The Best Credit Cards for Purchasing a Car

Mar 17, 2020

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Purchasing a car is a big investment with terrible returns. In nearly all cases, unfortunately, cars are depreciating assets and you won’t see that money again. However, you can help take that sting out by putting your vehicle purchase on a credit card to earn valuable points and miles. Large purchases like a new car are great way to hit minimum spending requirements for a credit card sign-up bonus or airline elite-qualifying waivers.

If you’re considering purchasing a car with a credit card, here is everything you need to know:

Max amount I can put on a credit card?

The maximum amount you can put on a credit card depends on the car dealership. For example, Tesla allows buyers to charge the $2,500 initial order fee to a credit card. If you’re lucky like TPG’s Richard Kerr, you may be able to put an entire new car purchase on a rewards card like The Platinum Card® from American Express.

Do all the dealerships accept credit cards?

If you’re in the market for a vehicle and looking to put the entire purchase on a credit card, be sure to call ahead and speak with the finance manager of the dealership. Some dealerships have a hard rule of not accepting credit cards for vehicle purchases, while others are glad to accept them.

These dealerships have to pay merchant fees on the charge, which range from 1 – 4% and cuts into their bottom line. If the dealership is willing to reduce the price of the car to get you the value of the points you would have earned through your rewards card, you may want to consider other options. In essence, you could use the card to negotiate a lower price.

Can I pay a portion of my car with my credit card?

Whether you can pay a portion of your car with your credit card depends on the dealership. Some dealerships will allow you to charge just small portion of the purchase price to your credit card. Others may allow you to charge the entire amount (just ask Richard Kerr).

Do I need to pay my full balance?

Whether you need to pay your full balance depends on your circumstance. If you charge a car purchase to a credit card offering 0% APR on purchases, you may be able to keep a balance without additional costs. If your credit card charges large interest fees then you will want to pay off your balance in full.

Benefits of using a credit card for buying a car – Impact to my credit score

Using a credit card to buy a car could have a negative impact on your credit if you end up carrying a balance. If the card balance balance isn’t paid down by the statement closing date, it gets reported to the credit bureaus. Depending on how much available credit you have across the board, a large card balance due to a car purchase could increase your utilization rate, which in turn can negatively impact your credit.

If you plan on paying off your card after charging a car purchase to it, then you can mitigate potential negative impacts on your credit.

Best credit cards for charging a car purchase

If you do decide to swipe your way to a new set of wheels, here are the best credit cards for purchasing a car.

American Express The Platinum Card

(Photo by Isabelle Raphael/The Points Guy)

The Amex Platinum Card is built for large purchases like a new vehicle, as it’s a charge card with no predetermined credit line. In fact, American Express has a vehicle purchasing program that aggregates dealerships that will accept your American Express card. However, the description of the program says “All participating Certified Dealers on the site accept the American Express Card for at least $2,000 and up to the full purchase price.” So you may not be able to put your entire vehicle purchase on the card. Again, be sure to give the dealership a call ahead of time to maximize your card.

As the Amex Platinum is a charge card, the entire purchase will be due on your next statement. So be sure you have the money ready to pay your card off when that statement rolls around. And keep in mind that this card has a high annual fee of $550 (see rates & fees), though if you travel frequently, its long list of benefits can make it worthwhile.

The Business Platinum Card® from American Express

(Photo by Isabelle Raphael/The Points Guy)
(Photo by Isabelle Raphael/The Points Guy)

The The Business Platinum Card from American Express could be an ideal option for a large purchase like a car. For individual purchases over $5,000, you will earn 1.5x Membership Rewards per dollar spent (up to 1 million additional points per year). On a $5,000 charge,  you’d can earn 7,500 Membership Rewards points, worth $150 based on TPG’s valuations.

Just be aware that this is also a charge card. The entire cost of the car will be due on your next statement. And like the Amex Platinum, the Business Platinum has a premium-level annual fee — in this case, $595 (see rates & fees). If you’re a business owner who values lounge access, luxury travel perks and the ability to earn 1.5x points on large purchases, though, it could make sense for you.

The Blue Business®️ Plus Credit Card from American Express

While the two previous cards both have large annual fees, the The Blue Business® Plus Credit Card from American Express does not have an annual fee (see rates & fees). While it doesn’t currently offer a welcome bonus, the card is extremely simple in its spending categories. You’ll earn 2x Membership Rewards per dollar on the first $50,000 in purchases each year and 1x per dollar afterward.

Membership Rewards points are extremely valuable, as they can be transferred to airline and hotel partners, including Air Canada Aeroplan, ANA MileageClub and more.

As this isn’t a charge card like the two above, be sure to check if your credit line is high enough to accommodate your car purchase.

Chase Freedom Unlimited

(Image by The Points Guy)

The Chase Freedom Unlimited is a great card for earning valuable cash back or Chase points on your new ride. New cardholders earn $150 after spending $500 on purchases in the first three months. You’ll also earn 1.5% back on all purchases. If you also have a Chase card that earns Ultimate Rewards points, your cash back rewards can be converted to Chase Ultimate Rewards points.

TPG values Ultimate Rewards points at two cents each, so if your new vehicles were to cost  $20,000, that’s $600 worth of points back in your pocket. The Freedom Unlimited also comes with 0% intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 14.99% – 23.74%. If you’re able to pay off your car before that 15 months is up, this is a great way to finance it and earn rewards at the same time.

Discover it Miles

On first sight, the Discover it Miles doesn’t seem very rewarding. The card earns 1.5x miles for every dollar spent, which is equivalent to 1.5% cash back. However, the card does match all rewards earned during the first year. So essentially, you could earn 3% cash back when using the Discover It Miles card to purchase a car.

Miles can be redeemed for statement credits at a rate of one cent per point or transferred directly into your bank account.

Bottom Line

Purchasing a car with a credit card is a great way to earn a large sum of points, miles or cash back. However, don’t forget to follow the Ten Commandments for Travel Reward Credit Cards. In all cases including when you’re making a large purchase, the commandment of thou shalt pay thy balance in full is key to maximizing your rewards.

For rates and fees of the Amex Platinum, click here.
For rates and fees of the Business Platinum, click here.
For rates and fees of the Blue Business Plus, click here.

Additional reporting by Ariana Arghandewal

Featured photo by Ruslan ShamukovTASS via Getty Images

The Platinum Card® from American Express

WELCOME OFFER: 60,000 Points Terms Apply.

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: Delta Sky Club and Centurion lounge access, up to $200 annual airline fee credit and up to $200 in Uber credits annually

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
  • Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
  • 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
  • 5X Membership Rewards points on prepaid hotels booked on amextravel.com.
  • Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
  • $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
  • $550 annual fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
N/A
Annual Fee
$550
Balance Transfer Fee
See Terms
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

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