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Can you use your credit card as a down payment?

Member

Can you use your credit card as a down payment?

So I got a Capital One Spark Visa card, with a $5,000 credit limit, and there is nothing charged on it right now. I was wondering if the dealership would let me put $3000 on it as a downpayment. I want to do this so I can earn rewards on the card, and I would pay it off when I get my taxes back in 2-3 weeks.

9 REPLIES
Moderator Emerita

Re: Can you use your credit card as a down payment?

Hi ZTkratos! Smiley Happy

 


ZTkratos wrote:

So I got a Capital One Spark Visa card, with a $5,000 credit limit, and there is nothing charged on it right now. I was wondering if the dealership would let me put $3000 on it as a downpayment. I want to do this so I can earn rewards on the card, and I would pay it off when I get my taxes back in 2-3 weeks.



Some dealerships do, and some don't. Those that do usually cap the dollar amount of the transaction, and some cap the total dollar amount and the percentage of the downpayment. You'll have to check with the specific dealership(s) that you're leaning towards purchasing from to see what their policy is.

 

But, if I may, I'd suggest that you just wait the two to three weeks until you have your tax refund in hand, and then go forward with your auto shopping, negotiating, and purchasing.

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Regular Contributor

Re: Can you use your credit card as a down payment?

I have never heard of it but even with the plan to pay back with a tax refund sure doesnt sound like a wise money decision. 

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Epic Contributor

Re: Can you use your credit card as a down payment?

We are going through this now... Here in CA seems most will accept a credit card however the one we are going to today does not so spoke with Navy yesterday and we can slide over a Cash Advance from credit card into checking account for no fee and 2% above Standard APR wich is 9.65%.

The reason for either credit card or cash advance is CarMax offered $9k for the car which is $2k higher then Mercedes had and since the car has small loan on it It will be about 5 days to get a check from CarMax for difference which is the $5k we want to put down on the new (used) car we are buying.

Hopefull in the end the dealership wants the deal so bad they will just match the $9k CarMax offer!

The only thing I would suggest is just calling the card before you leave home and let them know you are going shopping and expect to be putting a charge of (blank) through, should help avoid any security calls or holds for verification.

Super Contributor

Re: Can you use your credit card as a down payment?

 

It varies by dealer, and there is very likely a cap on the amount that you can charge.   Definately call the dealer and your CC beforehand to understand what their policy is, what cards they accept, and to make sure there won't be any issues with a large transaction amount.

 

Good luck !

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Established Contributor

Re: Can you use your credit card as a down payment?

Many dealers will allow it up to a certain amount, usually $1k or $2k, however our Lexus dealer said we could put up to $10,000 of the purchase price on the Lexus Visa Card which netted an immediate $500 worth of Lexus service credit via the card's reward system, so it was worthwhile to it.  We just paid it off when the bill came.  Check with the dealer to see what they will allow, it's up to them.

Member

Re: Can you use your credit card as a down payment?

I called the dealer and he said they allow up to $2500 down on credit card. YES!

Cross your fingers and hope that I'm posting in the auto loan approval thread in the next few days!

Super Contributor

Re: Can you use your credit card as a down payment?

Many dealers accpet credit card downpayment.

 

In my case I would use credit card to get the points; i.e. you already have the money in your bank but you charge it and pay if off and get the rewards.

 

Although depending on the APR on your credit card, if you put lets $2000 with a 20% + APR, it will cost you a lot if you have to pay it in lets say 6 instalments.




Super Contributor

Re: Can you use your credit card as a down payment?


ZTkratos wrote:

I called the dealer and he said they allow up to $2500 down on credit card. YES!

Cross your fingers and hope that I'm posting in the auto loan approval thread in the next few days!



Cool !  I hope that you can score some valuable reward points with your purchase.......Good luck !

 

I know some cards give you a Major bonus,  like the Mercedes AMEX card offers 6X points on dealership purchases !

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Established Member

Re: Can you use your credit card as a down payment?

in my case i paid the DP by credit card