NEED MONEY BEFORE PAYDAY? GET UP TO $500
Technically yes, but usually only for part of the price. Most dealers won't accept a credit card for the full purchase, because the processing fees on a transaction that size would cost them far more than on a typical sale.
Many dealers will let you put a deposit or down payment on a card, with the rest paid by financing, debit, or a bank draft. Covering the rest with a cash advance is possible too, but it's one of the most expensive ways to borrow.
KOHO Credit Builder
KOHO Credit Builder is designed to help Canadians establish or build their credit history through consistent monthly payments, without relying on a traditional credit card.
With KOHO Credit Builder, you can:
- +74 points average credit score increase seen using our credit building tools*
- Get approved without a hard credit check or minimum deposit
- Pay no interest on the line of credit
- Track your credit score and credit report directly in the KOHO app
- Build your credit history with monthly payments reported to the credit bureaus
Why Most Dealers Won't Take a Full Payment by Card
Card networks charge merchants a percentage of every transaction. On a small purchase, that fee is minor. On a car costing tens of thousands of dollars, it adds up to a real cost the dealer has to absorb or build into your price.
Most dealers avoid this by capping how much of the purchase, if any, can go on a card.
Your own credit limit is often a separate obstacle. Most personal credit cards have limits well below the price of a car, so paying for the whole thing this way usually isn't possible even if a dealer agreed to it.
What You Can Usually Put on a Card
The deposit or down payment is the part dealers are most willing to accept by card, since it's a smaller amount.
If you can pay that charge off right away rather than carrying a balance, this is also where a card can work in your favour: you collect any rewards or cash back on the deposit at no extra cost.
Policies vary by dealer, so confirm what they'll accept and whether there's a cap before you count on this.
Using a Cash Advance to Cover the Rest
If you're thinking about paying for more of the car by taking a cash advance against your card, know what that actually costs.
A cash advance starts charging interest immediately. There's no grace period the way there is on a regular purchase.
How Either Approach Affects Your Credit
Charging even a deposit can spike your credit utilization if it's large relative to your limit, since that ratio is based on your card balance versus your total limit at any given time.
A dedicated car loan doesn't carry this same risk. It's an installment loan, not revolving credit, so it isn't measured against a credit limit the way a card balance is.
Paying off a card charge quickly minimizes how long that spike shows up on your report.
When Paying by Card Actually Makes Sense
Putting part of a car purchase on a card works best in narrow situations:
- You're paying a deposit you can pay off in full right away, purely to collect rewards or cash back.
- You're buying a low-cost used car that fits comfortably within your limit, and you can clear the balance immediately without carrying interest.
Outside of those cases, the cost usually outweighs any convenience.
A Lower-Cost Way to Finance the Rest
For the bulk of the purchase, dealer financing, a dedicated car loan, or a line of credit will almost always cost less than a credit card cash advance.
*Based on users with a starting score of 450 or under and who used all of our credit building tools (i.e. Credit Building, Secured Credit Building) for 12+ months with on time payments. Credit building tools we offer are not a credit repair tool and does not guarantee an improvement in credit score. Credit scores are based on complex models involving a variety of factors. Consistent on-time payments help improve scores and missed or late payments may cause credit scores to decrease. Outcomes may vary among users.