Whether you can pay your car loan with a credit card depends on your lender, not on you
Most car lenders do not accept credit card payments directly. They want the money to come from a bank account, either as an automatic withdrawal or a check. If your lender's website or payment system does not show a credit card option, calling their customer service line is the fastest way to confirm whether they take them at all.
Some lenders do accept credit cards, but they charge a fee — usually 2% to 3% of the payment amount. That fee often wipes out any rewards you would earn, making the transaction more expensive than paying from your bank account. A few lenders accept cards with no fee, but these are uncommon.
If your lender refuses credit card payments, you have a workaround: use a third-party payment service like Plastiq or a cash advance from your credit card to fund a bank transfer. Both routes cost money and come with their own tradeoffs, which this guide walks through below.
Key Takeaways
- Call your lender's customer service line to ask directly whether they accept credit card payments, because most do not and their website may not say.
- If they do accept cards, ask about the fee — it is usually 2% to 3% and often costs more than any rewards you would earn.
- Third-party payment services like Plastiq let you pay with a credit card even if your lender refuses, but they charge a fee and take several business days to process.
- A credit card cash advance can fund a bank transfer to your lender, but cash advances charge interest immediately and usually have a higher interest rate than purchases.
- Paying your car loan on time from your bank account is the cheapest option and the one your lender prefers.
When your lender accepts credit cards directly
If your lender does accept credit card payments, you will see the option on their website or mobile app, usually labeled "Pay by Credit Card" or "Credit Card Payment." You enter your card number, expiration date, and CVV the same way you would on any other website.
Before you do, ask your lender what fee they charge. Some lenders charge a flat fee per transaction (for example, $5 or $10), while others charge a percentage of the payment (usually 2% to 3%). A percentage fee means a $500 payment costs you $10 to $15 just to make it. If your credit card earns 1% cash back, you would earn $5 on that $500 payment but pay $10 to $15 in fees — a net loss.
The fee makes sense only if you are in a situation where you must pay immediately and have no other way to fund the payment. Otherwise, paying from your bank account costs nothing and takes the same amount of time.
Using a third-party payment service to pay with a credit card
Services like Plastiq, Stripe, and Square Cash let you pay almost any bill with a credit card, even if the recipient does not accept them. You create an account, enter your car lender's details, and authorize a payment from your credit card. The service then sends the money to your lender from a bank account they control.
These services charge a fee, usually 2% to 2.5% of the payment amount. So a $500 payment costs $10 to $12.50. The money takes 1 to 3 business days to reach your lender, so you need to plan ahead — do not use this method the day before your payment is due.
This route makes sense only if your lender refuses credit card payments and you have a specific reason to use a credit card (for example, you are trying to meet a spending threshold for a sign-up bonus, or you need to rebuild credit and want the payment to show on your credit report). Otherwise, a bank transfer or check is faster and free.
Getting a cash advance to fund a bank transfer
A cash advance is when you withdraw money from your credit card as if it were an ATM. You can use the cash to pay your car loan from your bank account, which your lender will accept. But cash advances are expensive in two ways.
First, they charge a fee — usually 3% to 5% of the amount you withdraw. A $500 cash advance costs $15 to $25 just to get the money. Second, cash advances start accruing interest immediately, with no grace period like you get on purchases. The interest rate is usually higher than your purchase rate, often 20% or more. That means the longer the cash sits in your bank account before you pay your car loan, the more interest you owe.
This option is almost never worth it. The fees and interest add up quickly, and you are paying your car loan with borrowed money that costs more than the car loan itself. Use this only if you have no other way to make a payment and your car is about to be repossessed.
Why your lender prefers bank account payments
Car lenders want payments to come from a bank account because the money is may provide and arrives the same day or next day. Credit card payments are riskier for them — the cardholder can dispute the charge, or the credit card company can reverse it. That risk is why lenders either refuse credit cards or charge a fee to cover it.
From your perspective, paying from your bank account is also simpler. You set up automatic payments once, and they happen on the same day every month. There is no fee, no delay, and no chance of missing a payment because you forgot to process it manually.
What happens if you miss a car payment
If you cannot make your car payment on time, contact your lender immediately — do not wait until the payment is late. Many lenders offer deferment (pushing your payment to the end of your loan) or a temporary payment reduction if you explain your situation before the due date.
A late payment stays on your credit report for seven years and damages your credit score. If you are more than 120 days late, your lender can repossess your car. Trying to pay with a credit card to avoid a late payment is expensive and usually does not solve the underlying problem. If you are struggling to make payments, talking to your lender about your options is the first step.
Paying your car loan and building credit
Car loan payments do show up on your credit report and help build your credit history — but only if you pay on time. Paying late, even by a few days, can hurt your score. The payment method does not matter to your credit report; whether you pay from your bank account or a credit card, the lender reports the same information.
If you are trying to build credit and want to use a credit card for the rewards or the credit history, understand that most lenders do not accept them. A secured credit card or a credit-builder loan is a more direct way to build credit without the fees and complications of trying to pay your car loan with plastic.
Frequently Asked Questions
Can I pay my car payment with a credit card to earn rewards?
Only if your lender accepts credit cards with no fee. If they charge 2% to 3%, the fee usually costs more than the rewards you earn. Check with your lender first — most do not accept them at all.
What if my lender says no to credit card payments?
You can use a third-party service like Plastiq to pay with a credit card, but you will pay a 2% to 2.5% fee and wait 1 to 3 business days for the money to arrive. For most situations, paying from your bank account is simpler and free.
Does paying my car loan with a credit card help my credit score?
No more than paying from your bank account. Your credit report shows whether you paid on time, not how you paid. The payment method does not affect your score.
Is a cash advance a good way to pay my car loan?
No. Cash advances charge 3% to 5% in fees plus interest that starts immediately, usually at a higher rate than your purchase rate. This is the most expensive way to pay and should be a last resort only.
What should I do if I cannot make my car payment?
Call your lender before the payment is due. Many offer deferment or temporary payment reductions if you ask. A late payment damages your credit and can lead to repossession, so reaching out early is important.