In the past, the high interest rate on a credit card would have made this a very expensive way to finance your new car, but over the last few years intense competition in the credit card market has forced rates much lower.Aside from potential savings, there could be added benefits to buying a car with your credit card. The greatest advantage to paying for a car with your credit card is that it becomes an unsecured loan. Should you find yourself jobless at any time in the future the automobile does not run the risk of being repossessed. You own the car outright – not the bank. A second benefit of placing your car purchase on a credit card is you have the option of paying varied amounts on your car each month.

While the low rate credit card market has taken off, there are still a lot of high interest rates out there too. If the seller doesn’t take credit card or you want to avoid the surcharge, you might consider withdrawing the available funds from your credit card via an ATM or from a bank branch.Make sure you check the cash advance interest rate on your card if you’re considering this option.

You don’t want to find yourself in a position where you’re over your limit and struggling to pay your regular bills because you’ve put a whopping great car purchase on your credit card.You might also be considering using your credit or charge card to buy a car in order to get rewards points, and then paying it off immediately with cash or transferring the loan to another type of finance.

Many credit card issuers entice potential consumers with various introductory 0% interest rate deals for a certain period of time. This introductory rate period usually spans somewhere between 6 months and 1 year.

Tags: Credit cards

This entry was posted on Monday, July 6th, 2009 at 7:21 am and is filed under Credit Card. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.