Paying off a car with a credit card

[ClaireF]

We have just arranged to buy a new car. We were going to buy outright but buying with a loan arranged by the garage gave us a better deal. We have been told we can pay off straight away. My question is whether I could use my barclays card either directly or via curve. I would then clear the balance straight away. I don’t want to do anything that jeopardises the card but if it is OK then good way to give my avios a boost and hit the upgrade voucher. Thanks

[Anna]

Using the card per se won’t be an issue, as longer as the lender accepts it.

[ClaireF]

Thanks Anna. I will have a go to see if this works.

[PJJ]

I have been considering changing to a new Toyota or Lexus and got in touch by email with both their own Finance Dept (probably the same) and asked about paying with Credit Card. They didn’t accept Amex but would take the monthly payment and final PSP payment by credit card.

[baec_newbie]

I’d do a small test payment first, if the lender allows that, to check whether it’s treated as a cash advance or equivalent, as you might expect. If it is, then it’s a waste of time as you’ll earn no Avios and simply rack up fees and interest.

If it’s treated as a purchase, then you still need to be wary of the fact that Barclays might decide they don’t like you using the card this way and therefore they could close your account. I’d make your decision in the knowledge that this is a distinct possibility; indeed this kind of thing has happened many times before when there’s been ‘loopholes’ on other cards.

[NorthernLass]

I used the avios BC for a £6k balloon payment (split with Virgin) last year and haven’t had any issues with either card because of it. The finance company in that instance was Santander. Also used a couple of different MCs to pay the monthly payments for 3 years, again without charges or issues.

[ClaireF]

Thanks for the replies. I am waiting for the finance company details so don’t know which company it will be with. I can then check to see which cards they accept. I have an igh black card and barclays as well as ba premium but I don’t want to risk loosing any of them. I suppose I could also check with the card provider first if there was any issue.

[BlueLabel]

I’ve been making overpayments for our Skoda with VW financial services using my Barclays Avios card directly. Via Curve didn’t work.

[Reney]

ClaireF wrote:

Thanks for the replies. I am waiting for the finance company details so don’t know which company it will be with. I can then check to see which cards they accept. I have an igh black card and barclays as well as ba premium but I don’t want to risk loosing any of them. I suppose I could also check with the card provider first if there was any issue.

The card provider customer service either probably won’t know or be allow to tell you whether they like it. Or they might say it is fine without being sure what algorithm looks for and if you will trip it. If you look at the history of people who gets shut down across providers, the consistent point is that the card provider do not provide precise reason, if lucky a general idea that allows you to guess. By that point it is too late. I’m not advocating either way just saying calling to ask may not yield what you hope.

[NorthernLass]

Over the past 5 years I’ve used Amex, IHG, Barclaycard (Hilton and avios) and Virgin MC to pay car finance (lease and loan) payments to various different companies, the only one there has been an issue with is (obviously) IHG, though there’s no indication that these kind of payments caused the closure of that card! Creation do tend to levy charges on financial-type payments so if you did use that card you should keep a very close eye on your account afterwards and pay the whole balance off immediately if you see any.

[JDB]

@NL for reference, paying off a charge that a card provider deems a cash type transaction will reduce the interest payable but not remove the cash advance fee which are usually in the range of 3-5% being much more widely applied now. People here have also mentioned that if paying by Curve, even using GBIT to move the charge to another card doesn’t cancel the cash advance fee which remains payable.

[NorthernLass]

Yes – I’ve not personally had a cash advance fee on any of these cards so far – of course I check my statements every month for anything I’m not expecting to be there so would hopefully only make such a mistake once! I’m reluctant to use Curve in any situation where I might require any kind of consumer protection so have no experience of that, but you I’ve also seen people here mention these charges.