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Can I Buy A Used Car With A Credit Card

While it may be unconventional to the average consumer, there is nothing that legally prevents you from buying a car with a credit card. As long as your credit limit is high enough, you can put down a down payment or even a complete purchase with enough available credit.

can i buy a used car with a credit card


With that said, many dealerships have a dollar limit on credit card payments. Merchants are charged a fee for credit sales, and those fees are a small percentage of the total sale. So on a large purchase, like a brand new car, the dealer could be spending hundreds or even thousands of dollars just on card fees alone. For this same reason, some dealers will place a 2-3% surcharge on credit card purchases to help offset the incurred costs. Exactly how much you can put on your card will be up to your dealer, but most will limit credit card charges to between $5,000 and $10,000.

Another potential option that is worth mentioning is getting an automakers' branded credit card. Much like a regular credit card, you earn rewards with every purchase, and you can redeem these rewards toward the purchase of a car. In theory, this is a viable option for those with good credit. However, you would need to spend a lot of money to earn enough rewards to buy a new car or even to make a significant down payment.

For many people, it might make sense just to try and look for a low-interest auto loan instead of charging a huge sum of money on their credit card. For drivers with good credit, some dealers may even offer 0% financing to well-qualified buyers. While it may not present the instant gratification that credit card reward does, it may end up being more financially beneficial in the long run.

Sure, you can buy a car with a credit card. But is it a good idea? The benefits of using a credit card to buy a car will depend on your finances and how you manage debt. Before you take your credit card out of your wallet, make sure you understand the impact this purchase could potentially have on your credit and finances.

You may be able to avoid damaging your personal credit by using a business credit card to buy a car. The activity on business credit cards is only reported to business credit bureaus unless the account is delinquent.

If you can buy a car on your credit card, consider contacting your issuer to inform them of the upcoming purchase. An unusually large purchase could trip fraud protection measures, and the transaction might be declined.

Flat-rate rewards cards are another option. They can offer 1.5% or 2% back for every purchase and often provide 0% APR offers on purchases, which would keep you from having to transfer your balance and pay a balance transfer fee.

But you should only consider swiping your card if you have the money to pay off the balance immediately or you have a plan to pay off the balance without incurring interest charges or damaging your credit scores.

Sean Messier works to empower individuals with the knowledge required to use credit cards responsibly and to their advantage. His writing and research-based background has granted him experience in an array of topics, from finance to business and beyond. Sean distills the knowledge accumulated over years of experience in the credit space into consistent, actionable articles, guides, and reviews.

Like all merchants that accept credit cards, car dealerships have to pay processing fees for every card transaction, so they have their own rules about whether or not you can pay using credit. Some may only allow you to charge a portion of the down payment, while others could allow you to fund the entire car cost on a credit card. If you are thinking about using your credit card, first negotiate the car price before telling the dealer your method of payment.

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, like the Chase Sapphire Reserve, you probably won't be able to fund the full price of a car via credit card.

On the other hand, your card may come with a program especially for car-buying. Cardholders of The Platinum Card from American Express (another high credit limit card), or any other type of Amex members, can try using the American Express Auto Purchasing Program, which connects you to dealers who accept American Express and let you charge $2,000 or more toward a car purchase on your Amex card.

You might feel the temptation to buy your car with a rewards credit card so you can cash in on a big welcome bonus. But unless you have enough cash to pay your balance in full immediately after charging the car onto your credit card, you'll want to use a 0% purchase APR card instead. Cards with zero-interest financing give you time to pay off a new car without incurring additional charges.

The U.S. Bank Visa Platinum Card is one of the best low interest cards with 0% introductory APR for the first 18 billing cycles on new purchases (then 19.24% - 29.24% variable APR). With a card like the Chase Freedom Unlimited, you get no interest on new purchases and balance transfers over the course of 15 months from account opening (then 19.49% - 28.24% variable APR; there's a intro balance transfer fee of $5 or 3% of the amount of each transfer, whichever is greater in the first 60 days. After that, the fee will be either $5 or 5% of the amount of each transfer, whichever is greater.)

