CNBC Points Pro: Can you buy a car with a credit card?
Welcome to the Points Pro, where I answer your credit cards and travel rewards questions each week. If you have a question you'd like answered, you can submit it here.
Can you buy a car with a credit card? If so, is it ever worth it?
Dan recently purchased a car and wants to know whether it's possible to pay for it with a credit card and earn a bunch of points. But more than that, does it make sense to do this?
Although it's possible to find a dealer that will accept credit cards for a car purchase, it's not common and, for a myriad of reasons, often doesn't make sense.
It is possible to buy a car with a credit card, but you may have to shop around to find a car dealer that accepts credit card payments. It can be difficult to find a dealer that will let you put the full purchase price of a vehicle onto your card.
A more realistic scenario to pay some or all of your down payment with a credit card. This can earn bunches of rewards, especially if you've recently opened a new card; big purchases can help you qualify for welcome bonuses.
But there's a big caveat: You'll typically pay a fee when using a credit card to purchase a car. Even if the dealer doesn't explicitly list a 1% to 3% surcharge, it may already be baked into the price. Seemingly small fees can add up quickly with a purchase as large as a car. For every $10,000 you spend on a vehicle, you could pay $100 to $300 in card fees.
It rarely makes sense to purchase a car with a credit card. Even if you find a dealer that accepts credit cards, you'll still need a large credit limit. Making a down payment (or part of it) with a credit card is probably as far as you should go. Even then, I believe most people are better off keeping it simple and not bothering with the math.
The fees will usually offset the rewards you earn, and credit card APRs are typically much higher than auto loan interest rates. It only makes sense to pay for a car with your credit card if you have the cash to pay off the balance before you pay interest.
If you want to make a down payment (or part of it) with a credit card, an intro APR credit card can help.
The Wells Fargo Reflect® Card comes with a 0% intro APR for 21 months on new purchases and qualifying balance transfers from account opening (after that, a variable 17.49%, 23.99% or 28.24% APR applies). Balance transfers made within 120 days qualify for the introductory rate, and a balance transfer fee of 5%, minimum $5, applies.
This card offers one of the longest introductory APR periods for purchases and qualifying balance transfers.
The Wells Fargo Reflect® Card is one of the absolute best cards you can apply for if you want to save on interest and pay down debit quickly thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
If you don't want to sacrifice rewards, a card like the Chase Freedom Unlimited® (see rates and fees) earns at least 1.5% cash back on all purchases and offers a shorter zero-interest period. You can take advantage of a 15-month 0% intro APR offer on new purchases and balance transfers, and an 18.24% to 27.74% variable APR applies after.
New cardholders receive an Intro APR for 15 months from account opening on purchases and balance transfers and a generous 1.5% cash back everywhere (at minimum).
See rates and fees. Terms apply. Member FDIC.
Read our Chase Freedom Unlimited® review.
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus. Plus, if you pair it with a premium Chase credit card that allows point transfers, you can convert your cash back into flexible travel rewards.
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
The credit cards with the longest intro APR offers typically don't earn rewards (as you can see with the Wells Fargo Reflect), so the value is in low-cost financing. Maybe you invest the money you would have spent on the down payment in a high-yield savings account. Your card issuer won't charge you interest right away, you'll have to factor the card fees into your analysis.
It's also a good idea to have a plan to pay off the card balance before the intro APR expires so you don't rack up extra interest costs. You may earn more in interest than you paid in card processing fees, but how much more? It may be less than you think and not worth the effort or risk of carrying a credit card balance.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Geico auto coverage is available in all 50 states and Washington, D.C., with 16 discounts and add-ons like roadside assistance, rental car reimbursement and mechanical breakdown insurance.
Progressive offers an array of riders, including rideshare insurance and a Deductible Savings Bank that deducts $50 each policy period you go without a claim. It also offers mechanical breakdown insurance, which covers unexpected major system failures.
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and X to stay up to date.