Buying a car is always the biggest financial decision for most people. In the U.S., many people wonder whether they can use a credit card for such a large purchase or not. If you are also one of those and are wondering about the best credit card to buy a car, you are at the right place. Additionally, people go for auto loans and personal loans to buy a car, but using a credit card can sometimes be beneficial, especially for obtaining rewards, taking advantage of 0% APR offers, or gaining purchase protection.
In this comprehensive article, we will explore everything you need to know about the best credit cards, their potential benefits and risks, and detailed reviews of the best credit cards in the U.S., suitable for large purchases. Therefore, stay with us to know more.
Can You Buy a Car With a Credit Card?
Buying a car by using a credit card is possible. However, there are important caveats:
- Purchase Limits: Remember, several dealerships only allow partial payment with a credit card, so you may need various payment methods for full payment.
- Processing Fee: Some dealerships may charge you a fee (usually 2% to 3%) for credit card transactions.
- Credit Score Impact: Buying a car with a credit card can increase your utilization ratio and temporarily lower your credit score.
Note—Before using your credit card to buy a car, first confirm the card policies with the dealership to avoid any problems.
You can use the best credit card to buy a car, but it may come with a limit that you need to check before making any purchase.
Benefits of Using a Credit Card for a Car Purchase
Using a credit card for a car purchase offers several benefits that we have mentioned below for you. Have a look at it:
- Offer to Earn Rewards and Cashbacks—Some premium credit cards offer individuals points, cashback, or miles for large purchases. Apart from that, you can get significant rewards for using a credit card to buy a car.
- 0% APR Opportunities—Some credit cards have an introductory 0% APR offer for 12 to 18 months. This allows you to spread payments without incurring interest.
- Purchase Protection—Credit cards often include extended warranties, fraud protection, or purchase protection. All these offers give an individual peace of mind.
- Convenience—Using the best credit card to buy a car can be faster and simpler compared to arranging an auto loan.
These are some of the benefits of using a credit card to buy a car.
Risk of Buying a Car with a Credit Card
Buying a car using a credit card comes with some risks that we have listed below for you. Have a look at it to understand these risks:
- High Interest Rates—If you fail to pay off the balance quickly, credit cards can have interest rates exceeding 20%, which makes the purchase more expensive.
- Credit Utilization Spike—Remember, using a large portion of your credit utilization can affect your credit score negatively temporarily.
- Limited Acceptance—There are a few dealerships that accept credit cards for full payment.
- Processing Fees—Fees can be reduced or deducted from any rewards earned from the purchase.
Note: Use a credit card only when you have a high-limit card.
Top Credit Cards for Buying a Car in the U.S.
Below, we have mentioned some of the best credit cards to buy a car, including their key features, advantages, and disadvantages:
- Chase Sapphire Preferred Card
- Features:
- The card offers 60,000 bonus points after spending $4000 in the first three months.
- Offer 2x points on travel and dining.
- Offer 1x points on all other purchases.
- Comes with an annual fee of $95.
- Pros
- Provide high rewards on common spending categories.
- Offer flexible points redemption.
- Comes with a strong reputation and customer service.
- Cons
- It has limited rewards for non-travel/dining purchases.
- Comes with a heavy annual fee of $95.
- The May card may not have enough credit limit for very expensive cars.
- Best For
- Individuals who are looking to earn valuable travel points while paying for a vehicle.
- Chase Sapphire Reserve
- Features:
- Offer 3x points on travel and dining.
- Offer 1x point on all other purchases.
- The card provides a $300 annual travel credit.
- Provide Priority Pass lounge access.
- Comes with an annual fee of $550.
- Pros
- Offer high credit limits for approved users.
- Comes with excellent perks, including travel benefits.
- The points are worth 1.5x when redeemed for travel through Chase Unlimited Rewards.
- Cons
- Comes with a very high annual cost ($550).
- The points redemption value is mostly for travel, not cash.
- Best For
- This card is best for frequent travelers who can take advantage of premium perks while making large purchases.
- American Express Platinum Card
- Features
- Offer 5x points on flights and hotels booked directly with airlines or Amex Travel.
- Provide premium travel benefits, including lounge access and concierge service.
- Comes with purchase protection and extended warranties on eligible items.
- Have an annual fee of $695.
- Pros
- Offer heavy credit for premium users.
- The card has extensive travel perks.
- Offer purchase protection, which is valuable for large purchases like cars.
- Cons
- The card has a high annual fee ($695).
- The rewards rate is low on everyday purchases.
- It may have limited acceptance compared to Visa or Mastercard.
