Can You Buy a Car With a Credit Card?

Can I Use My Credit Card for the Down Payment?

In many cases, you can use a credit card for part or all of your vehicle's down payment. Whether it's allowed depends entirely on the dealership.

Some dealers accept credit cards but cap the amount you can charge because they must pay processing fees on the transaction. If earning rewards is your goal, contact the dealer ahead of time to confirm their policy and any limits they impose.

Even if your dealer allows it, make sure using your card is the right move. It's generally best only if you have a rewards card and can pay off the balance immediately. A 0% intro annual percentage rate (APR) card might also be useful, but only if you have a solid plan to pay the balance before the promotional period ends. Otherwise, you could end up paying more in interest than you would have without using your card.

Using a credit card usually isn't an option when buying from a private seller.

Learn more: How Does Buying a Car Affect Your Credit?

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Can I Make Regular Monthly Payments With a Credit Card?

Auto lenders generally don't let borrowers make monthly car payments with a credit card. Some credit card issuers send out convenience checks, giving you a workaround. These checks function like personal checks but draw against your credit line. In some cases, they may even come with a 0% intro APR offer.

But while you can technically use one to make a car loan payment—or even pay off your loan entirely—you can expect to pay an upfront fee of 3% to 5% of the check amount. And even with a 0% APR intro offer, you risk facing high interest charges if any balance remains once the promotional period ends.

In other words, for most borrowers, using a credit card to cover monthly car payments isn't a cost-effective strategy.

Learn more: How Do 0% Intro APR Credit Cards Work?

Can I Purchase a Vehicle With a Credit Card?

You can sometimes buy an entire vehicle with a credit card, but just as with a down payment, it depends on the dealer's policy and your available credit limit. Because the transaction is large, your card issuer may also require advance approval to avoid a fraud prevention decline.

That said, paying for a car with a credit card only makes sense if you can pay off the balance immediately. Otherwise, the interest you'll accrue—often at a far higher rate compared to an auto loan—can make the purchase significantly more expensive.

How Buying a Car With a Credit Card Could Affect Your Credit Score

Even if you plan to pay your credit card bill in full, putting a vehicle purchase on your card can still influence your credit score in the short term.

That's because a large charge can cause your credit utilization rate—your balance compared with your credit limit—to spike. Utilization is a major factor in your FICO^® Score^Θ, and experts generally recommend keeping it as low as possible.

That said, your score depends on the balance your card issuer reports to the credit bureaus at the end of your billing cycle, not the balance you ultimately pay. If you pay the purchase off before your statement closes, the high balance likely won't appear on your credit reports.

Learn more: What Affects Your Credit Scores?

Alternatives to Buying a Car With a Credit Card

​​Using a credit card to buy a car can be tempting, especially if you're hoping to earn rewards. But for most people, there are safer and more affordable ways to finance a vehicle purchase. Here are some common alternatives to consider:

• Buy with cash. If you have the savings, paying upfront avoids interest charges entirely and keeps your monthly budget flexible. Just be sure you don't drain your savings, leaving you without a cushion if there's a financial emergency.
• Get an auto loan. Traditional auto loans typically offer much lower interest rates than credit cards, making them the most cost-effective way to finance a car over time.
• Ask for a cosigner. If you're having trouble qualifying for a loan or getting a good interest rate, adding a creditworthy cosigner may help you secure better terms.
• Use manufacturer financing. Some dealerships offer promotional financing, such as a 0% APR on new cars for qualified buyers, which cost less than using a credit card.
• Lease a vehicle. If you want lower monthly payments and don't need to own the vehicle long-term, leasing may offer a more manageable path into a newer car. That said, it's important to understand the potential drawbacks of leasing before moving forward.

The Bottom Line

Regardless of how you choose to pay for your car, it's a good idea to check your FICO^® Score before heading to the dealership to know where you stand.

If your score needs some work and buying a new vehicle isn't a necessity, it may make sense to take some steps to improve your credit in case you need to apply for a loan. Doing so could save you hundreds or even thousands of dollars in interest.