Credit Cards Make Car Insurance Cheaper

Using a credit card for car insurance payments can lower your insurance rates. Companies may offer discounts for automatic withdrawal on credit cards and for using your credit card rewards programs.

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UPDATED: Apr 3, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Apr 3, 2022Fact Checked

Here's what you need to know...

  • Often, if you sign up for automatic withdrawal for your insurance premium, you will receive a discount
  • Many credit card companies team up with car insurance providers to offer extra incentives
  • Look into using your credit card to pay for insurance to receive cash back deals and savings on payments

Many people don’t know that by using your credit card, car insurance can be cheaper. In addition to getting a cheaper rate by using your credit card, there are many other ways to reduce your car insurance costs as well.

To find cheap car insurance rates from multiple providers, enter your zip code above!

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:

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.

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2. Cash Back Options

By using your credit card, car insurance can be cheaper if you use your credit card’s cash back or reward program.

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!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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