Most major car insurance companies accept credit cards as a form of payment. While this is not the ideal way to pay your monthly premiums, there are times when it makes sense to use a credit card to pay for car insurance.
When Does it Make Sense to Pay for Car Insurance with a Credit Card?
Car Rental – If you rent a car and you don’t have your own car insurance; it may make sense to pay with a credit card. This is because your credit card company may provide some additional car insurance coverage on the rental.
Reward Points – Everyone wants to maximize their credit card points in order to gain rewards. As long as you are paying your credit card off every month, and not paying interest on your car insurance premiums, this could be a good way to rack up points.
Expense Tracking – If you use your credit card to pay for insurance, you may find it easier to track your expenses. If all of your bills are in one place, on your credit card, you can easily use your statements to track and categorize your expenses, all from one source.
Be Careful Though
If you are using a credit card to pay your auto insurance premiums, be sure you are paying it off every month. While this can be a way to get more time to pay, you don’t want to be paying interest on your car insurance. Should you fall behind, you’ll then start having to pay extra fees on your credit card. In addition, you are only adding to your debt which can have a negative effect on your credit score.
How Do You Pay Your Car Insurance with a Credit Card?
Even if you don’t have a computer and internet at home, you can pay for your car insurance with a credit card.
Most major auto insurance carriers offer several ways to make your payments, including:
- From their website
- From their mobile app
- Over the telephone
One thing to watch out for is that your insurance company might tack on an extra fee for paying your monthly premium by credit card but may waive the fee if you pay the entire year’s premium at one time. If you pay your entire premium at once, you may also see other discounts so this may be a good option.
Don’t forget our earlier warning though, if you are sure to pay off your credit card balance in full and don’t incur any late fees, then paying your car insurance premiums using your credit card may be the right choice for you.
Before you pay by credit card though, make sure to shop around and compare rates from several insurance companies. InsuranceWins makes it easy. Just fill out our form with some basic information and see how much you can save for the coverage you need.
