How To Use Credit Card for Down Payment on Car
Basic information related to Credit Card for Down Payment on Car
People find it convenient to make down payment using your credit card as a source. But you have to know that it is not a wise decision to make because you might have to pay the balance off quickly.
You have to make the payment right after using the credit card. There are some dealers who will limit the amount you can take out from your credit card. So you have to ask first before you whip out the plastic.
Benefits of Using a Card
There are some credit card companies which give their people some special perks which include that you can pay your balance off very past using your card. You can earn some amazing bonuses or cash back rewards by your credit card company.
The key is in making sure the balance is indeed paid off quickly. There are auto interest rates that are lower as compared to other credit card rates in other companies. According to Bankrate, the average credit card interest rate as of this publication was 13 to 16 percent, while the typical auto loan was 4.3 to 5.2 percent.
Contact your credit card company
Make a call to your credit card company and ask them about the credit line to cover the down payment. If you don’t ask for an extension of your credit line to cover that amount. Also, make sure you check that you don’t have a low introductory interest rate that’s about to reach the date of expiry.
If you make a purchase before checking the change in the interest rate can cost you quite expensive. Make sure you update your dealer that you’re planning to use your credit card for the down payment. With that, you have to double-check the max amount it will let you charge.
Car dealers usually limit the amount you to use your card because they have to pay a finance fee by the card user. There are some issues for you as well if you use the credit card for the payment. You have to pay high-interest rate if you pay through the card and you don’t pay off the balance quickly.