Use Of A Credit Card To Buy A Car Is A Good Idea?

It is possible to purchase a vehicle using your credit card in some dealerships. However, this can be problematic. Buy here pay here site in West Virginia allows you to purchase your first used vehicle. You should consider a few factors if you are planning to purchase your vehicle with a credit card, more hints.

1. Limit and usage of your credit card

Credit limit refers to the amount that your credit card company will allow you to charge. Your credit limit may be too low to allow you to buy a car without going over the limit. It’s possible that you don’t want to buy a car even though your credit limit can cover its full price. The closer you are to your card limit, the higher the credit usage ratio. The credit utilization rate is the ratio of credit available to credit used. A high credit utilization ratio can negatively impact your rating.

2. Interest rates high on credit cards

The interest rates charged on credit cards can be very high. Credit card interest rates were 16.28% in comparison with a 48 month new car loan that averaged 4.95%. Credit card interest rates can be higher than auto loans if the purchase is not paid off immediately and you only pay minimum payments.

3. Earnings potential

A rewards credit card can be used to make big purchases such as a new car. It can also help you earn more rewards or miles. The card is only worth it if you pay for the entire amount immediately. Fees and interest will most likely exceed any rewards.

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