Quick Answer
Can you payoff a car loan with a credit card? Yes, you can pay off a car loan with a credit card, but it is not generally recommended.
If you are under financial strain, you might be looking for unique ways to meet your minimum payment obligations. Whether you are looking for ways to reduce how much interest you are paying or are simply looking for a way to ensure that you make payments on time, you might be tempted to use a credit card. Though most people know that buying a car on a credit card wouldn’t be a savvy financial decision, the idea of using a credit card to make payments is a bit of a grey area.
At Autorama, we are the used car dealership Toronto residents turn to when looking for high-quality used cars at prices that work for their budget. We are often asked; can you pay off a car loan with a credit card? Though the answer is yes, there are several factors you’ll want to consider before making car loan payments with your credit card. In this post, we explore your options when it comes to financing and payments and help you make an empowered car-buying choice.
Why Is Using a Credit Card for Car Loan Payments Not Recommended?
Using your credit card to make auto loan payments is possible when your lender allows it. However, it is generally not recommended to do so. The primary reason why it is not recommended to use your credit card to pay your monthly car payment or to pay off a car loan is that in most cases, credit cards are high-interest.If you do not make your credit card payments on time, this can result in paying interest on your auto loan as well as the high-interest charges on your credit card. Even in a pinch, putting a car loan payment on a credit card can be risky. If you are finding it difficult to make your auto loan payments on time and are worried about a missed payment, looking into other options, such as debt consolidation or refinancing, may be a better choice. For more information, see our post, Is Debt Consolidation an Option for Car Loans?
Does Using a Credit Card to Make Auto Loan Payments Ever Make Sense?
Though using a credit card to pay off your car loan is generally not recommended, there are some instances where doing so might make sense for your household. If you can make your payments on time every month and avoid paying interest on your credit card, you might want to take advantage of rewards and points or even 0% promotional credit card offerings. Keep in mind that many households find it difficult to pay the balance of their credit card monthly. If you cannot do this, using your credit card to pay your car loan can end up being costly.
If you are worried about making your auto loan payments and need help navigating the process, contact the experts at Autorama. We would be pleased to help you discover a solution that helps you drive the car you need without busting your budget. See our post, Here’s What Happens When a Car Loan Goes Unpaid, for more information on the consequence of missing an auto loan payment.
