Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Sep 29, 2021

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Just the Basics

  • Credit card payments are usually fast and effective
  • Be careful to avoid extra credit fees and debt if you pay for car insurance with a credit card
  • Most major car insurance providers accept credit card payments

These days, most national car insurance companies accept credit cards as a form of payment. But is it bad to pay for car insurance with a credit card?

Below, discover how to reduce the cost of car insurance by paying for your car insurance quotes with a credit card. You can potentially earn more reward points, plus it gives you more time to make your payments.

But remember to keep an eye on your credit score and avoid taking on debts you cannot afford.

After learning the pros and cons of paying your car insurance bill with a credit card, enter your ZIP code into our free tool above to compare quotes from the best companies near you.

Is it bad to pay for car insurance with a credit card?

Paying for car insurance with a credit card is not bad, as it benefits both the driver and the insurance provider.

Take a look at some of the pros to paying for car insurance with a credit card:

  • Reward points: If you pay your credit card balance on time each month, you can earn reward points on money you would have spent anyway
  • Convenience: You can set up automatic payments using a credit card, so you’ll never miss your due date
  • Time: Credit card payments go through immediately. Since processing times are so fast, you can pay on your due date

Sometimes, you can even secure more affordable car insurance with a credit card.

For example, you can qualify more easily for some standard car insurance discounts, including:

  • Automatic payments discounts
  • Paid-in-full discounts
  • Paperless billing discounts

While insurance payment credit card offers can be great, there are, unfortunately, some cons to be aware of.

For example, some companies charge monthly service fees if you use a debit or credit card. Usually, these are 1.5% to 4% of the payment amount.

But sometimes, the cost is waived if you pay for your entire policy up front in one lump sum.

Also, it’s easy to fall into debt if you rely too heavily on credit card payments. So following a budget is essential.

According to the Federal Reserve, the mean credit card debt for families in 2019 was $6,300.

If you’re already in debt, consider managing your finances before using a credit card for insurance payments.

If your monthly spending is too close to your credit limit each month, it negatively impacts your credit score.

Known as your credit utilization ratio, experts recommend keeping it around 30% each month to avoid harming your credit score.

There are many factors that affect the price of car insurance, like your age, driving record, and ZIP code. But in some states, a poor credit score leads to higher insurance premiums.

Finally, if you don’t pay your credit card bill on time, it gains interest. Credit card interest rates are often very high.

So if it’s not paid on time, you’re essentially paying more for car insurance than if you weren’t using a credit card in the first place.

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How do you pay for car insurance with a credit card?

Almost all major car insurance companies allow you to pay for car insurance using a credit card, bank transfer, or money order. Most also give you a few options for how to submit those payments.

Usually, you can quickly pay your car insurance company with a credit card in your member portal.

You can also call your insurer directly and pay securely over the phone. Or, you can use your provider’s website or mobile app.

To protect your identity, never give your credit card information out through text messages or email.

Your provider will never ask for private information that way, so be wary of messages implying otherwise.

The best credit card to pay car insurance rates depends on your unique situation, but some credit card companies also offer car insurance coverage on rental vehicles.

Take a look at a list of credit cards that offer rental car protection to help you pick your best credit card to pay auto insurance premiums:

  • American Express Delta SkyMiles
  • American Express Green, Gold, and Platinum
  • American Express Hilton Honors and Starwood Preferred
  • Capital One Visa Platinum
  • Chase Amazon Rewards Visa Signature
  • Chase Hyatt and World of Hyatt
  • Chase Sapphire Preferred and Reserve
  • Chase United Explorer and United MileagePlus
  • Mastercard

Besides monthly payments, you can also use your credit card to pay your deductibles for the different types of car insurance coverages, like collision and comprehensive policies.

You either pay on the phone with your insurer or in person with your card at the mechanic shop.

Is it bad to pay for car insurance with a credit card? The Bottom Line

Typically, it’s not a bad idea to pay your car insurance with a credit card each month. You might qualify for additional discounts, and you can rest easy knowing you’ll never miss a payment.

However, you should double-check that your provider doesn’t charge processing fees for using a card.

Also, always make your credit card payments on time each month to avoid interest charges.

Finally, verify that your credit utilization ratio is under 30%. If adding car insurance to your monthly bill pushes you over that amount, it might harm you rather than save you money.

Now that you know you can buy car insurance with a credit card, compare quotes from the best providers near you by entering your ZIP code into our free rate tool below.