Buying a Used Car with a Credit Card in Michigan

Here's What You Need to Know

The average FICO in Michigan is 719. Pretty good! Purchasing a used car with a credit card might be an open and shut case for some, especially if you own a card with a hefty credit limit. 💳

But… before you swipe for that dreamy 2008 Ford Ranger with only 120,000 miles, consider the pros and cons of credit cards.

At Pontiac Public Auction in Pontiac, Michigan, we DO NOT accept credit cards, buuuuutttt we thought this was a useful bit of information anyway.

We have a great inventory, regardless, and we DO accept cash, U.S. certified bank check, and wire transfer. Out of over 200 vehicles of all types, even RVs, we are sure to have some wheels you can put to good use.

Pros and Cons of Credit Cards

Credit Card Pros: 🙂

• Convenience: Buying a car with a credit card is convenient. Period. I mean, we all use credit cards. It's a quick and straightforward transaction, saving you time and the hassle of arranging for financing through a bank or credit union. 🏃
• Potential Rewards: Many credit cards offer perks and rewards, such as cashback or travel miles. 💵 
• Consumer Protection: Credit card purchases often come with built-in consumer protection, such as extended warranties or purchase protection. This can provide peace of mind when buying a used car, especially when older cars are often a higher risk purchase due to needed or unexpected maintenance.

Are Auto Auctions a good deal? 🤔

Credit Card Cons: 😞

• Credit Limit: The biggest limitation when buying a car with a credit card is your credit limit. Most cars, even used ones, cost more than the average credit limit, which is in the range of $4,000-$10,000 per card, and Americans have an average of 3-4 credit cards.
• Although, there’s a good chance at an auto auction, that you will pay far less on a car than anywhere else!
• Otherwise, you might not be able to cover the full cost with your card alone. And, buying a $4,000 used car when your limit is $6,000 is not the best idea. High credit utilization can negatively affect your credit score. You want to keep your utilization under 10%.
• Interest Rates: 🚨 This is a very important consideration, especially if you plan to pay off your car over time. Credit cards typically have high-interest rates compared to car loans.
• You can find out the average credit card interest rates easily. They change all the time. Right now they are around 28% (that’s a lot of interest). Carrying a large balance on your card can result in substantial interest charges if you don’t pay it off quickly. 😬
• Car Dealers: Not all car dealerships (or auto auctions, like Pontiac) accept credit cards for vehicle purchases. Maybe we will in the future. It's essential to check beforehand to confirm your payment plan.

Have we mentioned that you can save a lot of money by buying at auction? Even if we have, we’re saying it again! 😆 Here’s an overview of how to buy a car at our public auction lot. 🚗 🏍️ 🚚

Buying a Car with a Credit Card

• Payment Process: If you plan to use a credit card for a car purchase, discuss the payment process with the seller. Some may require you to pay a portion of the purchase price with another method, such as a cashier's check or wire transfer.
• Credit Card Fees: Be aware of any credit card transaction fees. Some dealerships may pass these fees onto you, reducing the benefits of using a card.
• Credit Score Impact: Large credit card transactions can impact your credit utilization ratio, potentially affecting your credit score. Make sure you can manage the increased balance without harming your creditworthiness. Plus, if you refinance the credit card loan after using the card, that might also negatively impact your score.

Michigan has an average of $6,744 in credit card debt. That sounds like a lot, but it’s better than 31 other states. So… go Michigan! On that happy note…

Can you Buy a Car at Auction with a Credit Card?

As we said, not at Pontiac Auto Auction. When browsing an auto auction, look carefully for what payments they accept. And please weigh the pros and cons of a credit card before you use it on a car.

Ultimately, the decision should align with your financial situation and goals, ensuring that you can comfortably handle the purchase without straining your finances.

Whether you are relying on a credit card for your used car purchase or not, check out Pontiac Auto Auction’s inventory of cars, trucks, boats, and more! 🎉

P.S. One thing about auctions, like Pontiac Auto Auction, is that the prices are terrific and are much lower than you can find at a dealership. We also support charities across Michigan through our partner, CARS?