Buying a Car with a Credit Card? Here’s How 4 People Earned Thousands in Points and Miles

Purchasing a car can be financially overwhelming. The excitement of the car itself is often overshadowed by the hassle of paperwork, financing, and long hours at the dealership

But in the mess of negotiating, there’s an opportunity to earn thousands of points and miles on your new ride. Here are some success stories, including my own, of using credit cards to pay for car purchases.

Maximum Charge to a Credit Card When Buying a Car

Typically, car dealerships are reluctant to accept credit cards for car purchases due to transaction fees and the risk of potential disputes. Each time you swipe a credit card, the vendor pays fees to process the payment, typically 1.5% to 3.5% of the purchase.

That means a dealership could pay anywhere between $600 to $1,400 in fees on a $40,000 car purchase. Additionally, they don’t want to deal with the headache of customers potentially disputing the charge if they are unhappy with the car.

For these reasons, dealerships often cap credit card transactions for vehicle purchases at $5,000 — a common number you’ll see in the 4 stories below. However, like many aspects of buying a car, this limit can be negotiable.

My 2020 Honda Insight

I purchased Izzy the Insight a little over a year ago, handling most of the negotiation over the phone before going to the dealership. With preapproval from my credit union already in place, I asked how much I could put on my credit card, and they allowed up to $5,000 for the down payment.

Unfortunately, I wasn’t working toward meeting a minimum spend requirement on a welcome bonus offer. At the time, I was more concerned about saving money rather than maximizing my rewards-earning potential on credit cards. I paid for the car with the Owner’s Rewards Card by M1, which earned 1.5% cash back on the purchase and gave me an easy $75 back in my pocket.

It wasn’t the best credit card to use, but it worked for my needs at the time. For example, a better card would have been The Business Platinum Card^® from American Express, which earns 2x points on eligible business categories and purchases over $5,000 (on up to $2 million per card account per calendar year). According to our points and miles valuations, I would have earned $110 in Membership Rewards points.

While they processed my financing, I was taken to the service department, where I used my card just like any regular purchase. After signing the receipt, I received the keys and drove off with Izzy.

Jessica’s New Truck

Upgraded Points Senior Editor and Content Contributor Jessica Merritt recently bought a truck using the Hilton Honors American Express Surpass^® Card with a $5,000 down payment.

I had planned to get a new card with a large welcome bonus offer or a 0% introductory offer but wanted to apply after I found the right vehicle. However, once I found the truck, I had to act fast and none of the instant issue cards I looked at were appealing. I knew the points I’d earn on my Hilton Surpass card would get me where I need to be for a Hawaii trip, so I went for it.

Jessica Merritt

Jessica earned 15,000 Hilton Honors points for the purchase, which are worth approximately $75. (She also said that a competing dealer would have allowed her to charge $10,000 but with a 2% transaction fee.)

Kristin’s 2020 Hyundai Tucson

My girlfriend Kristin searched for a car for a few months. Before we met, she was already a points and miles nerd, so the language of credit card rewards wasn’t foreign to her. She had her eyes on a used 2020 Hyundai Tucson, and after giving her a few tips, she negotiated it masterfully.

After a trade-in, she owed roughly $17,000 for the car. She had preapproved financing from her credit union, which the dealership agreed to match with their in-house financing. This was helpful as the dealership’s lender could fund the loan immediately.

When they asked for a down payment, she asked how much she could put down on a credit card, and the sales manager said $3,000. I guess that the dealership didn’t want to increase this limit because the car purchase amount was fairly low.

She used her Chase Sapphire Preferred^® Card for the down payment, as she regularly flies with United Airlines and can transfer Chase points at a 1:1 ratio. According to our valuations, those 3,000 Ultimate Rewards points are worth $60.

Gabe’s 2024 Kia Telluride

My friend Gabe Partain had been searching for a new car as his family grows from 3 to 4. He and I have been chatting for a while about the best financing approach. When I told him he could use a credit card to pay for part of the car, he was flabbergasted. He had no idea that was even an option.

He took it one step further. The dealership was cool with $5,000, but he pushed even further, asking for $10,000. The manager got involved, but they approved the ask. He planned on putting $20,000 in cash down, but instead, he put $10,000 down and paid off his card balance immediately.

He used the Chase Sapphire Preferred card to accumulate more Chase Ultimate Rewards points for a future luxury vacation.

Final Thoughts

One of the early lessons my mom taught me is that you won’t get what you don’t ask for. So, next time you make a big purchase, be sure to ask if you can pay with a credit card — it’s an easy way to earn rewards on something you’re already buying, such as a big-ticket item like a car.