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Car insurance can protect you from significant expenses, whether that involves an auto accident or normal wear and tear on the vehicle. An auto insurance policy is also required to legally operate a car, truck, or SUV in most states. Using a credit card to pay for insurance is one option, and below are some advantages and disadvantages of taking this approach. However, making payments on time is always a top priority.
Verify with Your Provider
While most car insurance agencies allow payments via credit card, this isn’t always the case. Agencies will typically display all acceptable payment options on their billing statements and when policyholders pay via telephone or online. The type of credit card an auto insurance company accepts will also depend on the provider, which is something to verify.
Ideally, you should use a credit card that provides product protection to give you more security. You can verify this is an option by speaking with your credit card company before issuing payment.
Boost Your Credit Score
Having a credit card and not using it could lead to a decreased credit score and cause the account to be closed. However, you can use the credit card for bills already in your monthly budget, increasing your credit score.
Using less than ten to fifteen percent of the credit limit available to you may lead to a boost in your credit rating. Therefore, you need to monitor your usage limits to verify your auto insurance payment amount won’t exceed this percentage.
Some credit card agencies offer an increased credit line based on card usage and excellent repayment history. You could also receive additional offers from the same company if the business offers these rewards and initiatives.
Opt for Discounted Services
Some car insurance policyholders may be eligible for special pricing, especially when making yearly payments up front instead of paying by the month. Having the funds available on a credit card can make these discounted services more workable, as you can pay your insurance up front but have a spaced-out repayment plan option from the credit card company. Determine if the discounted car insurance offer is more beneficial compared to making monthly credit card payments that include service fees and interest.
You don’t have to wait months to repay your credit card. Therefore, if you benefit from a discounted auto insurance rate, you could pay off the credit card amount within a month or two, based on your financial abilities and preferences.
Consider Other Payment Options
Besides credit cards, your insurance provider may offer other options, such as debit card payments, checks via postal mail, electronic funds transfers, or online systems such as PayPal. Speak with an auto insurance representative to learn more about the available options so you can plan for the expense accurately and thoroughly, reducing the odds of missed or late payments that could lead to canceled insurance, increased policy amounts, or excessive fees.
If you need advice about the most effective way to pay for your auto insurance, trust Altra Insurance Services to be your guide. We’ll help you choose the insurance coverage that’s right for you so you can enjoy peace of mind. Whether they need auto coverage, homeowners insurance, or high-quality motorcycle insurance, San Diego residents know they can trust us to provide reliable, affordable coverage. Give us a call or request an online quote now.