Can You Pay Your Car Payment with a Credit Card?
In general, no, but there are some ways to consider.
Paying with a Convenience Check or Cash Advance
Although you likely won’t be able to use a credit card to pay your car payment as a standard transaction, you may be able to use a convenience check or cash advance to make the payment.
Paying with Plastiq
Plastiq is a payment platform that allows you to pay almost any merchant using a credit card – for a fee. Once you sign up, you can add your credit card to your account, then set up a payment to your car lender, even if your lender is not registered to receive payments through Plastiq. Choose the date you want to pay and how to pay: check, bill pay transfer, ACH transfer, or wire transfer.
Using a Payment Service to Pay Bills
If your car lender accepts payments through a payment platform like PayPal, you can set your credit card as a funding source to complete the transaction. With PayPal, using a credit card for a business transaction does not incur any additional fees.
Using a Balance Transfer
With a sufficient credit limit, you can transfer your car loan to your credit card. You will pay a balance transfer fee – either a percentage of the transferred amount (usually 3%) or a flat fee – but if you can take advantage of a 0% interest promotional offer, you can avoid paying interest on the balance. Of course, you should pay off the balance before the promotional period ends to fully benefit from the offer.
Should You Pay Your Car Payment with a Credit Card?
Paying your car payment with a credit card might help you bridge an income gap for a few months, but it generally isn’t a good long-term solution. Since most car lenders do not directly accept credit card payments, you will have to pay a fee with most alternatives. You may even find yourself paying fees to both the service provider and your credit card issuer.
Conclusion
Using a credit card to pay your car payment may benefit you if you can utilize a 0% interest balance transfer to save on interest. Otherwise, there is almost no advantage to using a credit card for car payments. If you cannot afford your car payment, contact your lender to discuss available options.
Frequently Asked Questions (FAQs)
What should I do if I can’t make my car payment?
You might have a grace period of a few days after your due date during which you can make the payment and avoid late fees. Check your loan documents to see your grace period. Or if you need more time to pay, you may be able to defer the current monthly payment and add it to the end of the loan. Contact your lender to learn about options available to you.
When should you make your first car payment?
The due dates for your first car payment can vary by lender but can range from 28 to 90 days after the purchase date. You will receive a welcome package or financial statement before the due date informing you when and how to make the first payment.
How much should you pay as a down payment on your car?
Generally, the down payment should be 10% to 20% of the purchase price. This allows you to avoid being upside down on your loan, meaning owing more than your car’s value as it depreciates. A larger down payment also reduces your monthly payment and the overall cost of borrowing.
Source: https://www.thebalancemoney.com/can-you-make-a-car-payment-with-a-credit-card-5205648
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