Can You Buy a Car With a Credit Card?

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Key takeaways

You can use a credit card to buy a car, but most dealerships only allow partial payments because of transaction fees.
Buying a car on credit can be beneficial if you use a rewards card with a 0% intro APR. Pay it off before the promotional period ends to avoid interest.
Alternatives to using credit include an auto loan, adding a cosigner, trading in your old vehicle, or paying with cash.

Buying a car is a big decision. You have to research the make and model, negotiate the right price, and finally decide how to pay for it. The average price Americans are paying for a new car is $49,740, according to Kelley Blue Book. Most people can’t afford to pay that much out of pocket, so they take out an auto loan.

If you don’t want to take out a loan, you may ask, Can I use a credit card to buy a car. The short answer is yes, but should you?

Let’s review what you need to know before heading to the dealership with your credit card.

Can I buy a car with a credit card?

Yes, you can buy a car with a credit card. Before you do so, have a plan to pay it off. Interest is expensive.

Credit card interest rates are high. The Federal Reserve Bank of St. Louis found that they currently average 21.37% APR. Meanwhile, the average interest rate on an auto loan for consumers with good credit is only 6.40% APR.

If you decide to finance your car with a credit card, you need to be able to pay it off before you accrue interest.

The second question you need to consider is: Do car dealerships take credit cards? Many dealerships accept credit cards for down payments, but few allow you to charge the full purchase price. Dealerships often set limits because of the transaction fees charged by credit card companies.

If the dealer does accept credit cards for the full amount, make sure your credit limit is high enough to cover the cost. Always check with the dealership first to understand their policy before using your card.

Steps to buying a car with a credit card

Before you purchase a car with a credit card, you’ll want to do some planning to know what you’re getting into.

Contact your credit card provider first

First, talk to your credit card issuer and alert them to the purchase so that the transaction goes through. A large purchase, like a car, may trigger a fraud alert and cause them to block the transaction.

You also need to check your credit limit to ensure you have enough available credit to cover the transaction. If your limit is too low, request an increase. Note that some issuers conduct a hard inquiry before raising your limit.

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Find a dealership that takes credit cards

Not all dealers accept credit cards for full vehicle purchases. Many limit card use to down payments, usually $2,000 to $5,000, because they don’t want to absorb the high transaction fees. Credit card processing fees range from 1.5% to 3.5% of the total purchase. If you’re buying a car worth $50,000 using a card, the dealership would have to pay a fee ranging from $750 to $1,750.

Call dealerships beforehand if you’re serious about using a credit card to buy a car. Ask specifically about their policies. You may need to shop around to find one willing to put the full amount on a card.

Consider the risks and rewards

Swiping your card can earn you rewards or stick you with an incredibly high interest rate. It works well with a rewards card with a promotional 0% intro APR on new purchases. Pay off the balance before the offer ends, and you won’t pay any interest. If you don’t pay off the balance on time, you could end up paying thousands of dollars in interest.

Paying for a major purchase with credit can become expensive fast. Besides the interest, the dealership may pass the transaction fee onto you, raising the price of the vehicle.

The large purchase will also raise your credit utilization ratio. Your utilization ratio is how much you’ve spent compared to your limit. It accounts for 30% of your FICO score.

Charging a car to your credit card will likely use up all or most of your credit limit. Your utilization ratio will spike, and your score will drop.

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Create a plan to pay off your balance

Credit cards have higher interest rates than auto loans. If you use a card to finance a car, you will want to use one with a promotional 0% APR offer. Then, pay off the balance before the promotional period ends.

Before you swipe your card, do the math. Determine how much you would have to pay each month to pay off your balance before accruing interest. If you only make the minimum monthly payment, you’ll find yourself paying thousands more for your purchase.

Can you use a credit card for a down payment on a car?

You can put the down payment on a credit card; in fact, more dealerships will let you do so. Down payments are typically 10% to 20% of the purchase price. A lot of times, this will fall within the range that dealerships allow for credit card transactions.

Using credit to pay for the down payment can be a smart way to take advantage of a 0% APR offer and earn rewards. The smaller balance will be much easier to pay off faster.

Do you need credit to buy a car?

