Can You Make a Car Payment With a Credit Card?

In a crunch, you may look to your credit card to make your monthly car payment. Or, you may think of charging your car payment to earn some extra credit card rewards. There are a few options for paying your car note with your credit card, but the process isn't as simple as regular everyday purchases. Before you try to make your car payment with your credit card, there are some caveats to consider.

Can You Pay a Car Payment With a Credit Card?

Most lenders don't accept credit cards for car payments. The rare lenders that do take credit cards may charge a fee for the transaction, increasing the overall cost of your loan payment. If you were hoping to earn credit card rewards on your car payment, the additional fee may offset the benefits of the rewards.

There are other ways to effectively make an auto loan payment with a credit card, but they come with costs of their own. Understanding the options can help you decide whether putting your car payment on your credit card is worth it.

Paying With a Convenience Check or Cash Advance

While you likely won't be able to use your credit card to make a car payment as a regular transaction, you may be able to use a convenience check or cash advance to make the payment.

If you opt to use a convenience check, you can write it to yourself and deposit it into your bank account, then make your car payment as normal. Or you can make the check out to your lender and mail the payment.

To make your car payment with a cash advance, you'd need to perform a cash advance at an ATM. Then, you could deposit the cash into your bank account and make your payment normally. Or, you could purchase a money order and mail it to your lender.

Read your credit card's terms for cash advances. Whether processed with a convenience check or via ATM, most incur a cash advance fee based on the amount of your advance. The transaction may also be charged a higher interest rate than other transactions. And you won't get a grace period, so interest begins accruing immediately.

Paying With Plastiq

Plastiq is a payment platform that lets you pay almost any merchant with a credit card—for a fee. Once you sign up, you can add your credit card to your account, then set up a payment to your auto lender, even if your lender isn't signed up to receive payments through Plastiq.  Choose the date you'd like to pay and how you'd like to pay: check, bill pay transfer, ACH transfer, or wire transfer. 

Fees vary depending on your payment method. For example, payments made via check and regular ACH transfers are charged 2.85%. By comparison, the fee for an expedited ACH transfer (two business days vs. three) increases to 3.35% and $15.

In addition to the fees charged by Plastiq, you may also be charged fees related to the cash advance, depending on how your credit card issuer treats the transaction.

Using a Payment Service for Bill Pay

If your auto lender accepts payments through a payment platform like PayPal, you can set your credit card as the funding source to complete the transaction. With PayPal, using a credit card to make a commercial transaction costs nothing extra to you. 

Another option is to make your payment using Cash App, which is a bit more versatile than PayPal, but more costly. The app allows you to pay bills using the routing and checking number associated with your Cash App account, which means your lender doesn't have to have a relationship with Cash App. However, you may be charged a 3% fee for payments using a linked credit card, so paying this way may only make sense if you’re in a financial bind for a short time.

Some lenders accept payment through MoneyGram or a wire transfer. You'll pay a fee for the transfer—as high as $60 for an in-person credit card transaction through Western Union on a payment of $550, for example.

Using a Balance Transfer

With a high enough credit limit, transferring your auto loan to your credit card is an option. You'll pay a balance transfer fee—either a percentage of the transfer (generally 3%) or a flat fee—but if you can take advantage of a 0% promotional offer, you can avoid paying interest on the balance. Of course, that means you'll have to pay off the balance by the time the promotional APR expires to take full advantage of the offer. 

While transferring your balance to a credit card could save you money on long-term interest costs, it may not necessarily solve a cash crunch, particularly if you have to increase your payment to pay off the balance before the promotional period ends.

Should You Make Car Payments With a Credit Card?

Making your car payment with your credit card may help bridge a gap in your income for a few months, but it's generally not a good long-term solution. Since most auto lenders don't directly accept credit card payments, you'll have to pay a fee with most of the alternatives. You might even find yourself paying a fee to the service provider and your credit card issuer.

The Bottom Line

Using your credit card to make your car payment may benefit you if you can use a no-interest balance transfer to save on interest. Otherwise, there's almost no upside to using a credit card for your car payment. If you can't afford your car payment, contact your lender to learn about your options.

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