There are a few ways to make a car payment with a credit card, whether you have a loan or a lease. But paying directly with a credit card probably won’t be among them, as auto lenders generally will not accept credit cards. They may or may not even accept direct debit card payments. In order to make car payments with a credit card, drivers must instead jump through a hoop or two and do it indirectly.
Here’s how to pay a car payment with a credit card:
Mobile payment services: One way to pay your car loan or lease with a credit card is to use a mobile payment app such as Venmo or PayPal as a middleman. These applications allow you to transfer money from user to user, and you can fund them with a credit card.
So, for example, you could use your credit card to pay a friend or family member through the app, and they can then make your car payment for you or give you the money to do it yourself. Just make sure you really trust the person, and be careful because payments may count as purchases or cash advances, depending on the service and the credit card issuer. But either way, there are fees involved. Venmo, for example, charges 3% of the transaction amount.
Money transfer services: Companies like MoneyGram and Western Union allow you to directly pay a collection of participating billers, and you can fund the transaction with a credit card. However, this may be treated as a cash advance, which would mean expensive fees and interest charges would apply, in addition to the fees charged by the service. You can learn more about how this works from our explanation of how to transfer money from a credit card to a bank account.
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 12-13 months and charges a 5% - 3% transfer fee.
Cash advance: Credit card companies often give customers convenience checks, which they can use to pay for things using their credit line when plastic isn’t accepted. But using such a check counts as a cash advance, which comes with an expensive fee and a high APR that kicks in right away. You can also do a credit card cash advance at an ATM using a PIN, if you’d rather get actual cash, but it will be just as expensive (if not more costly, thanks to ATM-owner fees).
The bottom line is that these options are far from ideal and should only be considered if you’re in a real bind, or if you do the math and somehow find an opportunity to save. That could be the case if you’re able to transfer part of an auto loan to a 0% balance transfer credit card, for example.