It is so easy today to pay all of our bills with a credit card. Couple this with the nice rewards we can receive from the active use of our credit cards. By using our credit cards we can receive free flights, cash back, gift cards and many other creative prizes. When paying our car insurance bills is it best to use a credit card? We will take a look at the key things to keep in mind when decided how to pay your policy.
Credit Card Fees are charged
It may not always be transparent but car insurance companies will charge more if you pay by a credit card. It will vary how much is charged as each insurer will have different policies on how much they charge. A good way to measure the benefit of using your credit charge is add up the fees you will incur over the course of your policy. For example, if your new insurer will change a fee of $5 per month and you end up paying monthly, the opportunity cost of using a credit card will be $30 for a 6 month policy. Ask your insurer what their fees are, or visit our no down payment page to get an overview on the fees typically charged for credit cards. Understanding your cost will make it easier to compare the benefits or awards you will see by paying with a credit card.
The Cost of Using a Credit Charge
A good point that should resonate is the cost involved in using a credit card. Car insurance companies choose to pay back the cost of credit card fees in most cases. With this, it is better in most situations to pay from your bank account as cash payment doesn’t incur any fees. This can also apply to other situations where you are making payments. It could apply to utility bills or to other large purchases you make with your credit card. Check with who you are purchasing the item from to see if there are advantages in paying with cash. Having a sense as to who ends up paying fees with credit card usage will be a big step to saving you money.
Should I Pay Attention to My Credit Score
Another common question using our credit card brings forward is the impact credit will have on my insurance bill. The most important point to remember is the answer will vary. A car owner in Arizona may see a different impact than a driver in New Jersey. This stems from regulation on credit being done at the state level. To learn more about this visit our auto insurance credit overview page. A good point to keep in mind is that good credit will only help you discover low pricing on car insurance.