Is Buying a Used Car With a Credit Card a Good Thing? – Karla

Karla wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

Is buying a used car with a credit card a good thing?

Karla”

The Answer:

 

Dear Karla,

Excellent question. My answer may surprise you. Actually buying a used car using a credit card can be a very smart thing to do for two reasons.

  1. If you have a problem with the dealer you can dispute the transaction and have the credit card company help to resolve the issue for you.
  2. If your credit card offers you reward perks that you will use it can rack them up faster. For example I really love the Southwest Visa card for getting free flights anywhere they fly.

But this is only a good thing to do if you can afford to pay the card off within one to three months. The last thing you want is to carry a big balance on a credit card and have the bank jack your rate way up.

Big Hug!

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@GetOutOfDebtGuy

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  • Rob

    The interest rate thing is what you really have to be leary of. I have 2 cards, one with Chase, the other with Citibank. Both of these companies have jacked up their rates because of market conditions, even for people who have never been late paying them.
    If I was thinking of using them for this, I would find a card that guarantees a low rate for a period of time and make sure you can pay the card off before this period is up.
    But aside from that , I think that credit cards are the evil spawn of Satan, designed to keep you as a indebted slave to a bank for life. Personally, I would try to find a fixed rate loan ,even if it costs more. The worst they will do is take back the car if you default. The card companies will seize your home and lock up your assets. You put your life in the hands of merciless pigs everytime you use them.

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