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New Member
Posts: 5
Registered: ‎03-15-2009
0

Should I Buy a Car with my Credit Card or Auto Loan?

Hello all,

 

I want to buy a used car. My FICO score is 765, but I really don't want to apply for an auto loan because I do not think the Loaners will approve any loans since the car I want has over 100,000 miles on it. My Bank Of America credit card has a limit of $25,000 limit on it and I have no debit/charges on it. The car will be just over $10,000. If I transfer that amount from my credit card to my checking to pay for the car, BOA will give me 0.99% APR until December 2009, then it will jump back to 8.99%. During this time however, BOA states it can raise my APR to 27% for no reason and without notice. I know Suze Orman always says to try not to have credit card debit, so that is why I am not sure what to do.

 

My question is: Should I just buy the car with my credit card to avoid auto loan denials, or search for a lender who is willing to approve an autoloan?

 

Thanks 

Super Contributor
Posts: 6,026
Registered: ‎09-18-2007
0

Re: Should I Buy a Car with my Credit Card or Auto Loan?

I dont think dealer accepts the complete amount through credit card payment as dealer has to pay the surcharge on the transaction. You can ask dealer and see what they say.
New Member
Posts: 5
Registered: ‎03-15-2009
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Re: Should I Buy a Car with my Credit Card or Auto Loan?

Thanks for the quick reply. I actually won't be paying directly with my credit card. I will transfer the amount to my checking and pay through that. It will cost me a 3% fee of the amount I transfer, but I don't know if I should do that or jusy keep looking for other auto loan lenders. 
Established Contributor
Posts: 991
Registered: ‎05-14-2008

Re: Should I Buy a Car with my Credit Card or Auto Loan?

[ Edited ]
Almost always better to finance it through a fixed rate auto loan for the reasons you state.  One false move on your part, or at the card holders whim, they can jack your rate way up.  Do not assume your rate after the teaser rate is over will be 8.99%, it can be changed at their discretion.  In this environment it is too dicey to fiance it through a BT from your card.
Message Edited by Watchmann on 03-15-2009 10:46 PM
Epic Contributor
Posts: 24,208
Registered: ‎10-23-2007

Re: Should I Buy a Car with my Credit Card or Auto Loan?

Depending what kind of car it is and what the book is, banks will still lend on it if it's not to old.

I use to have a lexus with over 100k miles and my credit union had no problem lending on it with good credit, which you have. 

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Valued Contributor
Posts: 1,668
Registered: ‎02-18-2009
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Re: Should I Buy a Car with my Credit Card or Auto Loan?

Ok big question:

 

WHY DO YOU WANT TO PAY $10,000 for a 100,000 mile used car.

What is so special about it?

 

Based on that response we can look at your situation better.

 

PS SUZE ORMAN IS A MILLIONAIRE -YOU ARE NOT.

 

 

Signature line begins:
Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.
Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,
Established Contributor
Posts: 662
Registered: ‎09-07-2007
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Re: Should I Buy a Car with my Credit Card or Auto Loan?

Last year I let my brother get a little ford for $3000 and 2 Months ago I let him get a Eclipse for $9000 on my National City CC. It was 3 other guys test driving the car and he didn't have the whole $8000 so I just let him get it on my card but it's already paid off so I don't know how a CC company will feel leaving such a big balance for a long time. I think it's all up to what car lot u go to. Actually when I went with him to the car lot I saw a we accept Master card/Visa sticker in the window.
Advice is what we ask for when we already know the answer but wish we didn't.
Regular Contributor
Posts: 231
Registered: ‎02-16-2008

Re: Should I Buy a Car with my Credit Card or Auto Loan?

IMHO, I would get an auto loan for a number of reasons.

1. An auto loan would be fixed, whereas the ccc could rate jack you at their will thus costing you more money.

2. Point wise. Your fico score will drop with 40% uti(10k/25k) on a credit card which will cost you about

    10-20 pts.

 

My2cents

700 Club Member
Frequent Contributor
Posts: 488
Registered: ‎04-09-2008
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Re: Should I Buy a Car with my Credit Card or Auto Loan?

Have you checked with your bank to see if they offer a LOC? My scores were around 600 and I had a secured credit card with mt Credit Union. I was able to get a $5000 LOC account, the interest rate is a little higer than the credit card- And I haven't had to use it- it's just nice to have that LOC in case of emergency. I briefly thought about it while shopping for a used car for my son.
New Member
Posts: 5
Registered: ‎03-15-2009
0

Re: Should I Buy a Car with my Credit Card or Auto Loan?

Thank you for all your helpful replies.

 

The car is a 2005, so it's not too old. I asked BOA about a loan for it and they quickly said they don't finance cars over 100K miles. Really they are the only ones I asked. I did not know that my score would drop by having high credit card debt, thanks for the heads up. I guess I will try to find a lender who is willing to look over the miles on the car.

 

Anyone recommend a good lender that may be able to finance such a car?

 

Thank you again.

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