Credit cards normally have higher interest rates than car loans, so pay off the credit card first. Never miss a payment on the car, though.
Like we said, the simple answer is yes, it's possible to use a credit card for your monthly car payment, but not really advisable. Say you put $1,000 down on a $13,000 car and you're looking at monthly payments of $350 over three years to pay off the $12,000 balance.
As people have already answered, No. credit cards are unsecured loans and almost always have higher interest rates than an auto loan which is considered secured. Also, it can lower your credit score by increasing your overall credit utilization.
What is autopay? Automatic payments or “autopay” is a feature offered by most credit card issuers that allows you to have your balance or minimum payment automatically paid from a bank account when your statement is posted. You can set up autopay with your credit card issuer over the phone or online.
Paying bills with a credit card might help your credit score if: It helps you pay on time. If you struggle to remember payment due dates, setting up automatic payments with a credit card can help prevent missed payments without worrying about insufficient funds in your checking account.
Automatic payments could help your credit score, but only if you time the payment to happen before the credit card's statement due date and around the same time you know there will be enough money into your bank account.
Many card issuers allow you to transfer personal loans, as well as auto, home equity loans and student loan debt, too. Doing so could help you save thousands of dollars in interest.
When you use an auto loan to buy a car, your credit score will likely take a slight hit due to the increase in your debt load and the hard inquiry that results when the lender checks your credit. Thankfully, the credit score should only dip a few points temporarily.
Depending on the type of bill and the merchant, you may be able to use a credit card to pay bills. Mortgages, rent and car loans typically can't be paid with a credit card. If you pay some bills, like utility bills, with a credit card, you may need to pay a convenience fee.
Depending on your lender, you may be able to make a car payment with a credit card. But not only is this uncommon, due to the fees that it would place on the lender, there are also other reasons to think twice before you go this route if it's available.
Landlords who do accept direct credit card payments have to pay merchant processing fees for the privilege, and it's common for them to pass those fees on to the renters on top of rent. The convenience fee for paying rent with a card typically ranges from 2.5% to 2.9%, which may sound small, but it adds up.
Although it's not common, some lenders may let you make car payments with a credit card, but it could be a costly move that may damage your credit score. If you use a 0% intro APR credit card, you could pay off your car loan with no interest, but watch out for high fees, and make sure not to fall behind on payments.
Higher interest rates
Unless you're able to pay off the transaction for your new car within a month or two, (or longer if you're using a credit card with a generous 0% intro APR offer), it's not worth it.
An auto loan is a type of installment loan, like most student loans, mortgage loans, and personal loans. As long as you make the monthly payment by the due date every month, a car loan should help your credit score over time.
To keep a healthy credit score, it's best to use less than 30% of the total available credit line on your cards. Putting a big chunk of debt such as a car loan on a credit card can increase your credit utilization ratio, which can shave points off your score.
Making on-time payments to creditors, keeping your credit utilization low, having a long credit history, maintaining a good mix of credit types, and occasionally applying for new credit lines are the factors that can get you into the 800 credit score club.
A 700 credit score is considered a good score on the most common credit score range, which runs from 300 to 850. How does your score compare with others? You're within the good credit score range, which runs from 690 to 719.
If your lender allows it and you are given enough of a credit limit, you may be able to pay a portion of your entire balance of your home, car or student loans with a credit card.
A car dealership may allow you to use your credit card for a portion of your car purchase. However, you probably won't be able to buy a car outright with a credit card. The reason why is because the car dealer pays a credit card processing fee whenever they accept a credit card payment.
A balance transfer lets you transfer debt to a credit card. It may help you consolidate debt, simplify payments and potentially pay less interest. In addition to credit card balances, some lenders might let you transfer debt from personal, student and car loans.
Utilities and Other Variable Expenses
Therefore, it's generally safer not to set utility bills on autopilot. “Bills that fluctuate aren't good fits for autopay, such as your electric or water bill,” said Bethany Hickey, banking and lending expert at Finder.
A general rule of thumb is to keep your credit utilization ratio below 30%. And if you really want to be an overachiever, aim for 10%. According to Experian, people who keep their credit utilization under 10% for each of their cards also tend to have exceptional credit scores (a FICO® Score☉ of 800 or higher).
Missing a debt payment by just one day won't hurt your credit scores. Late payments typically don't appear on credit reports (and therefore hurt your credit) until they're past-due by 30 days or more. However, you may face fees and other penalties.