Can you put a car deposit on a credit card?

Credit cards can be used to make a down payment on a new automobile. However, you may or may not be able to do so based on the policies of your dealer. Because transaction costs cut into their profit margins, some merchants refuse to take plastic. There are some who take credit cards but charge a fee for the transaction. You’ll also need to have a large enough limit on your credit card if the dealer accepts credit cards as a down payment unless you divide the amount out over many cards.

Using a credit card as a down payment on a car is an option, but it isn’t mandatory. Such a significant purchase could be burdened with hefty interest rates. It is possible that, depending on the size of your credit limit, making a down payment on your credit card might affect your FICO score.

Here are the times when you should use a credit card to pay for a down payment on a car:
Credit cards are accepted by the dealer, and there are no additional fees for doing so. You’ve devised a strategy to pay it off that will save you money over alternative possibilities. For example, you may use a credit card with a 0% interest rate and pay off your whole bill before the standard interest charges kick in.

As a result, you’re making use of an incentive-laden credit card to make the payment. This presupposes that you have a handle on your finances. For example, some 0% cards give benefits, while others just allow you to pay off your amount as rapidly as possible. A credit card down payment on a new automobile may be the best option in these situations. It is, however, extremely unusual for all of these elements to come into play simultaneously.

Pros
As an added bonus, the use of a credit card for a down payment might earn you reward points like cash back or airline miles, depending on the type of card you’re using. Using the down payment from a new credit card to complete the initial spending criteria to receive those additional rewards points may be an option if you have a high sign-up bonus. However, you may only benefit from this if you have the money for a down payment and can make timely and complete payments on your credit card debt.

Avoid accruing interest on your credit card amount if you don’t. There may be a way to neglect this drawback, but we’ll get to that in a moment. Check your credit limit to see how much you can afford to put on your card before you make a buy ensure that you don’t go over your credit limit with your purchases. It’s possible that you’ll be using more of your available credit, which might damage your score.

Cons
Use of a credit card as a down payment means you’ll have to make two monthly payments on your car: one on your credit card and one on your auto loan if you can’t pay it off in full. Think of how much money you have available for these two more instalments.
Keeping track of everything is a challenge in and of itself, but it gets worse from here. For those who like to pay their bills automatically, this may be an option. It’s possible that you’ll end up paying more in interest on your down payment than you would if you paid it with cash.