While you can buy a car without credit, having good credit will make the process easier and more affordable. Lenders use your credit history to decide if you qualify for a loan and what interest rate you’ll get. If you have no credit or poor credit, you will face higher rates or need a cosigner. Before applying for financing, it’s smart to check your credit score to know your eligibility.

If you have bad credit, look at the best credit cards to build credit. Secured cards are a good first step. You can also get credit cards with no deposit to avoid upfront costs.

Once you have your card, use it responsibly. Pay your bills on time and keep your usage low. Over time, you’ll get a good credit score.

Best credit cards to buy a car

When buying a car with a credit card, choosing the right one is essential. The ideal card will have a 0% intro APR on new purchases, a welcome bonus, and a flat cash-back rewards rate. You’ll earn rewards without worrying about bonus categories and have time to pay down the balance without accruing interest.

Consider the American Express Business Platinum Card. It has a high spending limit, premium rewards, and travel perks. The Chase Freedom Unlimited is worth a look. Many Chase Freedom Unlimited reviews highlight its 1.5% cash back on all purchases and generous intro APR offers.

The best credit card will earn you rewards and help you pay off the balance without charging interest.

Credit card alternatives for car purchases

Buying a car with credit is not for most people. Here are some other options worth considering:

Car financing: Look into traditional car loans through banks, credit unions, or dealerships. These often come with lower fixed interest rates, especially if you have good credit.

Ask someone to cosign: If your credit is limited or poor, ask a trusted family member or friend to cosign a loan. A cosigner with good credit can improve your approval odds and help you get better terms. Note that a cosigner will be responsible for repaying the loan if you default.

Use cash: Paying in cash can give you negotiation power and help you avoid interest charges altogether. It also simplifies the buying process with no monthly payments. Most people can’t pay in cash, but if you’ve saved up and are one of the few who can, it’s better than using credit.

Ask about trade-in value: Trading in your current vehicle can reduce the amount you need to borrow. You can use the money as a down payment, making your next car more affordable. Even if your car is old, it never hurts to ask.

Anyone can finance a car

Click here for auto loans for bad credit!

Financing a car with no credit

You can find auto loans for bad credit or even no credit check loans through specialized lenders. Do your research and look for lenders willing to work with borrowers with poor scores.

Try to prequalify and compare offers before you apply. Prequalifying and reading the terms carefully will help you avoid high fees or interest rates. Both of which are extremely common in bad credit loans.

Frequently asked questions

1. Can you make a car payment with a credit card?

Some lenders allow you to make car payments with a credit card, but many do not. You can use a third-party service if your lender doesn’t accept credit cards directly. The service will likely charge a processing fee. Check with your auto lender or dealership first.

2. How much can you put on a credit card when buying a car?

Most dealerships limit how much you can put on a credit card when buying a car. They usually cap it between $2,000 and $5,000 to avoid high processing fees. Rarely will a dealership allow you to charge the full cost of the car. Always call ahead to ask about their policy.

3. Can you buy a used car with a credit card?

Whether you can buy a used car with a credit card depends on the dealership’s policy. Some used car dealers may accept credit cards for full or partial payments. Others limit use to deposits or down payments.

4. Can you buy a car with a credit card to get points?

If you use a rewards credit card to buy a car, you will earn points, miles, or cash back as with any other purchase.

5. Can I get a car loan with credit card debt?

You can get a car loan if you have credit card debt, but it will be harder and not come with the best terms. Lenders give the best loans to borrowers with a low debt-to-income ratio (DTI) and a high credit score. Credit card debt will increase your DTI and hurt your score. You’re better off paying down debt before applying for a loan.

6. Is buying a car a good way to build credit?

It depends on how you pay. Taking out an auto loan and paying it on time can help build credit. Buying a car with cash or a debit card will not impact your score.

Paying for a vehicle with a credit card can hurt your score since your utilization ratio increases substantially. Make all the payments on time, and your score should improve.

Bottom line

While you can purchase a car with a credit card, it is rarely a smart move. Using credit to buy a car will raise your utilization ratio, causing your score to drop. You will accrue interest if you can’t pay the balance in full before the grace period ends. Interest charges could drive up the cost of the vehicle by thousands of dollars.

