You’ve shopped around for comparison quotes for your auto insurance and you’ve found your match. Now it’s time to get your new coverage bound and pay your premium. Taking a look at your bill, you may be wondering, “can I pay my car insurance with a credit card?”
The short answer is yes, many auto insurers offer the ability to pay for your auto insurance premiums with a credit card. However, there are some pros and some cons to consider before you charge your insurance premium to your card.
The pros and cons of paying your car insurance with a credit card have less to do with your insurer preferring a certain type of payment over another; instead, they have everything to do with your personal finance habits. Using credit cards to pay off your auto insurance can have many benefits, especially if you earn reward points and you pay off that bill in full, or every month. The pitfall, however, is you must have good credit card habits and not let those cards get out of control.
Paying Your Car Insurance By Credit Card
The Benefits of Paying for Car Insurance With a Credit Card
The two most common reasons people use credit cards to pay insurance and other bills are for convenience and to rack up reward points toward travel, cash back, and other benefits.
Whether paying by credit card is right for you depends on your financial discipline. For those who are able to afford this means to pay a bill, there are benefits:
- First, paying your insurance by credit card gets your bill out of the way in one shot, and you don’t have to worry about sending a check each month if you opt for automatic payment. Your bills are paid on time.
- Second, if you have a card that earns travel or reward miles, the credit card payment helps you achieve more points.
- Third, if you pay your entire bill all at once, you’ll likely qualify for a “paid in full” discount with your insurer. By paying in full, you can avoid monthly fees charged by some insurance carriers and this will help reduce your overall insurance costs.
To learn more about this and other discounts you may qualify for, give one of our licensed insurance advisors a call today at (844) 300-3364. Our advisors can help you compare quotes from leading insurance companies in your state to help you find the best coverage and price on your auto insurance.
The Drawbacks of Paying For Car Insurance By Credit Card
There are some downsides to using a credit card to pay for your car insurance. Paying your insurance and other bills by credit card requires discipline in order to make it work effectively. If your approach is not disciplined, credit card bills can spiral out of control. With credit card debt in the US reaching record highs, it may not be the best route for all consumers.
Here are the drawbacks:
- If you fail to pay off your credit card each month, you’ll face credit card finance charges.
- Some credit card companies charge convenience fees when using your credit cards to pay bills.
- You can quickly get into debt if you’re not disciplined.
- Remember that your overall credit card usage is monitored and can be a factor in your credit score. Your credit card utilization tracks how much of your available credit card limits you use each month. Generally speaking, it’s best to keep this utilization under 30 percent.
Your Credit and Car Insurance
In some states, your credit score can be used as a rating factor by auto insurance companies. When using this factor, high credit scores are rewarded, while those with low credit scores are charged more in premiums. However you decide to pay for your auto insurance, be mindful of the effect it can have on your credit, which in turn can affect your rates.
The Bottom Line
The best way to handle your credit card charges is to simply pay them off each month. In other words: Only rack up what you can afford to pay. If your auto insurance premium is an expense you can afford to pay off each month when your credit card bill comes due, there’s little downside to charging that expense (especially if you’ll get points!).
Let us find you the right car insurance coverage and low rates. Compare car insurance quotes with one of our licensed insurance advisors today by calling (844) 300-3364.
See how much we can help improve your coverage and help you you save!
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