You could get instant cash back with a card like the Alliant Cashback Visa Signature Credit Card with its 2.5% cash back on your first $10,000 of qualifying eligible purchases (1.5% for purchases over $10,000).

Or easily hit the spending threshold to redeem rewards by using the Chase Sapphire Preferred Card. The card has a 60,000-point bonus offer at sign-up after you spend $4,000 on purchases in the first three months.

If you're in the market for a new car, consider the payment options your dealership offers; if they don't offer what you want, take the time to shop around. The decision to charge a new car purchase depends largely on whether or not you can pay the credit card balance off immediately, or if you have a plan to do so without earning interest. Granted you do, you can really reap a lot more value than just a new set of wheels.

Information about the Hilton Honors Aspire Card, Alliant Cashback Visa Signature Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

Using a travel credit card to earn rewards for purchases you'd be making anyway is a great way to defray the cost of your next vacation, as long as you pay off your balance in full every month. It can even make sense to pay an extra fee (using services like Plastiq) to pay rent, mortgage or taxes with a credit card when you're working toward meeting a card's minimum spending requirement.

In the past, TPG readers have asked if you can use a credit card to buy a car. The short answer is, yes, but it's not exactly that simple. There are a handful of factors to consider before you pull out the plastic to pay for your next ride. Before you swipe or tap, make sure it's a good deal because getting a good price on the car is more important than earning rewards for the purchase. However, using credit cards for large purchases is a good way to stack up rewards, so let's look at when it makes sense to do just that.

Before you put a five-figure purchase on your credit card, you'll want to have the cash available to pay off your card in full. Otherwise, you'll end up paying an interest rate many times higher than what it would cost to finance the vehicle. The one exception to this is opening a card with a 0% APR offer. Be sure that the 0% offer applies to new purchases because there are usually fees (3%-5%) associated with balance transfers.

Buying a car with a credit card might take some legwork. For example, TPG Loyalty and Engagement editor Richard Kerr paid for a $40,000 car with The Platinum Card from American Express, but he haggled with five dealerships before he found one willing to play ball and allow him to use his card for the full purchase price. However, if you're charging a smaller amount on your card (to pay for the down payment or a portion of the car), you'll find more dealers willing to accept that deal.

Many dealerships are hesitant accept large credit card payments because of the process fees (up to 3%) they pay when you use a card. This is something to keep in mind when you're working out the purchase price. One strategy is to negotiate a price you'd be willing to pay for the car before you mention paying with a credit card, which, in turn, might invite another round of negotiations.

I'm more comfortable going for the low-hanging fruit (charging a portion of the payment). It can be worth it to pay some extra fees if you're going to earn a big introductory bonus that's worth many times what you'd pay. You might even be able to split a large payment across multiple cards and meet several minimum spending requirements at the same time.

If you want to keep it simple, you should take advantage of the American Express Auto Purchasing Program, which connects card members to 10,000+ dealers, who are willing to accept an Amex card for at least $2,000 of the purchase price. Check out this review of the Amex Auto Purchasing Program to learn more about when you should and should not use the program. This is a good choice if you don't want to bother with haggling at the dealership.

Once you have your dream car in sight, you'll want to get the most bang for your buck. Usually that means putting the purchase on a newly-opened card so you can earn its introductory bonus offer. But if you haven't recently been approved for a new card or two, then use a card that either:

If you want to earn the most value for your purchase, you should earn transferable points, such as Amex Membership Rewards or Chase Ultimate Rewards. The Blue Business Plus Credit Card from American Express earns 2x Amex points on the first $50,000 in purchases each calendar year, then 1x. So it's a solid choice, but right now, The Business Platinum Card from American Express has a welcome bonus of 120,000 Membership Rewards points after you spend $15,000 on eligible purchases with the Business Platinum Card within the first three months of card membership. A large purchase is a great way to not only earn the introductory bonus, but the Business Platinum card also earns a 50% bonus (1.5x Amex points) on eligible U.S. purchases of $5,000 or more (up to 2 million bonus points per calendar year). 041b061a72


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