OK to put car down payment on CC?

[beamg5]

Unless one of the parties to the transaction maintains some "rule" that disallows using the card for that purpose.....do it !! You have everything to gain. Example..........I was shopping for a new auto last June, a Chrylser 300C, in fact. Having had a 2010, and also having seen the lovely Challenger's that Dodge offers, I decided to "scratch an itch" and put an end to a mid-life crises at the same time !! Long story short, I found a well-equipped, "faster that the law allows," Challenger SRT8. For the record, the cost, "all in" was $50K and change.

Having done this before, I put the entire $50K on my BOM Diners Club Card which only recently was assigned a credit limit of $55K. Note that previously, cards like these...AMEX, etc had no preset spending limit -but- even the rules for maintaining these so-called prestige cards has "tightened."

Again,.....I put the entire amount on the card (which required a quick confirmation of identity and intent from the Card Service Rep,) and paid the entire amount off in the next availalbe billing cycle as required. If it matters as it regards this discussion, the Diners Club card is not reported to any of the CRAs -unless- the consumer falls 90 days in arrears. Note further that I had already been pre-approved by my Credit Union for a $25K personal loan so in actuality, I had a $25K balance with them (the CU) shortly after picking up my check -but- after having taken delivery on the car.

I was awarded 50,000 award points from Diners for the transaction which leaves me just 10-12.000 points short of round trip airfare for two + accomodations for a 15-day trip to London/Amsterdam. That was the plan all along !!

Good luck, and......

May your situation be as "painless" and profitable as the one I incurred,

Best Regards

[jamesdwi]

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@enharu wrote:
You will be fine.
My dealership allowed only 2500 on a credit card because I was really hard on the price lol. Got my car 1400 below true car prices. No other dealership in California was even willing to go 800 below true car for what I wanted.

Check with your dealership what's the max they allow. The more you bargain on the prices, the less they will allow. You can always ask them for the discount upfront and just pay cash. They are going to get charged transaction fees if u use a card, so might as well let you have a bigger discount and they avoid that fee altogether.

For cars 80k and up pretax, most car dealerships will let you pif using a credit card without any issues unless you really got a good bargain on the price.

My friend only has 10k limit on her csp and Beverly Hills Porsche allowed her to put the whole car on the card. She literally had to do 11 payments and drop by the branch 11 days in a row except Sunday to pay in full before she was able to finally pick the car up. The trouble she went through for rewards.... Worth it I suppose.

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Sounds like they made a few too many trips to the bank, CSP is a signature, probably could of did half as many payments perhaps even one with a few phones calls and a fax to a friendly underwriter that wanted to increase hidden limit for the purchase.

[JPH]

Buy a reliable used car instead and pay cash or as much of it in cash as possible.  Don't be a slave to the creditors.  You don't have to have that shiny new toy that bad.  The thrill you will get from a new car will be gone before it is paid off if you use too much credit.  

[electra]

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@JPH wrote:

Buy a reliable used car instead and pay cash or as much of it in cash as possible.  Don't be a slave to the creditors.  You don't have to have that shiny new toy that bad.  The thrill you will get from a new car will be gone before it is paid off if you use too much credit.  

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LOL, you have totally misunderstood my question.  I'm looking to get points/cash back.  I would pay it off immediately...within days.

[indiolatino61]

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@electra wrote:

Should be getting my new car in about a week.  Was wondering if it's ok to run the down payment on my CC (NFCU Cash rewards)?  I would pay it off immediately but I figured that would be a great way to get some cash back.  Is this a no-no? Navy has been very good to me and don't want to do anything that would piss them off.  

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I suppose as long as the cc is not from the same lender you are getting the car loan from it is ok...?

[seb33sf]

Being a bit of a rewards junkie myself, I like how you think! From a FICO standpoint, the main thing you want to consider here is the utilization rate component of your credit score. In other words, if you put a $4000 down payment on a card with a $5000 limit, your utilization rate on that card will be 80%. (This applies even if you pay off the balance within the same billing month and never incur any interest charges). A utilization rate that high will temporarily decrease your score; by how much depends on a number of factors. Utilization is a significant component of FICO, and it considers both the utilization rate across all your cards, as well as the utilization rate on each individual card. I am not sure how "sticky" a high utilization rate is with regards to scores, but I imagine that your score would bounce back pretty quickly once you pay the balance off. Hence, my vote is to go for it UNLESS you are currently applying for something like a mortgage/re-finance, in which case, you really don't want to do anything that could ding your scores. Of course, if you are charging $2000 and your limit is $20,000, you have nothing to worry about in terms of utilization. As far as upsetting Navy, as long as you stay within your credit limit and pay the bill on time, they should be perfectly happy. Even though they won't be making any interest off of you, they'll still be getting merchant fees on the transaction which are in excess of any rewards they float back to you. If anyone is going whine that they would really, really prefer that you pay by check, it's going to be the dealership.

