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Can You Buy a Car with a Credit Card?

For many of us buying a car is the second largest purchase that we’ll ever make. Since it often requires financing, it’s been compared to buying a home — which is commonly our first largest purchase in terms of total dollars spent. So you likely question yourself, “Can I buy a car with a credit card?”

Spoiler: Yes, you can. With the right credit card at the right dealer.

But it may, or may not be, the right choice for you. You don’t want to miss out on juicy credit card rewards like cash back, points for goodies, and flyer miles. Maybe you’ve already added up — and spent — your Chase cash-back rewards from making a massive, big-ticket spend like this.

But you also want to be knowledgeable regarding any credit card processing fee, high interest rates, and your credit limit.

We’ll discuss the pros and cons of paying for a car with a credit card, including the chance that car dealers and financial lenders will accept this payment method. Additionally, we’ll also explore a few alternative ways to fund your new car purchase.

Can I Buy a Car With a Credit Card?

Possibly, yes. Credit cards are typically accepted at dealerships for vehicles. It’s quite possible that you can even pay for the entire vehicle’s purchase price using a credit card.

However, it is more likely that the dealership will impose limits for a large purchase like this. They may only accept a credit card toward a portion of – or all of – the down payment.

The amount that can be paid with a credit card will vary based on each dealership’s payment policies. Contact your local dealership and credit card issuer to see if a credit card is an accepted form for a car payment. The dealership may impose a surcharge or credit card processing fee that would negate any perks you get from using your card.

Also, the card limit may not be high enough to buy a car. For U.S. spenders, the average credit card limit is $12,945 whereas the average cost for a new vehicle is $48,000. 

And while you could request a credit limit increase or apply for additional new credit cards, doing so will lead to a hard inquiry on your credit report. This will result in lowering your credit score.

Dealerships That Accept Credit Card Payments

It is rare for a dealership to accept credit card payments to purchase the car for its entire price. However, almost any dealership will accept credit card purchases toward the full or partial down payment. They may charge you a transaction fee or a convenience fee.

Here is a list of some dealers that will accept credit cards. Please note that this list is subject to change at any time.

Additionally, a select few auto manufacturers, such as GM, Mercedes, and Lexus, each have their own co-branded credit cards.

Why Dealerships May Not Accept Credit Card Payments

Even if the credit limit can cover the entire vehicle purchase, car dealerships are discouraged from accepting credit card payments because they pay a processing fee on all credit card transactions.

The processing fee can range from 2% to as high as 5%, which translates to a $1,000 fee on a $20,000 purchase. This cuts significantly into the dealership’s profits.

Another reason car dealers avoid credit card payments is the potential of being hit with a chargeback.

Finally, credit cards are generally unsecured debt.

Pros & Cons of Buying a Car With A Credit Card


  • Costly transaction fees add up.
  • Convenience fee or other surcharges.
  • High-interest fees can quickly grow and compound.
  • The high credit utilization ratio lowers your credit score.


  • Rewards credit cards for cash back, points, or miles.
  • 0% intro APR for a period (if offered).
  • Convenience – it’s easy to just pull out your credit card to pay.

Is It a Good Idea to Buy a Car With a Credit Card?

It can be worth it if you have the funds to immediately pay off the credit card balance before the interest accrues.

Delaying paying off the car purchase transaction on a credit card will lower your credit score as your total credit utilization rate goes up.

Explore all payment options to weigh in all the pros and cons of each method. Keep an open mind and take your time so you don’t heavily focus on the reward potential of using a rewards credit card. The number one priority is to get the best deal possible for your vehicle at the car dealer.

What’s the Best Credit Card to Use to Buy a Car?

The best credit card to use to buy a car is one that has an introductory period of 0% APR on purchases.

This amazing promotion has no interest accrual on transactions for a set amount of time. Some credit cards offer promotional periods of 15 to 21 months, that’s almost 2 years of interest-free goodness.

You just need to be aware of when the promotional period ends so you do not get slapped with a sudden massive charge of interest.

The best overall credit card is the Discover it Cash Back.

  • 5% cash back on everyday purchases.
  • Unlimited cash back match on all cash back earned at the end of the first year.
  • 0% Intro APR for 15 months on purchases.
  • No annual fee.

Keep Reading: Best 0% APR Credit Cards

Manufacturer Credit Cards

Here are some of the best manufacturer credit card options.

American Express Mercedes-Benz Credit Card

  • $5,000 spent each year will earn a $500 certificate toward the purchase or lease of a Mercedes-Benz vehicle.
  • 0% APR introductory period for 6 months. $95 annual fee.

