Can you buy a car with a credit card?

Can you buy a car with a credit card?

Buying a car is one of the bigger purchases you’ll make, apart from buying property, so it pays to do your research into the most affordable ways to pay for it.

Typically, most Australians will save up for a car or take out a car loan. The former may require more time and effort, and the latter may incur its own fees and risks. But some Aussies may be wondering if they could put a car loan purchase on plastic.

Here is everything you need to know about potentially paying for a car with your credit card. 

Is it possible to buy a car with a credit card?

Short answer: Yes, if your credit limit and budget allow it. But is it the right financial decision to make? 

There are several things to take into consideration when it comes to using your credit card to make a potentially expensive purchase, including:

  • The risk of growing debt. First and foremost, you need to consider that making an expensive purchase on a credit card that you cannot pay back right away (and that’s earning high interest) is a sure-fire way to quickly accumulate a large debt.
  • The credit limit. Your credit limit may prevent you from purchasing your dream car if it’s lower than the asking price.
  • Can you afford this? Maybe you have a credit limit high enough to purchase a car, but can you afford to budget for the potential repayments?

However, you may be looking at a second-hand car only worth a few grand, have been rejected for a car loan before or know that you have the funds to pay the car back immediately.

In fact, if you had the cash ready to go and wanted to purchase the car via credit card, you may be able to earn major rewards points. Plus, you have the advantage of not having to wait around for car loan pre-approval.

When might buying a car via credit card work?

There are some scenarios where buying a car via credit card may actually be a worthwhile option to consider.

  1. You have the cash ready to go to pay your balance in full by the next statement period;
  2. You’re a points chaser looking to earn major rewards points;
  3. You don’t want to offer up your car as security on a loan;
  4. You cannot get car loan approval (perhaps due to the age of the car, or your own financial situation); and/or
  5. You’ve nabbed a 0 per cent interest rate period on a credit card and want to pay down your debt in this time.

The most important thing to consider is how this potential purchase may factor into your budget. As mentioned before, unless you have the cash at hand, your outstanding balance may be hit with a high interest rate immediately, causing your debt to grow. 

For this scenario to work out, one of the easiest ways to pay off your car via credit card may be to use one with a zero per cent interest introductory period. You’ll need to confirm with the card provider that a purchase this large is allowed, and factor in any fees and ongoing costs that may pop up. 

But paying off a car in an interest-free period on a credit card would, in theory, be more affordable than a car loan charging you interest – as long as you repay the balance in full in that time frame.

Zero per cent interest rate credit cards

When might buying a car via credit card NOT work?

If you don’t have the cash ready to go for your car purchase, or if your card charges a high purchase rate, there are serious risks around using your credit card to buy a car. 

As mentioned earlier, the risk of your debt snowballing out of control is severe if you’re not able to budget for repayments. For example, a minimum credit card repayment amount is around 2 per cent of the balance. If you bought a $20,000 car on your credit card, not even factoring in interest and fees, the minimum repayment for the first statement period would be $400.

Not only will you need to budget for your repayments, it’s worth considering that the purchase rate and any ongoing fees will begin to add up. For example, that same $20,000 car purchase on a credit card charging 16 per cent interest would balloon to $57,197 if you only made minimum repayments. It would also take 42 years and 10 months to pay off (based on ASIC’s MoneySmart credit card calculator).

Further, if you do max out your credit card, not only will you be unable to use it for any other purchases until your balance is paid in full, but you may hurt your credit score. Maxing out your credit limit may negatively impact your credit history, making taking out other financial products like a home loan very difficult.

What are the pros and cons of using a credit card to buy a car?


  • No car loan pre-approval needed
  • Earn major rewards points
  • 0% interest introductory offers make repayments easier
  • Car not used as security on loan


  • Serious risk of debt
  • Interest rate surcharges
  • Maxing credit card hurts credit score
  • Budgeting and cash flow issues

What other car finance options do you have?

There are a range of alternative payment methods you can use to buy a car other than using your credit card, including:

  • Using your savings
  • A car loan
  • Salary sacrificing
  • Redrawing on your home loan

The best option for you will depend on your specific financial situation, savings and budget. If you’ve done the maths on your budget versus potential car repayments on a credit card, and still believe it’s the most affordable way to go about it, then this may be the right choice for you.

If you’re just uncertain about taking out a car loan, it may be worth speaking to a car loan broker. They may be able to give you financial advice around car loans that best suit your finances, as well as options that don’t involve offering up the car as security, if needs be. 

Keep in mind that there are some competitive car loans on the market. Car loan interest rates have, on average, historically been lower than an average credit card rate. A $20,000 loan with an interest rate of 5 per cent is a much more manageable debt than a credit card charging 16 per cent interest.

Low rate car loan options

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Learn more about credit cards

Do you need a credit card to get a loan?

You do not need a credit card to get a loan, but you usually need to have a credit history. Without a credit history, a financial institution cannot assess your ‘credit worthiness’, or your capacity to pay off the loan.

If you don’t have a credit card, your credit history can reflect any record of paying off an asset. Without any credit credit history, you’re limited in the type of loans you can apply for. But you may be able to obtain a secured loan against an asset. For more information on improving your credit score, go here

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

What does ANZ credit card insurance cover?