- Bes For
- High-income users who are looking for premium perks and are willing to pay a large annual fee.
- Citi Double Cash Card
- Features
- Offer 2% cash back on all purchases.
- It has no annual fee.
- The introductory APR offers may be available from time to time.
- Pros
- The card features a straightforward and effective cash-back structure.
- No annual fee makes it ideal for individuals.
- The cashback applies to large purchases like vehicles.
- Cons
- The card has limited additional perks, like purchase protection, compared to premium cards.
- Offer no bonus categories or signup bonuses.
- Best For
- The card is ideal for users who want straightforward cashback without worrying about annual fees.
- Capital One Venture Rewards Credit Card
- Features
- The card offers 2x miles on all purchases.
- Provide 5x miles on hotel and rental car bookings through Capital One Travel.
- Comes with a $95 annual fee.
- Offer flexible mile redemption for travel purchases.
- Pros
- Offer high flat-rate rewards on all purchases.
- Offer easy-to-redeem miles, including for travel expenses related to car trips.
- Provide purchase protection.
- Cons
- It has an annual fee of $95.
- Offer no extra rewards for general merchandise like cars, outside of points accumulation.
- Best For
- Ideal for users who prefer flat-rate travel rewards on all spending while buying a vehicle.
- Chase Freedom Unlimited
- Features
- Offer 1.5% cash back on all purchases.
- Offer 5% cash back on travel purchased through Chase Unlimited Rewards.
- Introductory 0% APR on purchases for 15 months.
- Comes with no annual fee.
- Pros
- It has no annual fee.
- Introductory 0% APR can be used for financing a vehicle interest-free.
- Comes with a simple cash-back structure.
- Cons
- The card may not have enough credit limit to buy an expensive car.
- Offer lower rewards points compared to premium cards for large purchases.
- Best For
- The card is ideal for users who are looking for a low-risk, flexible credit card with 0% APR with no annual fee.
- Discover It Cash Back
- Features
- Offer 5x cash back in rotating categories each quarter.
- Provide 1x cash back on all other purchases.
- Cash back match at the end of the first year.
- Comes with no annual fee.
- Pros
- Cash back match can double your earnings in the first year.
- Comes with no annual fee.
- Offer purchase protection.
- Cons
- The card may offer a lower credit limit compared to premium cards.
- Best For
- Users who are willing to plan purchases around rotating cash back categories and want a first-year bonus.
These are some of the best credit card to buy a car.
How to Choose the Best Credit Card to Buy a Car
To get the best deal, there are some points that you need to consider. We have listed it below; have a look at it:
- High Credit Limit—While choosing your credit card, remember that the card you are choosing is able to cover the card cost or a significant portion of it.
- 0% Introductory APR—Go for the cards that offer 0% APR for new purchases, allowing interest-free payment over time.
- Rewards and Cashback—Choose a card that offers bonus points or cash back for large purchases.
- Fees—Do not choose a credit card with a heavy annual fee, because it will outweigh the rewards benefits.
These are some of the points that you need to check before choosing the best credit card to buy a car with.
Tips for Using the Best Credit Card to Buy a Car
- Confirm Dealership Acceptance—Before making any purchase, check with the dealership if they allow full or partial payment by credit card.
- Plan for Fees—Remember, there are some dealerships that charge 2 to 3% for credit card transactions.
- Use Cards With High Limits—Always avoid maxing out your credit card.
- Pay off Promptly—To avoid high-interest charges if your card doesn’t have 0% APR.
These are some of the tips to use your credit card.
Conclusion
Purchasing a car with the help of your credit card can be an ideal choice if you have a high-limit premium credit card. The best credit card to buy a car offers you rewards, purchase protection, earnings, and much more. Apart from this, you can also go for the auto loans, or dealer financing is also a safer choice to buy a car. However, if you have a high-limit credit card, you enjoy extra perks.
Moreover, it is important to check the credit card to get the best deal for you. Choose cards that align with your habits and offer you high limits for large purchases like cars.
Discalimer
The information provided on this website is for general guidance on credit cards, loans, and insurance products. We do not provide financial, legal, or professional advice. Product features, eligibility, and terms may change anytime, so users should verify details directly with the provider before applying. We may earn commissions through affiliate links, but this does not influence our reviews or recommendations. Users are responsible for their own financial decisions based on their personal situation.
Hi, my name is Sachin. I am currently studying Economics in college and have a strong interest in personal finance topics like credit cards and loans. Along with my studies, I work as a content writer, where I create educational and easy-to-understand content to help readers better understand financial topics and make informed choices.