Mopar Rewards MasterCard

  • Points earned are good for a period of 7 years before they become invalid, and you can apply them toward the purchase of any car, part, or service.
  • 0% APR promotional financing for the first 6 months. No annual fee.

CapitalOne BuyPower Cards

  • 5% earnings on the first $5,000 spent each year and 2% unlimited earnings afterward. No expiration on rewards.
  • Earnings can be applied toward the purchase of Buick, Cadillac, Chevrolet, or GMC.
  • 0% APR promotional financing for the first 12 months.

Lexus Pursuits Visa

  • 5 points per dollar spent at Lexus dealerships and 1.5 points per dollar on other purchases elsewhere.
  • Points can be redeemed for only Lexus vehicle purchases and leases. Also includes Lexus service, parts, accessories, and statement credit.
  • No annual fee.

Other Payment Options to Consider

  • Pay with cash: Cash is king and the best payment method for quickly obtaining your vehicle’s title the quickest. Car dealerships may not be enthusiastic when you purchase the car outright with cash all at once. They prefer to make money by charging interest through long-term monthly payments (typically 24 to 84 months). But you’re saving on any interest charges when you buy a car in cash. It is best practice to not disclose to the dealership that you are paying in cash too early. Be sure to first negotiate a lower price and then advise of your preferred payment method.
  • Car financing: A popular payment option for a car purchase. You are able to purchase a vehicle by taking out an auto loan and borrowing the necessary amount. Fixed interest rates for auto loans are often offered at much lower rates than those offered by credit card companies. You can even obtain lower interest rates if you have good credit. If you have bad credit, there may be lenders who are prepared to offer financing through a subprime loan with higher interest rates. Before heading to the dealership, try to obtain a loan pre-approval from a financial institution like a bank or credit union, to see what you have to work with. You’ll be in a better negotiation position since the dealership will compete with the auto loan lender and may offer you a better interest rate.
  • Co-sign a loan: If you don’t have a good credit score or credit history, then you can consider having a co-signer for your auto loan. A co-signer is commonly a family member or significant other willing to take on the liability. Therefore, be very mindful of making payments on time. Any missed payments will negatively impact your credit and ding the co-signer’s credit score too — making Sunday dinner extra awkward.
  • Trade in a vehicle: If you already own a vehicle, then you may be able to trade it in and use the trade-in value as a down payment toward your vehicle purchase. This also saves you the time and hassle of privately selling your car.

Can I Use a Credit Card to Pay Off My Car Loan?

Typically, lenders do not allow borrowers to make monthly payments with a credit card. The reasoning is that using a credit card debt to pay off another debt is risky, and increases the chances of a borrower defaulting on the loan.

However, it is possible to use a credit card to make a loan payment by using a third-party payment provider like Plastiq.

Plastiq is able to process credit card payments for a wide variety of expenses, including vehicle loans, rent, and mortgages by issuing a check or an ACH payment. There is a processing fee of 2.9% for utilizing this payment platform. Keep in mind that the processing fee can negate the original reward benefits of using the credit card.

Another alternative is to use your credit card to purchase a cashier’s check but that activity will trigger the cash advance fees which have high interest rates.

If you can’t make a car payment for a month, contact the financier and ask them if you can skip that payment and have it added to the end of your loan term. If that’s not possible, borrowing money from a friend or using Plastiq and paying the fees is a better option than defaulting on your car payments.

Keep Reading: Should You Buys a New Car or a Used Car?

The Bottom Line

You can buy a car with a credit card in many instances, but it may not be the best bet for you.

Using a credit card to pay for a car comes with some benefits, but there are significant drawbacks too. Car buyers who are in a position to pay off the balance on their credit cards in a short period of time may determine that the benefits outweigh any drawbacks like credit card convenience fees or surcharges.

But for a majority of the driving population, the traditional method of vehicle financing through an auto loan (with smart terms) is going to make the most financial sense.

All in all, be smart with your personal finances. Due your due diligence in weighing your different payment options, and do everything you can to minimize debt. The less debt you have, the more you’ll enjoy your new car – or your new used car.

Grant Sabatier is a co-founder and CEO of MMG Media Group, which owns Grant is also the Creator of Millennial Money and Author of the International Bestseller Financial Freedom (Penguin Random House), which has been translated into fifteen languages. Dubbed the “Millennial Millionaire” by CNBC, Grant went from $2.26 to a millionaire in 5 years, reaching financial independence at the age of 30. Grant has been featured in The New York Times, The Washington Post, NPR, BBC, CNBC, Forbes, Business Insider, Money Magazine, The Wall Street Journal, Marketwatch, the Rachael Ray Show, and many others. He cares passionately about sharing his story to inspire others to build a life they love, reminding everyone that time is more valuable than money, and building cool stuff.
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