Buying car insurance on credit card

jpaul1

Hi,

My car insurance is due over Christmas and I was thinking of purchasing it on my credit card.

My question is, I have heard in the past that there are certain things you shouldn't on your credit card such as use it cash out money etc.

Does anyone know of a reason why credit cards shouldn't be used to buy car insurance? Does it look bad to creditors or on my credit file?

I plan to pay off the credit card at the end of the month so to not incur interest on it. Also the purchase will be way within my credit limit.

Thanks

[Deleted User]

Assuming they don't charge you a fee for doing so, then it's fine.

PeacefulWaters

Many insurers will charge a fee of c2% for putting it on your credit card. This can be offset partially by any points or cashback some credit cards pay.

But it won't report negatively on your credit file. It won't get treated as a cash advance.

pvt

jpaul1 wrote: »

Does it look bad to creditors or on my credit file?

The only thing your CRA information shows is what your balance is, and what you pay each month. It does not provide any detail about individual CC transactions or who the payees are or what the payment was for.

TartanSaver

I paid mine with it. It will also give you s75 protection. It's FAR cheaper than "paying monthly" and would be even if you took several months to clear the cc.

shopaholicz

I paid my car insurance last year using my credit card. No problem.

Vortigern

Be aware that if you pay by CC this year, they will automatically renew using the same card next year, unless you explicitly tell them not to.

YorkshireBoy

jpaul1 wrote: »

Does anyone know of a reason why credit cards shouldn't be used to buy car insurance?

Not so much a reason not to do it, but more a warning...

Be mindful of auto renewal next year (via CPA). They'll use the card details they have on file and you may not have that credit card this time next year!

So when you get the renewal, don't throw it in the bin (in sheer disgust at the increase in premium!) without reading it thoroughly. You're looking for the message..."You don't need to do anything if nothing has changed. Your payment will be collected from your card ending xxxx".

Of course you can request they don't store your card details (as I do), but that's not to say you shouldn't still check the letter.

Aquamania

jpaul1 wrote: »

Hi,

My car insurance is due over Christmas and I was thinking of purchasing it on my credit card.

My question is, I have heard in the past that there are certain things you shouldn't on your credit card such as use it cash out money etc.

Does anyone know of a reason why credit cards shouldn't be used to buy car insurance? Does it look bad to creditors or on my credit file?

I plan to pay off the credit card at the end of the month so to not incur interest on it. Also the purchase will be way within my credit limit.

Thanks

To summarize the responses:

1. Check out if the insurer will charge an additional fee for paying by credit card
2. Be mindful of a possible CPA (Continous Payment Authority)
3. It won't affect your credit files - your credit files do not contain details of individual transactions.

Aquamania

TartanSaver wrote: »

I paid mine with it. It will also give you s75 protection. ...

:huh:

When was the last time you heard of an authorised motor insurance company going bust/unable to meet it's liabilities? :cool:

Even if one were to do so, the Financial Services Compensation Scheme (FSCS) will cover you for 100% of complulsory cover

(For non-compulsory cover, it's 100% of initial £2000 and 90% of cover after that)