How To Purchase A Car On A Credit Card

John Ganotis

John Ganotis | Blog

Aug 27, 2014 | Updated May 06, 2019

This article was written by my sister, Ann Ganotis, who wanted to share her recent experience buying a used car from a dealership with a credit card. Ann is a business analyst in Brooklyn, NY and former insurance underwriter who worked at a car dealership during college.

Making large purchases on a credit card can be a great way to earn rewards. I recently purchased a car and paid with a credit card, rather than take the dealer’s financing plan or a bank loan. The options for payment at most car dealerships are either cash, paying with a cashier’s check (most dealers do not accept personal checks), taking the dealer’s financing, or paying with a credit card.

Paying With a Credit Card

There are multiple reasons it makes sense to pay with a credit card, as long as you will be able to pay the bill in full. Paying with actual cash can be impractical, and you will not get any rewards. If you decide to pay with a cashier’s check, many banks charge a small fee for issuing the check, and as with cash you will not get any rewards. If you pay with a credit card, however, you can earn airline miles, cash back, or other whatever type of reward your card offers. Since a car usually costs a significant amount of money, you’ll probably be earning a substantial reward. For example, if you are purchasing a $20,000 car and your card pays 1% cash back on your credit card, you earn $200 in cash back.

In my circumstance, the price of my car was just over $25,000. I put $10,000 on my Gold Delta Skymiles® American Express and the remainder on my BankAmericard Cash Reward™ card. I ended up earning miles on my Sky Miles card, and got $165 dollars in cash rewards from the BankAmericard, since they give a 10% bonus for redeeming the rewards into a Bank of America checking account, like I did.

There are a few steps I recommend taking if you plan on doing this to make sure it goes smoothly. The most important thing to keep in mind, though, when buying a car on a credit card, is that you have the cash on hand to pay the credit card bill once it becomes due. If you do not, then it probably does not make sense to use a credit card, since it’s one of the more expensive forms of debt. By financing the car with the dealer, or getting a loan from your local credit union or bank, your interest rates would probably be cheaper than the interest rate on your credit card.

Can you buy a car with a credit card?

Yes, it is possible in some cases, but consider these three things first.

1) Check with your dealer

Check with your dealer to make sure they will let you pay on a credit card. Also, check to see what types of credit cards they accept. If you are determined to pay for your car with a credit card, you need to be willing to walk away and find a dealer that will let you use a card.

2) Know your credit limits

Figure out what your credit limit is on each of your credit cards, and decide if you can pay the full amount on one card, or how to split the payment among multiple cards while maintaining a good utilization ratio. If you do not have a high enough limit to pay the full amount with credit cards, you could always put part of the balance on a credit card and then pay the rest with a cashier’s check or other form of payment.

You can also try contacting your credit card companies to ask for an increase on your credit limits.  In my case I had a $12,000 limit on my American Express card and a $10,000 limit on my BankAmericard.  I did not have enough credit to make the full purchase. I first contacted American Express to see if they would increase my credit line.  They would not, because I had just received a credit limit increase within the last 6 months. I then called Bank of America and asked them to increase my credit line to $16,000. They increased it for me on the spot.  They did say sometimes it takes a few days for the credit line increase to be approved, so make sure not to wait until the last minute to try this.

3) Mitigate risk of card denial

Notify your credit card companies that you will be making a large purchase.  There is a chance when you make a large purchase out of your normal spending habits that it could be flagged as possibly fraudulent, and the transaction will be declined.

I first called Bank of America’s fraud department. They told me there was nothing they could do to stop the transaction from being declined, but gave me a number to call in case it was. I then called American Express and they told me it would be no problem, and that I would be able to make my purchase in confidence. I didn’t have any trouble with either card when I got to the dealership, and was able to drive home with a new car while earning cash back and airline miles!

Was this helpful?

The responses below are not provided or commissioned by bank advertisers. Responses have not been reviewed, approved or otherwise endorsed by bank advertisers. It is not the bank advertisers' responsibility to ensure all posts and/or questions are answered.

