Car purchases are an expensive venture. Since cars are expensive and expensive, buying cars using credit card credit card could be tempting, as you could earn lots of rewards points for credit cards.
But whether or not you can purchase a car using credit card is contingent on the situation.
Some dealers allow you to charge a portion or all of the cost of a car
If you are able to charge your vehicle or not depends on the policy of the dealership you purchase from. Many dealers will take credit card payments, however they limit the amount you can charge with the card. For instance the majority of credit card companies restrict the amount you are able to charge at $5,000.
A tiny percentage of dealers will accept credit cards for the entire amount. It’s more likely to happen this when you use an account that is associated with the manufacturer of the vehicle for example, like when you purchase the Lexus car using the Lexus credit card. If the credit card comes with an auto purchase programlike American Express does and you purchase through this program increases your chances that the seller will accept the card as payment for the entire purchase.
For the majority of dealers there are strict limits put in place due to the charges the credit card processing companies charge. Dealers don’t want to pay a an 2% to 3percent fee on the total purchase cost of the car, therefore they’ll set limits on the amount you can charge for it.
Checks for balance transfer could help to make buying a car more affordable
Another way to purchase cars won’t earn you reward points but can help you save money on your car purchase. This option is to make the credit card to finance the car.
A lot of credit card companies offer check balance transfers. While they’re designed to enable the customer to pay off current credit and switch the account balance over to a different credit card, these checks can be put into your bank account and utilized to fulfill any need, even for buying a vehicle.
The advantage that comes with using balance transfer check is that many cards provide an initial zero-interest rate on the balance you transfer. This can last anywhere between six and 18 months.
If you’re considering using check balance transfers, you should be aware that certain cards will charge you a feeusually about 3% for the transfer of your balance. The cost could lower than an auto loan. Also, you must have enough credit to cover the cost of the car, and you should be aware to have your interest rate be increased if you haven’t paid off the credit card prior to the time when the initial rate expires.
Do not charge the car unless you’re willing to be able to pay it back
It is possible to charge a portion (or all) of your vehicle using a credit card to earn rewards points from your credit card or make use of the balance transfer option to place your car on your credit card and then pay the amount you owe with zero percentage interest. However, regardless of the method it’s essential to make purchases using a credit card when you are able to pay for the amount you charged.
The standard interest rate for credit cards is likely to be significantly more than the rate for a car loan. Any points you accrue from the purchase will amount to lesser than any interest you’ll have to pay.
It’s recommended to put the cash aside in order to cover the credit card after you receive your statement, if you’re charging the card, or have a plan in place to pay off the balance you transferred prior to the introduction rate expires. If you aren’t able to do that then don’t purchase an automobile with a credit card.
Do you want to pay for the car using credit card?
If you are able to find an agent who allows you charge your car and if you are able to repay the money you charged after the due date purchasing a car using credit card is an excellent method to earn lots of rewards. Be sure to not take a car to the dealership and then end up paying an enormous amount of credit card fees when you’re unable to pay back the money borrowed immediately.