Using a credit card for purchases or to pay bills is pretty common, but when you use your credit card to pay for your car insurance, your rates may be cheaper.
By being aware of the three main ways that using a credit card can result in cheaper car insurance rates, you can save money on your monthly premiums.
1. Auto Withdrawal
When you purchase a car insurance policy, you are offered three payment options:
- Pay the entire yearly premium in full at the time of purchase
- Make quarterly payments
- Make monthly payments
You can do this through a credit card, debit card, or sending a check to the company.
No matter what time frame you choose to make your payments to the car insurance company, you will be eligible for a cheaper rate if you use your credit card.
By signing up for automatic withdrawal and using your credit card, most insurance companies will give you a discount.
You must sign up for the automatic withdrawal to receive the discount.
The insurance companies are willing to give you a discount when you pay this way because it is more of a guarantee of payment than if they wait for you to send in a check or go online to pay when your bill is due.
It is also more convenient for you. All you have to do is sign up once and your payment will come out when scheduled.
If you need to stop the payment for any reason, you just need to call a few days in advance.
2. Cash Back Options
Many credit card companies have cash back and reward programs that they use as an incentive to get you to buy things with your credit card. If you do this with your car insurance payments, you are putting money back into your pocket.
Of course it is best to pay off your credit card balance every month.
This requires a little self-discipline, but it is a good way to make your premium payment lower.
Be sure to watch for special deals from your credit card company as well. These special deals allow you to earn extra cash back during certain months and seasons. They may also give extra cash back at certain times for paying your bills with the credit card.
3. Covering Extras
Sometimes extras — like roadside assistance or travel discounts — can help stretch your dollar just a little bit further.
There are several credit card companies that partner with car insurance companies to offer things like roadside assistance and special discounts on travel, movies, and more when you use your credit card to pay your car insurance premium.
Although this is not a direct discount on your car insurance premium, it does allow you to save money in other areas.
You can then apply those savings towards your next premium payment. Check with your credit card company to find out what deals and discounts they offer for car insurance payments.
You may be unsure of how to find the car insurance company that is right for you. The best way to do this is to shop around.
Start searching for the best deals in your area. Enter your zip code below for car insurance rates from top companies!