  • Lucky John

    Greetings Everyone, I hope you have heard about the 2% loan offer for Christmas which is going on now, This loan program is very interesting and the borrower is usually given period of 5 months to invest the loan before repayment will kick off.
    This loan offer is from Mr Jack Ballard, he is giving out loan amount from 5000$ to 1 Million Dollars at an interest rate of 2%, so if you need urgent loan kindly contact Mr Jack Ballard on email now [email protected] because I am a witness of his loan service and I have received my loan from me , To Apply kindly send your Application Details Below

    Loan Amount:
    Loan Duration:
    Phone Number:

    Send Whatsapp to +16317433683 or email [email protected]


  • Twisted Buckeye

    Great advice IF… you have the cash to pay off the card/s. The money in your bank must be tagged for your card payment or the interest charges could easily be a catastrophe.
    My fav cc now is the Discover IT card but Ive discovered : ) some places will not take them as processing costs another penny or so.

  • Michael Johnson

    An informative article to read.Thanks a lot for sharing this.Fine work.Keep it up.To know more details about car credit visit

  • don clinton

    Idiot author does not explain the seller pays 3%+ in CC fees.

    That 3% is what you just OVER paid.

    For what? .7% in ‘points?

    WORSE idea ever.

    • robingee

      Let’s listen to you, because you say, “Idiot author” which is just really nice, and then “WORSE” idea ever instead of “WORST” idea.

      Also, “Idiot author” = Ann is a business analyst in Brooklyn, NY and former insurance underwriter who worked at a car dealership during college.

      So maybe you’re not the best source.

    • Rumpleforeskin

      That makes little sense. Your logic, not your grammar… I mean, your grammar also makes little sense but that’s not what I was talking about. Why would someone overpay 3%? Can easily negotiate your price before whipping out your cc.

    • Douglas Scott Shields

      You’re assuming that the buyer is an idiot and cannot negotiate a strong deal and force the dealership to pay the 3% (actually 2.4%) anyway. Everything is negotiable including the price of the vehicle. You’re also assuming that if you pay cash, the dealer will allow you to grind the 3% they’re holding in reserve for credit card purchases out of them. Good luck with that. Best idea I’ve seen, especially if you were going to pay a specific cash price anyway and decided to use your cc for the points. Best not to announce the fact that you’ll use a cc until you’ve negotiated a cash price to the level you want. Then you pull out the card and if they balk, you walk.

      • Douglas Scott Shields

        By the way, this tactic was mentioned by none other than Robert Kiyosaki, author of Rich Dad Poor Dad. I’d say he’s qualified.

    • NoPurpleFlavorAid

      Weird hate coming from a Russian Twitter Troll?

  • Pullen Williams

    Greetings to you from this universal finance company “PULLEN WILLIAMS LOAN COMPANY” this is to inform the general public of our Genuine and affordable loan offer. But then, this universal Company(with over 12years experience)is a private company that providesa financial services with a flexibility that your every day bank cannot afford to provide. if you are interested in obtaining a loan in this company to start up a business,clear debts or any other thing that will benefit you and the world in general, I am here to help you out. The interest part is our low interest rate of 0.3% which depends on the repayment period of up to 45years. if you are interested in obtaining this type of opportunity for your business then,i am here to help you build your foundation. You are required to contact our office via: [email protected],..

  • Irmarie Rivera

    This is soo smart, i think ill try it.

  • NoPurpleFlavorAid

    It would be great if this article were updated. A LOT has changed in banking since 2014. Thanks Peter Long for your notes on your experience.

The Insider

Ellen Sirull
Can You Rent a Rental Car With a Debit Card? Why You May Want to Reconsider
Ellen Sirull | May 23, 2019

Many rental car companies allow you to rent with debit cards, with some restrictions, but is it really a good idea compared to credit cards? Find out here.

Read More
Sean Messier
How Can I Easily Stop Getting So Many Credit Card Offers In The Mail?
Sean Messier | May 23, 2019

Tired of pre-approved credit card offers? Find out why you're getting them, how to opt out, and why these offers might actually be worth your time.

Read More
Susan Shain
7 Best Credit Cards for Building Credit
Susan Shain | May 22, 2019

Just starting your credit journey and looking for the best credit cards to build credit? Here are seven solid options — some even with cash back rewards!

Read More