Now, if you can secure a new card with a 0% APR and a lucrative welcome bonus, it may be worth it. But, only if you can afford to pay off your balance before the promotional period ends. Pay off the balance before accruing interest; your car could help you earn some nice rewards.

1. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank. Expedited disbursement of your Paycheck Advance is an optional feature that is subject to an Instant Access Fee and may not be available to all users. Expedited disbursements may take up to an hour. For more information, please refer to Paycheck Advance Terms and Conditions.

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3. Current is a financial technology company, not an FDIC-insured bank. FDIC insurance up to $250,000 only covers the failure of an FDIC-insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply. Banking services provided by Choice Financial Group, Member FDIC, and/or Cross River Bank, Member FDIC. The Current Visa® Debit Card, which may be issued by Choice Financial Group and/or Cross River Bank, and the Current Visa® secured charge card, which is issued by Cross River Bank, are all issued pursuant to licenses from Visa U.S.A. Inc. and may be used everywhere Visa debit or credit cards are accepted. A Current debit account is required to apply for the Current Visa® secured charge card. Independent approval required.

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6. The Current Visa® Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Current Visa® secured charge card is issued by Cross River Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank. Current Individual Account required to apply for the Current Visa® secured charge card. Independent approval required.

7. Individual results may vary. Using your credit card responsibly may allow you to improve your credit score. Credit building depends on various factors, including your payment history, credit utilization, length of credit history, and other financial activities.

8. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

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12. Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.

13. Boost Bonuses are credited to your Savings Pods within 48 hours of enabling the Boost feature and on a daily basis thereafter, provided that the Savings Pod has accrued a Boost Bonus of at least $0.01. No minimum balance required. The Boost rate on Savings Pods is variable and may change at any time. The disclosed rate is effective as of August 1, 2023. Must have $0.01 in Savings Pods to earn a Boost rate of either 0.25% or 4.00% annually on the portion of balances up to $2000 per Savings Pod, up to $6000 total. The remaining balance earns 0.00%. To earn a Boost rate of 4.00%, the sum of your Eligible Payroll Deposits over a rolling 35-day period must be $500 or more, with at least one Eligible Payroll Deposit equalling a minimum of $200. For more information, please refer to Current Boost Terms and Conditions.

14. Your money is FDIC-insured on a pass-through basis up to $250,000 at each of our partner banks, Choice Financial Group and Cross River Bank, members FDIC.

15. Average value based on Fine Hotels + Resorts bookings in 2023 for stays of two nights. Benefits include daily breakfast for two, room upgrade upon arrival when available, $100 amenity, guaranteed 4PM late checkout, and noon check-in when available. Certain room categories not eligible for upgrade. $100 amenity varies by property. Actual value will vary based on property, room rate, upgrade availability, and use of benefits.

16. Up to $500 per Covered Trip that is delayed for more than 6 hours; and 2 claims per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

17. The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

18. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

19. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

20. Coverage for a Stolen or damaged Eligible Cellular Wireless Telephone is subject to the terms, conditions, exclusions, and limits of liability of this benefit. The maximum liability is $800, per claim, per Eligible Card Account. Each claim is subject to a $50 deductible. Coverage is limited to two (2) claims per Eligible Card Account per 12 month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

21. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

22. Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited to up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

23. Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

24. The secured Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.

25. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

26. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

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28. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

29. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

30. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

31. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

32. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

33. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.

34. Tipping or not tipping has no impact on your eligibility for SpotMe®.

35. Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

36. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

37. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

38. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

39. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.

40. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.

41. Not affiliated with Empower Annuity Insurance Company of America (www.empower.com). Not everyone will qualify. Offers range from $10-$300 for first-time customers; $10-$400 for all others. Offers are based on our eligibility requirements and can go up with on-time payments. In Feb 2025, the average offer was $95 for first-time customers; $187 for all others. Instant delivery is optional—see fees in Empower’s Terms. Empower offers a 14-day trial for first-time customers followed by an auto-recurring $8/month subscription fee. Cancel anytime.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor's credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor's degree in journalism and an MBA.

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Can You Buy a Car With a Credit Card?

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Can I buy a car with a credit card?