Can i use a spending credit card to pay off a car loan?

GoldenOldy

Good evening

I have just read the article about spending credit cards and balance transfer cards.
I wondered if someone could explain to me the following please.
I wish to make the end payment on my car which i had intended just putting on my credit card then paying off.
I still wonder though if i could use a 0 per cent spending credit card in order to do so?
could anyone advise please.?
Thankyou kindly

grumpy_codger

You can IF your loan provider accepts CC payments AND processes them as purchases, not as cash-like transactions. Most likely it's NO on both counts.

GoldenOldy said:

...
I have just read the article about spending credit cards and balance transfer cards....

Have you read on Money transfer credit cards ? Unfortunately, very few are available, the fee is about 4% and 0% term is shorter than for many 0% BT and spending cards.

etienneg

No. You cannot use a credit card to pay off existing debt (except, where available, balance transfer from another credit card). So you will have to make your final car payment in another way.

MyRealNameToo

GoldenOldy said:

Good evening

I have just read the article about spending credit cards and balance transfer cards.
I wondered if someone could explain to me the following please.
I wish to make the end payment on my car which i had intended just putting on my credit card then paying off.
I still wonder though if i could use a 0 per cent spending credit card in order to do so?
could anyone advise please.?
Thankyou kindly

Most lenders dont accept payment by CC, so its likely a non-starter

If the lender does then most credit cards would count it as a cash advance meaning at a minimum it isnt a purchase so no 0% and interest starts immediately. Some will also add a cash advance fee. 

So if your lender accepts it then it's high risk to do it. Alternatives would be to do it anyway and in the likely scenario that you start paying interest instantly then you Balance Transfer it to another card and just pay a few days interest plus any BT fees. Alternatively you do the recommendation above and get a MT card and pay it off with the cash you remove from the CC under a MT offer. 

GoldenOldy

Okay, good news! I have checked and i can use my credit card online to make the payment. So giessing if i apply for another one with a larger balance so i can pay the whole lot off at 0 per cent this should work.

eskbanker

GoldenOldy said:

Okay, good news! I have checked and i can use my credit card online to make the payment. So giessing if i apply for another one with a larger balance so i can pay the whole lot off at 0 per cent this should work.

You can't apply for a specific size of balance, you apply for a card and get whatever credit limit you're given - whether it's enough for what you have in mind is solely down to luck, or rather the card company's assessment of your creditworthiness, affordability, etc....

molerat

Bear in mind the possible cash transaction fee and the interest from day 1 until you transfer it.

CliveOfIndia

GoldenOldy said:

Okay, good news! I have checked and i can use my credit card online to make the payment. So giessing if i apply for another one with a larger balance so i can pay the whole lot off at 0 per cent this should work.

Are you intending to use your "ordinary" credit card to pay off the loan, then do a BT to a different card to take advantage of a 0% offer?  If so, this would work, with a couple of caveats.

(1) Get your 0% BT card in place first, and make sure you're given a sufficiently high credit limit.  Remember that most cards only allow you to transfer up to 90% or 95% of your available limit.

(2) Be prepared for your existing credit card to treat it as a "cash-like transaction".  You'll almost certainly be charged a cash advance fee (check your T&Cs to see how much this will be, it's typically something like 3%).  And you'll be charged a few days interest, from the time you make the transaction until you pay it off.

You're highly unlikely to be able to use a 0% purchase card to pay off the loan directly.  It's more than likely that it would be treated as a cash advance, meaning it wouldn't qualify for the 0% promotional rate.

GoldenOldy

…and they have confirmed it will be classed as a purchase! Yipppee

GoldenOldy

Thanks all for your help and advice. 

MyRealNameToo

GoldenOldy said:

…and they have confirmed it will be classed as a purchase! Yipppee

Who is "they"? 

Only your credit card company can say with absolute certainty and its unlikely they will say until the transaction goes through as they won't know the MCC that will apply which is what they use to decide if something is a cash like transaction