There are a few ways to make a car payment with a credit card, whether you’re buying the car or just leasing it. The first is to pay directly with your card, which some (but not all) auto lenders will allow. You may have to pay a fee, if this proves to be a viable option, but you can also earn rewards. The second way is to see if your lender accepts payments through mobile payment services like Venmo, which you can fund using your credit card. They typically charge credit card fees, too. The last way to pay your car payment with a credit card is to transfer the balance from your auto loan to a credit card. In many cases, you’ll have to pay a balance transfer fee, but it may be worth it for a 0% balance transfer APR.
Here’s how to pay a car payment with a credit card:
Directly: Most auto lenders won’t allow you to pay directly by card, since it ends up costing them a lot extra to process. And those that do allow credit card payments may try to pass that extra cost off on you as a convenience fee. Paying directly with a card gives you the chance to earn rewards on your car payments, but it may also subject large balances to high interest rates if you’re not careful.
Mobile payment services: These applications allow you to transfer money from user to user, and you can fund them with a credit card. Payments count as purchases, not cash advances, so you can earn rewards. But there are fees to contend with. Venmo, for example, charges 3% of the transaction amount.
Balance transfer: Ten major issuers allow you to transfer an auto loan balance to a credit card: Bank of America, Barclaycard, Capital One, Citi, Discover, PenFed, USAA, U.S. Bank, Wells Fargo and SunTrust. The average balance transfer credit card offers a 0% intro rate for the first 12 months and charges a 2.83% transfer fee.
If you can avoid fees and your credit card rewards you well, it can be worth your while to make your car payments with a credit card. But if you do have to pay fees, just be sure that the rewards you’ll get exceed the cost of the fees. Otherwise, it’s not worth it.
Depending on your lender, you may be able to make your monthly car payments by credit card. And there are advantages and disadvantages to doing so. One of the main disadvantages is that some banks and credit unions charge higher fees, to cover their processing costs. The main advantage to paying your car loan with a credit card is that you could get cash back or other rewards, depending on the card you have.
You can, but only if you've got cash back, or some other good reward. Otherwise, there's just no point in it.
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