Is it stupid to buy a used car with a credit card?

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andy1088
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Is it stupid to buy a used car with a credit card?

Postby andy1088 » Wed Jun 06, 2012 9:13 am

I may be buying an '09 Corolla today. I was going to pay part with a credit card and use my three cards that have 0% interest (Discover, BOA and Citi) and of course pay them off before I start getting interest. The way I was going to do it was pay about $3,800 on my cards, trade my old car in for about $3,500 and then pay the rest cash.

Do you guys think this is stupid or a smart idea? I figured putting the car on the credit card and then paying it off before the 0% goes away would be smarter than putting myself in a situation with a $200 a month car payment for 36 months in addition to extremely expensive full-coverage insurance ($250-$300 a month I pay $76 now).

Any and all advice is welcome!
My cards
Chase-Sapphire-$5,000 Freedom-$3,000, Amazon rewards-$700, Slate-$600
Citi- Diamond Preferred-$4,000, Thank you-$2,500
Discover IT-$2,500
Bank of America cash rewards-$2,000
Capital one newcomer rewards-$500


DavidNY
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Postby DavidNY » Wed Jun 06, 2012 9:15 am

Used but recent model year cars are usually a better buy than new cars. I wouldn't recommend trading a car in for another car, you won't get what it's worth. You're better off selling privately.

It's nice your seller accepts credit cards, but see if there's a cash discount.

andy1088
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Postby andy1088 » Wed Jun 06, 2012 9:17 am

Well, I was told I would get between $3,000 and $4,000 for my car. I paid $4,000 for it two years ago and the only thing I did to it was put new tires (approx $600) and the private party value in good condition is only about $4,000. It also has some issues (makes a LOT of noises and the gas mileage isn't what it is supposed to be).
My cards
Chase-Sapphire-$5,000 Freedom-$3,000, Amazon rewards-$700, Slate-$600
Citi- Diamond Preferred-$4,000, Thank you-$2,500
Discover IT-$2,500
Bank of America cash rewards-$2,000
Capital one newcomer rewards-$500

DavidNY
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Postby DavidNY » Wed Jun 06, 2012 9:21 am

Well in that case it sounds like trading it in will solve your squeaky car issues.

andy1088
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Postby andy1088 » Wed Jun 06, 2012 9:22 am

Indeed. The main reason I want to pay with cards is that I don't want to leave myself with no cash. I have rent to pay soon and other bills and unfortunately my rent can only be paid cash lol. The other thing is I'll have at least 11 months (BOA) to pay off whatever I charge. Cash would come out right away.
My cards
Chase-Sapphire-$5,000 Freedom-$3,000, Amazon rewards-$700, Slate-$600
Citi- Diamond Preferred-$4,000, Thank you-$2,500
Discover IT-$2,500
Bank of America cash rewards-$2,000
Capital one newcomer rewards-$500

agp
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Postby agp » Wed Jun 06, 2012 5:35 pm

0% APR sounds great for car buying, provided you will have no trouble paying it off and won't let the balance carry over till when you will get charged interest.

Main Card: Amex Platinum
For gas: Penfed Platinum Cash Rewards
For travel & dining: Chase Sapphire Preferred

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FastSRT8
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Postby FastSRT8 » Fri Jun 08, 2012 1:18 am

Sounds OK so long as you don't run into the interest accruing period. I'd say this was actually pretty smart. It's like a short term interest free loan. Now if you are getting points or anything else then you are technically ahead.
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