Is it better to buy a car with a credit or debit card?

Since credit cards typically charge much higher interest rates than auto loans, you'll only want to charge a car to your credit card if you know how you'll pay down the balance. For example, it could make sense to pay for a car with a credit card if you have the cash in the bank to cover the purchase.



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Using a credit card to pay a car loan only replaces one debt with another; it doesn't lower your overall indebtedness. The interest rate may be higher on the credit card than on the car loan you're paying off.

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A down payment between 10 to 20 percent of the vehicle price is the general recommendation. But if you can afford a larger down payment, you can save even more money on interest payments over the life of the loan.

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