ANZ offers complimentary insurance on some of its credit cards, which can provide some protection against unforeseeable incidents, like the theft of your card. Depending on the type of credit card you own, you may be eligible for different insurances. For instance, most ANZ credit card customers may qualify for Purchase Protection Insurance and Extended Warranty Insurance. Customers who own premium credit cards may also be eligible for Guaranteed Pricing, Rental Vehicle Excess, International Travel, and so on.

Consider checking your ANZ credit card insurance features listed in the Insurance Policy Information booklet to know which items are covered. Also, while ANZ issued the credit card, they are not the insurer. For this reason, you may need to send your insurance claims - and get your ANZ credit card insurance refund - to the insurance provider.

How can I increase my Bankwest credit card limit?

When you apply for a Bankwest credit card, you get assigned a pre-set credit limit, which will end up being the most that you can spend on your credit card before having to pay it off. Your credit limit is chosen for you and your current financial situation, and you should remember not to overspend, irrespective of the limit, in order to avoid racking up a massive bill.

However, banks and lenders understand that your needs will change, and have made it possible for you to increase your credit card limit, allowing you to get extra cash when you need it most. Moreover, with a higher spending limit, you may be able to get access to certain perks and benefits with your Bankwest credit card.

To increase your Bankwest credit card limit, you can visit any of the bank’s branches or call 13 17 19 and follow the steps outlined.

Current Interest Rate

This is the current interest rate on your existing credit card.

How do I apply for a BOQ credit card limit increase?

If you’re an existing BOQ customer, you can request a BOQ credit card limit increase over a phone call. However, you should remember that owning and using a credit card is a matter of financial responsibility, so it might be worth thinking this decision through. 

When requesting a credit card limit increase, you’ll need to be just as responsible in terms of how much you earn and can set aside to repay the outstanding card balance. A credit card company may approve a credit limit increase only if you can show that you have either the income or the disposable income, which is the amount you have left after all expenses have been paid out.

For this purpose, you may need to submit your latest income documents and bank statements for an increase. You may want to estimate how much you usually have left after deducting your expenses, and then use this amount to try and convince the credit card company. Also, you may prefer to pay off the card balance in full each month and thus avoid paying interest on the card, helping you back up any claims of financial responsibility, as well. 

Remember that you may not be able to apply for a credit card limit increase beyond any limitations on the type of card you own. For instance, if you own a card whose ceiling is $10,000, and your current limit is $5,000, you won't likely be able to apply for a $10,000 credit card limit increase.

How to increase the NAB credit card limit?

If you use your NAB credit card regularly, you could consider requesting a higher credit limit. The good news is that it's fairly easy to do so using either the NAB app or NAB internet banking. 

NAB app: 

Step 1: Download the latest version of the NAB app.

Step 2: Select the ‘My Cards’ menu. 

Step 3: Select the card you want to increase the credit limit for. 

Step 4: Select ‘Usage Controls’ and then click on ‘Change Credit Limit’.

NAB internet banking: 

Step 1: Log into your account. 

Step 2: Choose the ‘My Cards’ menu. 

Step 3: Choose the card for which you want to increase the limit. 

Step 4: Choose ‘Change My Credit Card Limit’.  

If you don’t have the NAB app or cannot access NAB internet banking, you can even visit your local branch or call their contact center. 

Once you’ve applied to increase your NAB credit card limit, you’re likely to be asked for your

  • current employment details  
  • total income, before and after-tax deductions  
  • assets, liabilities, and expenses information

NAB will then assess this information to determine if your current financial situation suits the increased credit limit request, and your application will either be accepted or denied.

However, this process will only work if you’re attempting to increase your personal NAB credit card limit. For a business credit card, you can contact the NAB Corporate & Business Servicing team or speak to your NAB relationship manager. 

Monthly repayment

This is how much you can afford to pay on a monthly basis off your credit card. You can enter any amount you wish; but to make the balance transfer worthwhile the default is $200.

How do I apply for a credit card online?

Increase your credit card limit with Westpac

A credit card can be a useful tool to access extra cash when you need it. Sometimes you may wish to increase your credit card limit for greater financial flexibility. For example, to realize your immediate goals faster, such as planning for an international holiday or making a big purchase.

You can apply to increase your credit limit at any time, and most credit card providers have made it really easy to do so. You can use your online banking portal, the credit card provider’s mobile app, or even the telephone. 

Applying online to increase your credit limit with Westpac is the easiest option if you’ve already activated Westpac Live Online Banking. All you need to do is fill in the required information and then hit ‘submit’ to apply for an increase in your credit card limit.

Most banks will ask for details of your financial situation at the time of applying for a credit increase. This is done to ensure your new limit meets the lender’s criteria. 

You can apply for increasing your credit limit in any of the following ways:

  1. Visiting your nearest Westpac branch
  2. Calling Westpac on 1300 651 089
  3. Logging in on Westpac Live Online Banking

Current Annual Fees

These are the current annual fees on your existing credit card.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch.