Just as the title implies. I get 1% cash back on my CC and was wanting to pay for my car with it. Is that possible? My credit isn't enough on 1 card, so I would have to spread it over 2 cards. Do you think the dealer would have any problems w/ this? It's my understanding that the merchant gets charged a flat rate for each transaction, and not by the amount of the purchase. Is this right?

I know it's only 1%, but in a $37K car, that's $370 that I can use to customize.

 

What is the interest rate on your cards?

 

Are you going to pay the cards off right away??
If you cant then IMHO its a not a wize choice.


If you went and offered the dealership cash I bet they would give you 1% back if you told them you would use the CC instead..

 

never seen ppl using creditcard to buy a car...-_-
just me...everyone that i know of...they use checks...

 

If you don't have the cash to pay the cards off immediately, then you are basically signing your own death warrant.

 

i agree!!

 

If you pay it off immediately, then go for it. If you don't then you just bought a car with 18+% interest rate. Not smart.

 

Now, If I have 37K sitting in the bank? would I care to save 370 on award points? , unless he is getting low low interest rate? say 18 months with no interest and prime plus zero for the life of the blances after that, than he is ok, than again, if he has such high credit limit, he must have great credit, he can surely get an even lower rate with any bank.

 

...may I also add that you shouldn't do this even if you're rich because:

1.) If you have cash enough to pay this off immediately, then you will save over $370 in financing charges alone.

2.) Your credit card company can change your interest rate at any time to anything they want (read your agreement) and can really screw you over even if you had enough cash to cover.

3.) NEVER pay for stuff up front that you can pay for over a longer period of time. Just do a basic time value of a dollar calculation and you'll see that if you pay for this car immediately, then you will have 37k less to invest. Trust me, you'll lose more than $370 in potential investments.

4.) Life happens. What happens when you put the car on plastic then, god forbid, tragedy strikes and you have medical bills to pay or something? Again, debtor's prison for you.

5.) Most importantly, 1% is crap. If it were a 15% or something then go ahead, but you'll never get that from something like a credit card. I think the historical SP500 return is like 12% or something like that. If you can't beat 12%, then just invest in the market!!!

Plastic isn't necessarily evil, but if you use it for anything other than a monthly convenience that you up a certain creek without a paddle. I would say do not do this under any circumstances. Your best bet is to get a 60 month loan and take the money you would have spent up front and invest it. Smart money!

 

I can't speak for where you live but many areas have laws prohibiting putting one purchase on more than one card. I think this is meant to keep us from being browbeaten into buying something that is out of our range.

ie. If you need to load up 2 cards you probably can't afford it.

 

I actually wondered the same thing. But i was looking more for putting the down payment on my card. I figure that I have the couple thousand dollars cash that i would be normally writing a check for. Why not put it on my Amex, get the miles, and write the check to Amex? I just doubt that the dealer will go for it.

 

You can only put $2000 of that new car onto a credit card. If you want to use your credit for the rest, then you'll have to finance. Don't ask me why... I tried the last time I bought a new car and that's what I was told by everyone I talked to... the car was 18,500 otd, and my credit card limit was well beyond that...

 

Also, something else to think about, some merchants charge up to a 3% "Convenience Charge" the merchants get charged a fee by the CC processor and sometimes pass it on to the customer. I'm sure the laws are different for each state though. But +1 on “the don't do it if you can’t pay it off quick thing” that revolving interest is a bi+ch!

 

Wow, didn't get think I would get this kind of response. I guess I should have been more clear.

I signed up for a credit card that has 0% interest for 15 months. I have my cash in an Emigrant Direct account collecting 4% interest (fantastic online bank, I might add). So my plan was to hold onto my cash collecting 4% interest, then pay it all off before the 15 mos. 0% financing was done.

Yeah, it's a mere few hundred dollars, but then again, I wouldn't have enough money to pay cash for my car if I had spent frivolously.

Just trying to stick it to the man as much as I could.

 

I still wouldn't do it. That 0% intro APR can be yanked from you as well (again, read all that tiny writing on your agreement), and more importantly - never pay for low interest stuff up front if you don't have to. Invest it, you can cover what you pay out on interest and get a return with low risk investments. High interest stuff like credit cards, yeah, pay that off ASAP, but the rule of thumb is to keep your money in your pocket for as long as you can so you can make it work for you. If you pay for a big ticket item all at once then it is the other party that has that large sum to invest. In short I would say that putting a big ticket item on plastic is a very bad idea. Good luck with whatever you do!