Can You Pay for a Car With a Credit Card?

• Using a credit card for a car purchase has its perks, like earning credit card rewards, but there are high interest rates if you fall behind on payments. 
• Not all dealerships accept credit cards for car purchases.
• Alternatives to purchasing a car with a credit card include electronic funds transfer, cash advance (though not recommended due to high fees), or postponing the purchase to align with your financial readiness.

Some, but not all, dealerships accept credit cards. While it may seem evident that dealerships want to make a profit by selling vehicles on their lots, credit card payments often come with several caveats that can put paying in this way in jeopardy. It’s usually best to inquire about credit card payments before visiting a dealership to ensure they fall under acceptable payment methods and what, if any, additional restrictions or limitations may apply. 

The question of buying a car with a credit card requires a similar approach to the question if you can buy a car with a debit card. These payment methods may provide convenience for smaller, everyday purchases, but charging the cost of a vehicle requires some thought. The biggest question in both instances remains, “What can you gain from this payment method versus another?”

If you know how to calculate the APR on a car loan and learn that you can’t afford to finance a vehicle purchase, a credit card charge could be your only financing option. At that point, however, the question of car ownership altogether should be first and foremost. Can you afford to buy a car now, or do your personal finances require more work? Your efforts may be better placed in improving your credit score, saving up for a large down payment, or paying off other debt before reapproaching the question of a car purchase. 

If you decide to use your credit card, ensure all other parties are receptive. Speak with your credit card issuer, like Chase, Discover, or Capital One, and mention your plans to uncover any roadblocks or hidden terms that may apply. Inquire with the dealership to see if they accept credit cards and ask about applicable fees. The more preparation you put into the process, the fewer stumbling blocks you should encounter. 

Buying a car with a credit card is one of many payment methods you can choose from. Below are several alternatives you can use to your advantage if you’re still in the market for a new car. 

Subscribe to FINN

FINN car subscriptions offer terms from six months to 12-months, with flexible mileage limits to fit your needs. Your monthly payments cover insurance, registration, and maintenance costs, in addition to offsetting the depreciation associated with driving the particular vehicle you choose. FINN’s selection of subscription vehicles includes trucks, premium sedans, SUVs, and electric cars you can use to extend your test drives and inform your next purchase. 

Electronically transfer funds

Electronically transferring funds can help you pay for a car purchase. However, most money transfer services charge a transaction fee similar to processing fees set by credit card companies. Electronic fund transfers also lack the rewards benefits you’d potentially receive if you paid with a good credit card. 

Obtain a cash advance

Getting a cash advance for a car purchase represents an arguably worse financial decision than putting the remaining balance on a credit card and carrying it for several months. Most credit card companies charge a 4% to 5% cash advance fee on the total amount you request, which increases your debt significantly without the terms and conditions most auto loans allow. Similar to transferring funds electronically, cash advances don’t qualify for rewards either. 

Pause your car buying journey

Aligning your finances to purchase a vehicle often requires specific timing. If you find that your finances can’t support buying a car, reconsider your decision. Although it can be disappointing and even frustrating, sometimes putting off the decision can help you get into a better mindset and financial position. In the meantime, you can save up, pay down other debt, and improve your credit score for better terms.