Typically, it’s not very common to use your credit card to make down payments. Since there is a big credit card APR that comes with the down payments, it’s not the best way to use your card. Read below to see when is the right time to use your credit card towards a down payment.
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Auto Loan Down Payments
Nowadays, auto loans have only increased to more than $1 trillion. When you use your credit card for auto loans, be sure you’re well aware of the perks you might get from it. Making a down payment for auto loans can either be difficult, or earn you credit card rewards. Additionally, you should check with the car company if they allow you to use your credit card to pay. With this in mind there are several car dealerships that don’t let you use your credit card to make a transaction.
There are a good amount of reasons as to why they will not allow you to do so. One reason being that they will also have to pay transaction fees that makes a dent in their profits. Plus, the credit card holder will get chargeback rights that enables them to ask for a refund. Furthermore, dealerships that do allow you to use your credit card for an auto loan will normally come with charge convenience fees. Not to mention, with a huge APR for credit cards, it’s possible that it’s too grand to charge the whole down payment. Stay away from credit card debt or high interest fees when you save for a down payment.
Use Your Credit Card Towards a Car Down Payment
There are some car dealerships that will take credit card transactions if you have enough credit to do a down payment. Keep in mind that there are several dealerships that will have a limitation on how much you can charge your card. Rather than using your credit card to make a down payment, you can use it to get a cash advance instead. This method can be quite pricey but it will give you money for your payment.
However, be sure that you look into the fees that comes with getting a cash advance before you settle on getting one. Plus, if you get a cash advance on your credit card you will receive a repayment plan on it, and it will increase interest.
Making House Down Payments
As mentioned above, it’ll be easier if you get a cash advance from your credit card. If your credit limit is high enough and if the house isn’t too expensive, you can consider putting the whole purchase on your card. But, if you have a FHA loan, there is a high probability that this won’t be one of your options to consider. An FHA loan is made to keep homebuyers from mortgage loans they can’t pay for.
Plus, using your credit card for such a huge down payment can be quite risky. Normally, mortgage service companies will not let you pay your mortgage every month with a credit card. However, if you want to insist on using your credit card for a down payment, there are third parties like Venmo. Keep in mind that there are several third parties that will charge you a fee if you want to use them to pay mortgage.
Conclusion
Overall, it’s up to you rather or not if you want to use your credit card to make any type of down payments. Keep in mind that there are several pros and cons that you should be well aware of before you make one. One of the perks is if your card comes with credit card rewards programs, it can help you earn more. However, there are high charges and limitations on your credit card as well.
Normally, there are many other ways to make a down payment that doesn’t involve using your credit card. It’s not highly recommended that you should put loans or down payments on your card. However, there are several places that will allow you to do so at a price. To make things easier, getting a cash advance will be very helpful for you.
