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How do I pay my car loan with a credit card?
I want to hack my credit card score by using my card for my car loan and then immediately paying it off. Is it possible to do this, and will it actually improve your credit?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You can use your credit card to pay your car loan—but it may not be that easy.
Most lenders do not actually allow you to pay your
car loan
with a credit card directly. Even lenders that do allow you to pay by card often employ high transaction fees—3% or higher—which would likely negate the benefit of paying with a credit card.However, you may be able to find a loophole if you look hard enough. If your lender is willing to let you pay off the entire balance of your car loan with a credit card, you could benefit from cards that offer a 0% introductory APR.
Keep in mind: You should still determine how much a balance transfer would be or how much the lender might charge you for a credit card transaction. You’ll also need to consider the potential of
prepayment penalties
that some lenders may charge.Pro tip: If you’re simply looking for ways to pay off your loan faster, try making principal-only payments, lump-sum payments, or double up on your payment amounts each month.
View full answer
- Gregory R.
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