A car loan can become a huge burden when you are repaying the loan on EMIs for a long duration.  However, there is a way to reduce the burden by moving your car loan to your credit card, as long as you take certain precautions. Use a car loan EMI calculator to find out the EMIs you should be paying on your car loan.

The Best Way to Pay Off Your Car Loan with A Credit Card

Paying off your car loan with a credit card is called a transference of debt, but the best way to do it with a credit card is to make use of the 0% introductory annual percentage rate (APR), which will effectively save you money on interest. When you pay your car loan with your credit card, you are essentially closing one debt and taking on another. And if you fail to pay the credit dues within the APR window, you could end up paying more than you would have if you had continued with the car loan.

The Advantages of Paying Your Car Loanwith Your Credit Card

  • You get an interest-free window:  Shifting your car loan to a credit card within the 0% introductory APR will save you precious money. However, you must remember that APR on a credit card would be much higher that the interest rate on a car loan, so do it only if you are confident of paying off your credit card debt within the 0% APR window.
  • Immediate transfer of ownership: When you pay off your car loan with your credit card, it would be the same as buying your car outright, so you get ownership title papers immediately.
  • Get reward points: Paying up your car loan with your credit card could earn you reward points, which would be like a bonus after having evaded paying interest on the car loan.If you’re able to pay up your car loan with a credit card, you could earn cash-back or rewards points.

The Disadvantages of Paying Your Car Loan with Your Credit Card


  • High transfer charges: Transferring your car loan debt to your credit card could entail a huge transfer fee, which may not make it worth the while. So, you should talk both to your lender and your credit card company, understand the pros and cons thoroughly, and then only go through with the transfer if it is profitable.


  • Your credit score could go down: To maintain a good credit score, you should not use more than 30% of the full credit available to you, otherwise it could adversely affect your credit ratings, and make it difficult for you to get loans in the future.

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