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Should I use a credit card to pay off a car loan?
I'm wondering if I can save money by moving my car loan debt to my credit card.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Typically, this isn’t a great idea, but there are certain scenarios where paying off a
car loan
with a credit card may benefit you financially. Some credit cards offer promotional or introductory periods that provide 0% APR for nine, 12, or 15 months. So if you have a car loan with a higher interest rate than zero (which is likely), a credit card may save you money.
This only works in your favor if you think you can pay off that credit card before the 0% APR period ends. Credit card interest rates are often much higher than rates on car loans, often in the double digits. You’ll likely pay more in interest on a credit card than on your auto loan if you don’t pay off the loan before the 0% interest time frame ends.
If you’re looking at using a credit card to pay off your loan because your car loan rates are too high, consider refinancing your loan to help you save some money. It’s possible your financial situation has changed since you initially applied for your loan and you may qualify for better rates now.
There are other ways to save money on your car. It never hurts to evaluate your car insurance policy to see if you’re paying too much.
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