Years ago tens of thousands of people used unsecured credit cards to purchase cars and even homes. Today, you can still finance a car purchase with a credit card, though it might not be as easy as it used to be.
Steps to Buying a Car with a Credit Card
Get a promotional offer – Make sure that you can finance a car at a low interest rate. The best way to do so is to use to a promotional offer for balance transfers or purchases. There are literally hundreds of promotional offers available at any one time, so finding a zero-interest promotional offer should be the easiest part of the process.
Find payment options – Many dealerships will only allow you to put a portion of your car purchase on a credit card. However, virtually all dealerships will accept a cleared check for a car purchase. If a dealership turns down credit cards, consider asking your credit card company for a balance transfer check which you can write out to the dealership. The balance transfer check also makes it easier to get special financing offers like zero-interest for 18 months, a common promotional credit card offer.
Pay it off – You’ll want to ensure that you can pay off the balance of your credit card by the time the promotional period ends. In the past, credit card companies gave consumers low balance transfer rates for life. Today, most balance transfers have a promotional period of 6-24 months, meaning that you should be in a position to make a large monthly payment toward your balance to get the most benefit possible.
Believe it or not, financing a car with a credit card may be your best option, especially if you are in the market for a used automobile. Older and less expensive used autos often carry very high interest rates on short-term car loans. In this case, using a balance transfer check or low-rate introductory purchase offer makes for a significantly cheaper financing option.