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Paying My Auto Loan with A Credit Card

Contributor

Paying My Auto Loan with A Credit Card

Hi friends. I am interested in paying my auto loan in person with a credit card.

 

The loan officer I spoke with at the CU stated that the payment  would processed as a "cash advance". I don't want to pay any interest when my statement generates, therefore, if I pay my card in full will I eliminate the fee?  

 

BTW, bank draft is also available, but since I use a non reward cc for several monthly bills, I figured one more wouldn't hurt. Smiley Wink  Thoughts?

 

 

Amex BCE| BOA CB| Freedom| Citi DC| Discover It|
Message 1 of 13
12 REPLIES
Established Contributor

Re: Paying My Auto Loan with A Credit Card Question

Does your credit card offer rewards on cash advances? I don't have any that do but maybe there are some that offer that?

 

To answer the question though, so as long as you don't have a balance on the card already, then if you pay in full you shouldn't accrue interest. But usually cash advances start accruing interest from the day of the transaction, so there is no grace, so you would need to pay immediately.

WM TransUnion- 650 (6/2014) Credit Sesame Experian- 691 (6/2014) Credit Karma TransUnion- 665 (6/2014)
Amex Zync/UNICORN- NPSL/Capital One Venture One Pro -$7,000/NFCU Cash Rewards- $7,500/NFCU NavChek- $5,000/SouthWest Airlines- $5,000/Capital One Quicksilver Platinum- $3,000/Wal-Mart Discover- $6,000/Bill Me Later- $2,200/JCP- $4,700/Discover IT- $500/Care Credit -$2,300/Old Navy Visa- $2,000/New York & Company - $1,000/Capital One -$800
GOALS: No new inqs until 10/30/14. Pay off debt consolidation loan in less than 1 year. Snowball debt payments.
Last HP: 3/5/14
Message 2 of 13
Valued Contributor

Re: Paying My Auto Loan with A Credit Card Question

They are not going to accept you CC as a normal charge. It sounds as though they will process it as a cash advance, which means that interest will start to accrue IMMEDIATELY. It also will be the Cash Advance Interest Rate, which is usually higher. Often much higher.

 

Sounds like a very bad idea since the extra cost is likely to be huge.

Message 3 of 13
Contributor

Re: Paying My Auto Loan with A Credit Card Question

Thank you all so much for the information. My auto is due on the 26th, and I pay my cc bill on the 5th. Based on your answers I am going to do the bank draft option. I refuse to pay ANY interest if I don't have to.

 

To answer your question, the card I use for some monthly bills is a CapOne card that has no rewards whatsoever. It's my oldest cc and I run about 1k of my monthly bills through it.

 

I have learned a valuable lesson today, ask questions before making costly decisions. Thanks all, you rock.

Amex BCE| BOA CB| Freedom| Citi DC| Discover It|
Message 4 of 13
Regular Contributor

Re: Paying My Auto Loan with A Credit Card Question

Well for one it will go through as a cash advance because no company allows a credit card payment of a loan (as I know of). Second why are you not taking a balance transfer out on the card and paying it that way. Third if you have the available funds to pay the card in full when the statement cuts because you don't want to pay cash advance fees then why not pay your loan with cash?

That's what I seem to have gathered when I read your post. If I read it wrong, my apologies.
Message 5 of 13
Contributor

Re: Paying My Auto Loan with A Credit Card Question

I read my post again, and it does seem that I want to pay the amount of the loan in full doesn't it? Actually, I thought I could pay my monthly payments using a cc as a form of payment. By reading your post, I now learned that it is not possible. Thank you for clarifying. I thought "well, it's just another monthly payment I can pay using my card. It  will help keep my cc account active." I just realized it is not as simple as I thought. Thanks again.

Amex BCE| BOA CB| Freedom| Citi DC| Discover It|
Message 6 of 13
Regular Contributor

Re: Paying My Auto Loan with A Credit Card

https://chargesmart.com/ offers what you are looking for, of course they charge fees; but it is better than paying the interest on a cash advance.

Message 7 of 13
Frequent Contributor

Re: Paying My Auto Loan with A Credit Card Question

I know a lot of people in the past racked up huge rewards points balances with AMEX by running ALL of their bills (mortgages, cars, etc) through their AMEX and paying it off each month.  I don't know if that is still anoption for AMEX people, but for cards that don't treat such payments as a cash advance, there is no real reason it can't/shouldn't be done (other than adding an unnecessary step if you have the cash to cover it).

Message 8 of 13
Contributor

Re: Paying My Auto Loan with A Credit Card Question

Thanks for the above information. I wish I could have do what Amex customers can do. Knowning that the possibility is there is all I was looking for. The CU I financed my auto with says they will take the payment as "cash advance" though.

Amex BCE| BOA CB| Freedom| Citi DC| Discover It|
Message 9 of 13
Regular Contributor

Re: Paying My Auto Loan with A Credit Card Question

Be advised chargesmart will NOT work with Amex. I wish it did as I could pay my rent (and mortgage when I get my house), car, and motorcycle payment through it.

Message 10 of 13