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Do dealers still allow you to charge some or all of your new car purchase on a credit card? I was wondering if I can do this and then pay off the CC when I get the monthly bill to earn a nice hefty reward.
What many don't understand is that the credit card companies charge the merchant anywhere between 2%-3% of the purchase price...so your dealership will be paying $400 in fees on a $20K purchase. Most dealerships allow up to $5000 to be put on a card but with the current credit crisis, many dealers around here will only allow $3000.
I used a CC for a deposit in the past and the max they would allow was $2,750. The merchant fees kill them on the big transactions. Best just to find out how much they would let you use and put the max on there to get the points.
I was sure my parents charged their downpayment when they bought their X5, but this was 3 yrs ago and with the whole Wall St. financial debacle things may have changed.
I'm surprised some enterprising CC company like FirstBank hasn't teamed up with certain dealers in major cities to offer points on purchase with a card. Seems like a win-win for both the dealers & banks.
I was sure my parents charged their downpayment when they bought their X5, but this was 3 yrs ago and with the whole Wall St. financial debacle things may have changed.
I'm surprised some enterprising CC company like FirstBank hasn't teamed up with certain dealers in major cities to offer points on purchase with a card. Seems like a win-win for both the dealers & banks.
I was sure my parents charged their downpayment when they bought their X5, but this was 3 yrs ago and with the whole Wall St. financial debacle things may have changed.
I'm surprised some enterprising CC company like FirstBank hasn't teamed up with certain dealers in major cities to offer points on purchase with a card. Seems like a win-win for both the dealers & banks.
CCs are mostly unsecured debt. With auto loan defaults increasing (even on secured loans with the threat of one's car being repossessed), a bank would have to be insane to 'team up' with dealers by lowering their CC merchant charges, paying rewards/points to customers, and then losing X% of entire loan balances to defaults (with very little recourse).
Do dealers still allow you to charge some or all of your new car purchase on a credit card? I was wondering if I can do this and then pay off the CC when I get the monthly bill to earn a nice hefty reward.
We pay for *everything* with our rewards card - even a pack of gum or a 6 pack of beer! But we pay off our balance every month. It would be nuts to pay 12 percent interest (our interest rate) on a car over the long-term. I seriously doubt that the amount of points that you would receive would offset the amount of interest paid. I'm sure there is a math genius here (or a financial consultant) who can come up with the exact figures. But my guess is that you'd wind up in the hole, for sure.
Dealers do not want to pay the CC companies. I have tried to buy both new and used cars with CC as I have the limit and the cash to pay the bill but no dealer would agree.
We pay for *everything* with our rewards card - even a pack of gum or a 6 pack of beer! But we pay off our balance every month. It would be nuts to pay 12 percent interest (our interest rate) on a car over the long-term. I seriously doubt that the amount of points that you would receive would offset the amount of interest paid. I'm sure there is a math genius here (or a financial consultant) who can come up with the exact figures. But my guess is that you'd wind up in the hole, for sure.
20yrsinBranson
I think the OP's plan IS to pay off the balance and reap the rewards. I maxed out my CC and did the same when I bought a a car.
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