can you buy a car with a credit card

Can you buy a car with a credit card?

Can you buy a car with a credit card? This is one question that needs an answer but has a complicated one. Although some car dealers would be willing to receive credit card payments or allow you to buy a car with a credit card, it is not advisable as it has been chalked off as a risky move.

Some car dealers may also allow you to pay for the full purchase of a car with your credit card although the custom amongst car dealers is to let you use your credit card to make a part payment for the vehicle. However, a good number of car dealers do not accept credit card purchases for their vehicles.

Regardless, those interested in buying their dream car with a credit card will get more light on the process, how it works, and if it is a good step to take in this article.

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Do car dealers accept credit cards?

This question has an answer that varies amongst car dealers. As earlier explained, some do not accept credit cards while others allow for a down payment with a credit card. This is because the car dealer must pay a credit card processing fee for any credit card payment accepted. 

It ranges from 1% to 3.5% of the amount used for the transaction. Let’s throw more light on this; The higher the purchase, the more fees the car dealer has to pay. 

For instance, if the car you want to purchase with a credit card is worth $40,000, the car dealer must pay a 3% processing fee and this is worth $1,200. 

The business aims to make a profit and the latter is not a proper representation. Therefore, a significant number of dealerships accept other forms of payment such as cash, money orders, personal checks, etc.

Is it wise to buy a car with a credit card?

You be the judge of that after you consider the factors below:

Credit limit and credit utilization

Your credit card limit can be described as the maximum amount that you are allowed to charge on your card by the issuer. If the limit is low, then buying a car with it is impossible. 

However, if it is high, it may not be an ideal decision as to your credit utilization ratio increases as you get closer to the card’s limit. 

Note that your credit utilization is the revolving credit you’re currently using divided by the total revolving credit you have available. Note that a high ratio may affect your credit scores negatively.

High-interest charges for credit cards

It’s no more news that credit card companies charge high-interest rates. Therefore, if you can’t make a full purchase immediately and choose to make minimum payments, you could find yourself paying more in interest with a credit card. 

Here is a tip: If you have a new card with an intro APR of 0% for the purchase, and complete the payment of the balance before the expiration of the intro period, you could avoid the interest rate charges. However, if this is not the case and you fail to complete the balance before the end of the promotional period, then get ready to pay the card’s regular rate on the remaining balance.

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Other ways to buy a car without using a credit card

Using a credit card to buy a car seems appealing especially if you don’t have much cash at hand. However, if you can’t pay the credit card bill in full immediately after you receive it, you’ll only attract more costs. Find some better ways to buy a car below:

Car financing

Opting for an auto loan comes with a lower interest rate in comparison to using a credit card. Any reliable online auto loan calculator would help you decide the payment structure. Some lenders will be willing to do business with you even if you have bad credit.

Use a co-signer

You could also apply with a co-signer that has a good credit score. This would enhance your chances of qualifying and getting a lower rate that will ve affordable.

Use cash

Not everyone would be able to buy their dream cars but saving up and going for a cheaper alternative will pay positive dividends in the long run and not put your financial status in jeopardy especially when you use a credit card to buy a car that is way above your level.

Do a trade-in

Car owners could opt to trade their cars and use the trade-in value to make a down payment for a new one.


It is only wise to analyze the available payment options before you go all out to buy that car. Regardless, a plan must be in place to pay off charges immediately if you want to use a credit card to make a down payment for a car or make a full purchase to avoid crazy interest charges. This is a decision that could come back to haunt you in the future.

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