When buying a private-party car, credit cards are a bad way to transfer funds. Most private sellers can’t accept credit cards, and the fees and interest rates aren’t worth it.
We have a better solution that’s as easy as swiping your card but without the high fees.
Credit cards work well at the grocery store but not for peer-to-peer transactions.
Even if you and the seller have the means and the patience to pull off a credit card transaction, you’ve only overcome one of many more credit card payment disadvantages.
You’ll need to use an intermediary payment processor to do a peer-to-peer credit card transaction.
Most processors, such as Stripe, charge around 3% of a transaction. That might not sound like much, but let’s crunch the numbers. Buying a 2019 Ford F-150 for $30,000? If you pay via Stripe, here’s how it works out:
If you’re the one pushing to pay via credit card, don’t expect the seller to eat almost a grand on the deal. You’ll be covering the fees.
Most credit cards have daily spending limits between $5k and $10k. For an old beater, you might be able to finish the deal with a single transaction, but for a $50k Land Cruiser, you’ll be in trouble.
If you want to use one card, you need to make multiple payments over several days or weeks, paying off the balance between transactions. If you want to use multiple cards, you might face unsynchronized processing times, delays, and holds. What will you do if you pay for three-quarters of the car and your last transaction is declined?
Most sellers want to get paid quickly. Overly complex or lengthy payment processes may turn them off or rightfully cause suspicion.
This is where DealNow shines. We provide you with the tools to pay quickly, securely, and without limits. No lengthy verifications or processing delays, just smooth high-dollar transactions.
If you don’t have the savings to pay for a car, credit cards are a terrible financing choice. Credit cards are far more expensive than traditional auto financing:
On a $20,000 car with a 5-year term, you could pay over $10,000 more in interest using a credit card than with a traditional auto loan.
You will probably max one or more credit cards out to pay for a car. If you don’t pay the balance within a month or two, your credit score might take a hit. A credit utilization of 20–30% is optimal; this utilization pattern improves your credit score over time.
If you use 60% or more of your credit and don’t quickly pay it down, high utilization will slowly degrade your credit score. This affects your eligibility for other credit cards, loans, and mortgages. If you need financing to pay for a car, use a bank-issued car loan or a dealer loan to secure a better interest rate and avoid damaging your credit.
Credit cards have a problem that plagues all payment methods: a trust problem. The seller doesn’t want to sign over the title and release the car until they get paid, and the buyer doesn’t want to give up the money until they get the title and the car.
No one wants to end up holding the short end of the stick. While this isn’t the most likely scenario, it’s not worth the risk when exchanging large amounts of money.
Here are two common solutions people have used to overcome it:
A bill of sale is the much cheaper and quicker solution. Both parties can print a copy from either their state DMV website or using a generic template (also legally valid).
But printed bills of sale still face a couple of fringe risks. If the buyer is using a fake ID or alias, the seller won’t receive legal protection in the event payment falls through. If the buyer is a truly bad actor, they might sign the bill of sale, receive payment or receive the vehicle, and physically take the car, payment, and bills of sale and leave.
We have a digital solution to the trust issue that lets you skip the costly escrow service and the risk of paper bills of sale.
Forget the credit card hassle. DealNow brings you the speed of a card swipe without percentage-based processing fees. No extra equipment needed—just fast, secure transactions at your fingertips.
Here’s why DealNow is your best bet for buying a car:
Financing a car purchase can be a smart move if done correctly. Unlike a credit card, auto financing offers much more favorable terms.
Auto loans from banks, credit unions, or dealerships usually have interest rates ranging from 3% to 10% APR, depending on your credit score and current rates. Credit card rates, in contrast, are often in the 20–30% range or even higher.
Financing a $30,000 Mazda3 at 5% APR for 5 years (60 months) would result in about $3,968 in interest charges. Your total repayment cost would be $33,968—about 13% more than the purchase price. Not as great as zero interest—which you get when you pay for a car upfront—but a lot better than the $20k–$30k you’d pay in interest if you put that same car on a credit card and paid it off over five years.
You can use your American Express card to buy a car, but it’s rarely a good idea.
Instead of using Amex, try more buyer-friendly options such as DealNow, which offers secure, instant payments without the drawbacks of credit cards.
While it’s possible to buy a money order with a credit card in some places, it’s generally not recommended.
If you need a money order, it’s usually best to pay with cash or a debit card. For car purchases, try using a secure, purpose-built platform such as DealNow instead of relying on money orders or credit cards.
The average US credit card interest rate is about 25%. This holds across most major issuing companies.
Credit cards issued through small banks and credit unions tend to have the best interest rates, at about 10–20%.
DealNow is the easiest way to close your own vehicle deal, anytime. It’s the safe and simple way to avoid fraud, sign documents, and instantly transact, all in one app.