[mrgoattoo]

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@electra wrote:

Should be getting my new car in about a week.  Was wondering if it's ok to run the down payment on my CC (NFCU Cash rewards)?  I would pay it off immediately but I figured that would be a great way to get some cash back.  Is this a no-no? Navy has been very good to me and don't want to do anything that would piss them off.  

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I got a 'balance transfer' for 3% to buy a used car (about $5000 in all) on my Citibank card and 0% APR for a year.

I doubt you'd be able to use the credit card as a credit card to pay for a car but you might be able to have the card provider to the same and do a balance transfer and just drop the money directly into your checking acct like we did.

Citibank is great like that. Ihave a $10000 credit line and they will give me cash in the form of a balance transfer up to the CL. Doing it that way its not the huge 20% APR like when you draw cash out on the card at an ATM.

[hrguy]

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@seb33sf wrote:

Being a bit of a rewards junkie myself, I like how you think! From a FICO standpoint, the main thing you want to consider here is the utilization rate component of your credit score. In other words, if you put a $4000 down payment on a card with a $5000 limit, your utilization rate on that card will be 80%. (This applies even if you pay off the balance within the same billing month and never incur any interest charges). A utilization rate that high will temporarily decrease your score; by how much depends on a number of factors. Utilization is a significant component of FICO, and it considers both the utilization rate across all your cards, as well as the utilization rate on each individual card. I am not sure how "sticky" a high utilization rate is with regards to scores, but I imagine that your score would bounce back pretty quickly once you pay the balance off. Hence, my vote is to go for it UNLESS you are currently applying for something like a mortgage/re-finance, in which case, you really don't want to do anything that could ding your scores. Of course, if you are charging $2000 and your limit is $20,000, you have nothing to worry about in terms of utilization. As far as upsetting Navy, as long as you stay within your credit limit and pay the bill on time, they should be perfectly happy. Even though they won't be making any interest off of you, they'll still be getting merchant fees on the transaction which are in excess of any rewards they float back to you. If anyone is going whine that they would really, really prefer that you pay by check, it's going to be the dealership.

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This is not true.  Utilization only affects Fico if it is reported.  You can max the card out, as long as it is paid BEFORE it reports, Fico does not factor monthly spending into scoring, just reported balances.

[enharu]

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@hrguy wrote:

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@seb33sf wrote:

Being a bit of a rewards junkie myself, I like how you think! From a FICO standpoint, the main thing you want to consider here is the utilization rate component of your credit score. In other words, if you put a $4000 down payment on a card with a $5000 limit, your utilization rate on that card will be 80%. (This applies even if you pay off the balance within the same billing month and never incur any interest charges). A utilization rate that high will temporarily decrease your score; by how much depends on a number of factors. Utilization is a significant component of FICO, and it considers both the utilization rate across all your cards, as well as the utilization rate on each individual card. I am not sure how "sticky" a high utilization rate is with regards to scores, but I imagine that your score would bounce back pretty quickly once you pay the balance off. Hence, my vote is to go for it UNLESS you are currently applying for something like a mortgage/re-finance, in which case, you really don't want to do anything that could ding your scores. Of course, if you are charging $2000 and your limit is $20,000, you have nothing to worry about in terms of utilization. As far as upsetting Navy, as long as you stay within your credit limit and pay the bill on time, they should be perfectly happy. Even though they won't be making any interest off of you, they'll still be getting merchant fees on the transaction which are in excess of any rewards they float back to you. If anyone is going whine that they would really, really prefer that you pay by check, it's going to be the dealership.

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This is not true.  Utilization only affects Fico if it is reported.  You can max the card out, as long as it is paid BEFORE it reports, Fico does not factor monthly spending into scoring, just reported balances.

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+1

[chriscarter]

The dealership may not allow it because you can dispute credit card charges up to 90 days after purchase.