Can I Purchase Car With Credit Card?

Yes, but usually only partially.

Paying the full car price with a credit card is rare. Limits show up fast.

Why buying a car with a credit card is complicated

Cars are high-value purchases.

Credit cards have:

• Spending limits
• Daily transaction caps
• Bank risk controls

Most credit cards simply don’t allow transactions running into several lakhs.

That’s the first barrier.

How credit cards are actually used in car purchases

In real life, credit cards are used for:

• Booking amount
• Down payment (partial)
• Accessories or add-ons

The remaining amount is usually paid via:

• Bank transfer
• Cheque
• Car loan

So yes, credit cards help. Just not end-to-end.

Why dealers limit credit card payments

This isn’t random.

Dealers face:

• High merchant charges
• Settlement delays
• Risk of chargebacks

Credit card fees can be 1.5%–3%.

On a car, that’s a big number.

So dealers cap card usage or block it entirely.

Do banks allow full car purchase on credit card?

Usually no.

Banks often:

• Block high-value vehicle transactions
• Restrict EMIs for car purchases
• Exclude car spends from rewards

Even if the card limit is high, approval may fail.

Are rewards earned on car purchases?

Often no.

Many banks exclude:

• Vehicle purchases
• Large-ticket transactions
• Dealer payments

Even if the transaction succeeds, reward points may not show up.

Card terms decide this.

Can a car be bought on EMI using a credit card?

Sometimes, but not commonly.

Dealers may offer:

• EMI on accessories
• EMI on partial payments

Full car EMIs usually happen through car loans, not cards.

Interest on card EMIs is usually higher too.

Risks of using a credit card for car purchase

Quick tip. These risks matter:

• High utilisation affects credit score
• Large bills increase repayment pressure
• Interest applies if not paid fully

Cars are long-term assets.

Credit cards are short-term tools.

Mismatch causes trouble.

When using a credit card for a car makes sense

In limited situations:

• Paying booking amount
• Short-term liquidity need
• Full bill can be cleared immediately

Anything beyond that needs caution.

When it’s better to avoid

Avoid credit cards if:

• Full car price is planned
• EMI is required
• Credit limit will max out

Car loans are designed for this. Cards are not.

FAQ

Can full car price be paid using a credit card?

Usually no. Most dealers don’t allow it.

Do car purchases earn reward points?

Often no, depending on card rules.

Is car loan better than credit card for buying a car?

Yes, car loans are cheaper and structured.

In short

Cars can be purchased partly using a credit card.

Full payment is rarely allowed.

Loans fit better for big buys.

Still unsure which payment method works best for a car purchase?