Best Cash Back Card

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Best Cash Back Card

Best Cash Back Card
October
3

An expensive auto of a famous make and your own house are the first major purchases in your life. The banking system provides a variety of methods to finance these assets. But while, the only affordable way of obtaining a house for most Americans is taking out a mortgage, an auto purchase can be financed through a number of sources. It could be hard cash, a lease, a traditional loan, or a credit card.

The new tendency among wealthy cardholders has been to purchase an auto on a highly lucrative cash back or point rewards plastic, a strategy that has its evident advantages and hidden traps. If the idea of using a high limit card with instant approval to obtain a car is pressing more with each day, there are some important tips to know before you undertake the venture.

First, you should be able to afford making a substantial down payment on the new car. If not, you'll end up owing much more than the car is really worth. Your new vehicle will depreciate in a number of months but you'll still keep paying on it long after. Second, you would need a savings account which will support you in case of significant monthly income decrease or job loss.

If the down payment and additional savings are not a problem for you, then a low interest or 0% APR rewards credit card may come in handy. Research has revealed that cash back rebates are more popular than any other reward programs because savvy car buyers may use that extra money for investment or auto maintenance purposes. If you buy, say a $ 40,000 auto, the 5% of cash rebate earnings will be $2,000, enough to add to your comprehensive car insurance premium.

So, the rewards are the advantage that makes you choose a bank card instead of a loan. The other evident benefit is the introductory period offering you 0% APR on purchases. Compared with a traditional fixed-rate loan, it implies great savings. Given that some intro rates may last up to 15 months, you may pay most of your loan interest free. Anyway, you are recommended to pay much more than the minimum payments to reduce your principle as much as you can. Remember, after the introductory period, you'll be charged a regular APR, which size depends on the total debt outstanding. You might consider a balance transfer in this case but it involves additional spending, too. Also, the lower monthly payments will keep you owing to the bank for a long time and may play against you once you decide to sell the car.

Now, as to the pitfalls of using a plastic card for a vehicle purchase. According to most of the agreements, any issuer reserves the right to change the card terms any time for any reason, no matter if you're current or not on your monthly bills. It's a different thing with a loan. Though a loan generally charges a higher APR, the lender cannot change the terms of the loan in cases other than defaults. So, you are more secure with a traditional loan.

Disappointment may be caused by the price of the auto, which might be higher than the cash price. Keep in mind the transaction fees a dealer is charged by your bank for accepting the card as a payment.

If the advantages outweigh the pitfalls, go ahead for an application of 0% cash back card to finance a new car. If not, think to apply for a loan alternative.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Credit Card Tips For Holiday Shopping 2017

Credit Card Tips For Holiday Shopping 2017

Posted: November 27, 2017

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading
How to Earn on Black Friday Deals in 2017

How to Earn on Black Friday Deals in 2017

Posted: November 23, 2017

Black Friday is around the corner! Ready, steady, go! But before you go on a shopping spree to catch the jaw-dropping deals and discounts, make sure you maximize them. Did you know that you can not only save on Black Friday, but also earn? ... Continue reading
Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 20, 2017

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading