Credit cards are being used for different purposes, like paying for groceries, streaming, travelling and making car payments. Although some lenders do not permit credit card to be used by lenders, the majority allows it.
If you want to avoid paying interest on a car payment or you want to earn cashback, you can use a credit card to do that. So how can one now make a car payment with a credit card? This information will be available in this post, you just have to read to find out how.
How To Make a Car Payment With A Credit Card
There are several ways you can make car payments, but it will depend on your credit card issuer. However, here are some processes to follow:
Cash Advance
Cash advance is when you make use of your credit card to get cash. However, not all credit card permits cash advances, it depends on your issuer. But if yours accepts a cash advance, follow the steps below.
- First, you withdraw cash from your credit card from an ATM.
- Then you deposit the money into your checking account, to enable you to pay your lender.
- Through your bank’s online portal or its mobile app, you will demand a cash transfer from your credit account to your checking account. These funds can be used to pay your lender.
- Then you have to get a convenience check to get a check advance check from your credit account directly.
- After this, you can now make the check out to your lender to make your car payment.
Convenience Check
Convenience checks can be used by some credit card companies to make payments. This check is just like a traditional check, but the money does not come from your cash reserve rather it comes from your available credit balance.
There are two available options that you can use in making your card payment with a convenience check. The first option is to make the check payable to yourself, then deposit it into your checking account and you make your car payment. The other option is to make the check out to your lender, keep it in an envelope, and then send your payment through mail.
Balance Transfer
One other way of making a car payment with your credit card is through a balance transfer. You can transfer your entire car loan balance to a credit card if you have a high limit for your credit, but know that some credit card companies charge a 3% balance transfer fee.
You can also take advantage of a no-interest promotional period to pay off your loan interest-free with your credit card. But you must make sure the balance is before the offer elapses in full to reap the rewards.
More Transfer
You can make a car payment with your credit card if the lender accepts money transfers from Western Union or other services. But you have to check your credit card issuer before using a money transfer. If your lender accepts, you can then use a credit card to do a money transfer called a wire transfer.
Payment With Plastiq
Plastiq is a payment platform. It helps you pay merchants with your credit card. You can also make your car payment through this platform. First, you need to sign up, then you add your credit card to your account and set up your car lender as a payee. And even if you are not a member, you can still use this platform.
Benefits Of Making a Car Payment With A Credit Card
There are some benefits attached to making a card payment with a credit card. Here are some of those benefits.
- Using your credit card to make a car payment will help you remove the lien against the car, thereby preventing possible repossession.
- Making a car payment with it helps you to make your monthly payment without defaulting.
- Using a card to make a car payment is a great way to pay off your car loan if you have a 0% APR balance transfer capability. And you can also pay back your balance in full before the interest starts to count.
- When you use it to make a car payment, you therefore reduce the amount you have to spend at one time.
- Using it to make car payments will get you some good points. These rewards can be converted to cash back, airline points and perks.
Commonly Asked Questions About Making a Car Payment with Your Credit Card
Can I make a car payment with a credit card?
Yes, it is possible to make a car payment with a credit card. But while it is accepted by credit card issuers, it is mostly not welcomed by auto lenders when it comes to monthly payments and this is because credit card charges merchants processing fees of up to 3.5 % on payments.
Is It Okay to Make a Car Payment With A Credit Card?
It is okay to make a car payment if your credit limits are high and if your card balances are low. You can also make a car payment if the rewards you will reap are better than the fees you will acquire, and if you have the budget, the cashflow and the means to pay the full amount of the car payment every month.
Do Car Dealers Take Credit Cards?
Some accept but some do not.
Do All Credit Cards Permit You to Make Car Payments?
Lots of credit cards will allow you to make car payments, but it will be with cash advances. Therefore, if you are not sure if your card issuer accepts, you can contact customer service. You will also need to contact the loan company to know if they accept credit card payments because most do not accept them.
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