Can you Buy a Car with a Credit Card? Learn the Pros and Cons

In order to buy a car with a credit card, you'll need to do a bit of shopping for cards as well as dealerships that allow that as a financing option.

So, when asking the question “Can you Buy a Car with a Credit Card?” The answer is Yes.

Only thing is that there are some considerations to have in mind.

When it’s done correctly, a credit card is an efficient way to buy a car. It comes with extra protection and, of course, convenience.

However, if it’s done incorrectly, then it can steadily turn into an expensive nightmare. It can ruin your credit and cause your vehicle to get repossessed.

Can You Buy a Car with a Credit Card – Things to Consider

Can You Buy a Car with a Credit Card

[A] – Best Introductory APR

When you buy a car with a credit card, the best thing is that you first go for the longest 0% APR card available. This is regardless of whether it is a purchase card or one for money transfer. You can then use it to buy the car and pay off a certain amount every month to clear it in time.

This way, the debt gets cleared at the end of the 0% period. So, you’ll not have to pay any interest and it will not have cost you a single thing (other than the cost of the car).

[B] – Some Dealers Won’t Accept Credit

In regards to this, there are some limitations that might get in your way thus forcing you to go for alternative means. First and foremost, many dealers simply won’t accept credit. Others will accept the card but only let you pay some limit on it. Other dealers will accept the credit card as a full payment, but will charge something else.

[C] – Limited Lines of Credit

On the other hand, in case you’re using a card, you’ll definitely be limited in terms of the amount you can spend. Not many cards will allow you access to a credit line of $5000; most credit limits will be lower than that.

If you have a very good credit score, you can obtain a bit more which is always beneficial. You must at least meet the payment with any deal on a card or else you risk losing the promotional rate.

Can you Buy a Car with a Credit Card – Pros & Cons:

Pros

  • When done right, you’ll buy a car with borrowed money that has no additional charges. Additionally, some cards offer purchase protection plan which can refund your money if the vehicle happens to be defective.
  • In case your card also comes with rewards, you can expect to reap from large purchases as well. You’ll also be the owner of the car from the very beginning which is not the case when you take dealer financing.
  • This is a very flexible form of payment as you only have to make the minimum payment when low on cash in a month.

Cons

  • At times, you may be unable to obtain the card that you want. In other situations, you might get the card but lack a spending limit that restricts you from making that all important purchase.
  • If you’re not someone that’s disciplined enough in paying off debt, it can become expensive as there’ll be APR fees you’ll have to pay. Also, the dealer might not be willing to accept cards or not willing to let you settle the entire amount on card.

Choose what works best for you

With this in mind, be sure to consider all options to determine which method of purchasing a vehicle is the most economical and makes better sense for you.

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