. The look on my face showed it. I couldn’t help but laugh out loud.

Well, that question changed the course of our conversation. I tried as much as I could to answer and explain stuff to her. What I told her is exactly what I want to share with you. So, ever wondered, “how do I buy a car with a credit card?” I’ll answer all your questions here.

Recently, a lot goes into consideration if you are looking to purchase a car. The reason is that buying a car is somewhat a daunting task and one really needs to be thoughtful before getting into it. One of such factors to consider is your income against what class of car you want.

In the lines to come, we’ll look fully at some of what you should consider before getting a car and most importantly whether you should use credit card to buy your new car.

Meanwhile, here’s the table of content below for an overview of what to expect in this article.

Now, let’s get down the roll…

Is it a Good Idea to Buy a Car with a Credit Card?

Sincerely, this is a dicey question to answer. A number of things are usually been considered in this regard.

One of the big factors to consider when buying a car on a credit card is your credit limit. Unless you have a card that offers a high credit limit, you probably shouldn’t consider paying the full price of a car using a credit card.

One of the reasons why this is important is because some lenders charge exorbitantly when they loan you the money to buy your car.

However, if your credit limit can pay the full price of your new car and your income is huge enough to foot all the bills, then you can pay for your car with a card credit.

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But if you know you’d be struggling to make your payment and still have a balance transfer check available, I advise you to come off purchasing a car with a credit card.

Do Car Dealers Accept Credit Cards?

Most dealers don’t accept credit cards for payment in full. There are basically two reasons for this.

One of the reasons is that if you pay in full with your credit card and are not happy with your purchase, you could file a complaint against the dealer with the card company and the dealer is charged back for the sale.

Secondly, some folks may be coming to purchase with a stolen credit card and that could be a hell of a risk for the dealer. The original owner of the card could block the card anytime and the dealer will never get his money. Nobody wants to lose the money you know.

Thirdly, most dealers pay a fee of about 1 to 4 % to the credit card company and that is an added fee for them. For instance, 2% on a sale of $50,000 is $1,000 out the door. Not so many want to make such huge payments.

These are some of the reasons why car dealers would prefer to get a down payment even if you are going to pay with a credit card.

What is a down payment? A down payment is a type of payment, often in cash, made in the early stages of a purchase of an expensive good or service.

The payment represents a percentage of the full purchase price. In some cases, the down payment is not refundable if the deal falls through because of the purchaser.

Which Car Dealers Accept Credit Cards?

Like I stated earlier, there are not so many dealers who are willing to allow you to pay with your credit card.

Nevertheless, you can find some good deals on copart.com. They’ll be willing to offer you some deals with your credit card.

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How Much Can You Put On Credit Card When Buying A Car?

How much you should put on the credit card when purchasing your car largely depends on the cost of the car. But regardless of this fact, not so many dealers accept credit cards.

We’ve already talked about some of the reasons why this is so. But if you ever find any dealer who offers to accept a credit card from you, then it wouldn’t exceed $3000.

The $3,000 credit card limit policy is everywhere strictly observed by all car dealers.

To cover the rest of your car’s purchase price, you’ll need to come up with the cash or apply for a loan at your bank. If you’re buying a cheaper used car, on the other hand, you may be able to charge the entire purchase price.

How Can I Buy A Car With My Credit Card?

1. Own A 0% Purchase Card 

First thing, you must own a card that does not require you to pay interest on your purchases. Only one card type does this and that is the 0% purchase APR card.

 After securing a card with a 0% rate, you should set up a monthly direct debit. This direct debit should meet at least the minimum payment. However, for large debts like this, it’s best to work out how much you need to pay monthly in order to pay off the debt before the 0% period ends.

When working out how much to pay off monthly, divide the cost of the car by the number of months that your card has at 0%. If this turns out to be more than you can afford, then you need to look at cheaper cards or find a way to extend your 0% period.

2. Check If Your Dealer Accepts Credit Cards

The next thing to do is to check if the dealer you intend to purchase the car from accepts credit cards. If your dealer doesn’t take credit cards, you could still pay at 0% interest using ‘money transfer’ cards. Find out how this works here.

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3. Consider Your Credit Limit

A big factor when buying a car on a credit card is your credit limit. Unless you have a card that offers a high credit limit, you probably won’t be able to fund the full price of a car via credit card.

Chase Sapphire Reserve is an example of a card that offers you high credit limits. But if your credit score is low for you to buy a car, you could learn how to increase your credit score here.

Where Can I Buy A Car With A Credit Card?

You can find some good deals on copart.com. They’ll be willing to offer you some deals with your credit card.

Conclusion

Ultimately, make sure to take your decision of getting your new car with an open mind. Properly weigh your options before taking the leap.

One thing to keep in mind is that just because you can put money down with your credit card doesn’t mean you should. In general, it’s best to use your card only if you have a rewards credit card and can afford to pay off the down payment when you get your bill.

Again, it’s important to keep in mind that purchasing a car with a credit card generally makes sense only if you have the cash on hand to pay off the balance. Otherwise, you’ll likely end up paying more in interest than you would with an auto loan.

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