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Purchasing a car is a large 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 a minimum spending requirement for a credit card sign-up bonus or for a elite-qualifying dollar waiver for airline status, too. You could even get lucky like Richard Kerr and be able to put an entire new car purchase on a rewards card like the Platinum Card® from American Express.
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.
One other point to keep in mind: These dealerships have to pay merchant fees on the charge, which range from 1-4%. This is not to the liking of many dealerships, as it 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 paying cash. In essence, you could use the card to leverage your final price down.
However, if you do decide to swipe your way to a new car, here are the best credit cards for purchasing a car.
The Amex Platinum is built for large purchases like a 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 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 car 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 worth it.
The Business Platinum could be an ideal option for a large purchase like a car. The card has a few different perks than the consumer Platinum Card mentioned above. These include a membership to WeWork (must enroll by December 31, 2019) and up to $200 in statement credits for Dell purchases each year.
What makes this a great option for buying a car is that for individual purchases over $5,000, you will earn 1.5x Membership Rewards per dollar (up to 1 million additional points per year). If you were to purchase a $25,000 car on the Business Platinum, you’d can earn 37,500 Membership Rewards points, worth $750 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.
While the two previous cards both have large annual fees, the Blue Business Plus Amex 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 up to $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 Singapore Airlines, Cathay Pacific and Hilton Hotels.
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 purchase.
The Freedom Unlimited is a great card for earning valuable cash back or Chase points on your new ride. New card holders can earn 3% cash back on up to $20,000 spent in their first year of card membership, and 1.5% afterward. If you’re an existing card holder you’ll earn 1.5% back — which isn’t the highest return possible, but it looks even better if you also have a Chase card that earns Ultimate Rewards points (like the Chase Sapphire Preferred Card), since in that case the 1.5% cash back can be converted into 1.5x Chase points, worth 3 cents based on TPG’s valuations. If you’re a new card holder, you’d be able to leverage this feature to get 3x as well.
If your new vehicles were to cost approximately $20,000, that’s $600 back or 60,000 points 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 17.24-25.99%. If you’re able to pay off your car before that 15 months is up, this is a great way to finance a car and get great cash back at the same time.
Large purchases like a car are a great way to earn a large sum of points, miles or cash back on a credit card. 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.
Featured photo by hxdbzxy / Shutterstock.
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WELCOME OFFER: 60,000 Points Terms Apply.
TPG'S BONUS VALUATION: $1,200
CARD HIGHLIGHTS: Delta Sky Club and Centurion lounge access, $200 annual airline fee credit and up to $200 in Uber credits annually
- 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