Can You Pay a Car Lease With a Credit Card?

Most leasing companies won't take a credit card for a monthly payment. The ones that do usually add a convenience fee, and the workarounds cost more than they look: a third-party bill-pay service runs about 3%, and a cash advance starts charging interest the day you take it. On a $450 lease payment, that's roughly $13 on top of your bill. A cash advance on the same amount can cost $13 to $25 in fees before a single day of interest.

Can you pay a car lease with a credit card?

It depends on whether your leasing company accepts credit cards. Check payment options through your lease payment portal or app, or call the number on your statement. Ally Auto, for example, takes payments from a checking or savings account or a debit card but not a credit card, routing debit payments through a third party that charges $3.75 for each transaction.

If your leasing company does take cards, expect a convenience fee on top of the payment. Ask what it is before you pay it.

Why most leasing companies don’t accept credit cards

Credit card issuers charge merchant fees to process credit cards that range from fixed percentages running as high as 3.5% plus fees of 30 cents to 50 cents per transaction. In most states, it's legal to pass along these charges to customers at the time of sale, but many companies choose to avoid processing fees altogether by simply not accepting cards.

You may be able to use a third-party service to pay your car lease if your lender or dealership doesn't accept card payments directly. Here too, you're typically responsible for convenience or transaction fees that range from flat rates to 2% or 3% of the transaction.

If your leasing company won't take a card

Two workarounds can help you avoid missing a payment, each with different costs.

Third-party payment services

Third-party payment services like Plastiq or Melio allow you to pay bills with a credit card. You pay the service with your credit card, and the service sends the payment to your leasing company by check or bank transfer.

Plastiq's fee is 2.99%, or about $13 on a $450 payment, while Melio charges 2.9%. Depending on your card and the service, you may also pay a card network fee of 0.5%. Processing times can take a day or two, so plan ahead to avoid missing your payment.

Money orders and cashier's checks

It's harder to find a company that accepts credit cards for money orders or cashier's checks. The U.S. Postal Service tells you to bring cash or a debit card, and says you can't pay with a credit card. Walmart and most retailers are the same, and Western Union and 7-Eleven no longer allow it. Banks issue cashier's checks against money already in your account.

Most issuers treat the purchase of money orders and cashier's checks as a cash advance, which is a type of short-term loan that borrows against your credit limit. These transactions get expensive quickly, offering no grace period on interest, which means interest starts accruing from the day you take the advance, often at higher APRs than everyday purchases. Most cards also charge upfront fees of 3% to 5% of the amount advanced.

Read more >> How Credit Utilization Affects Your Credit Score

If the payment itself is the problem

Before reaching for your card, these three moves cost less and can provide breathing room to avoid missed payments or repossession.

Ask the leasing company for an extension

Call before the due date and ask what they can do. Many lenders have a process for deferring a payment or moving the due date, and it costs nothing. This is the one option that doesn't involve anybody else.

Borrow from family or a friend

A $450 lease payment through a bill-pay service costs about $13 in fees plus whatever interest you carry on the card. That same $450 from someone you know often comes with no fee, no interest, and no card balance sitting on your credit report afterward.

It also doesn't lock you into a due date set by a bank. If you need an extra two weeks, that's a conversation rather than a late fee.

Talk to a nonprofit counselor

If the payment is hard to cover this month and next month looks the same, that's worth working through with someone. Consider speaking with a financial advisor, credit counselor or other professional for guidance specific to your situation.

The National Foundation for Credit Counseling offers free or low-cost counseling at 800-388-2227.

Read more >> What Happens if You Miss a Car Payment?

What it costs beyond the fee

Using a credit card to pay your car lease affects more than just your budget. The payment sits on your card until you clear it, which raises how much available credit you're using. Amounts owed makes up 30% of your FICO Score, affecting how future lenders gauge risk in taking you on as a borrower.

A card balance also adds a minimum payment of its own on top of the lease payment. Both show up when someone calculates your debt-to-income ratio on a future application.

If you clear the card that month, you paid a fee. If you don't, you're paying card interest on a car payment, and next month's payment is still due.

Read more >> What Is a Good Debt-to-Income Ratio?

Bottom line

Paying a lease with a credit card is possible in some cases, but it's an expensive option. Budget about 3% through a third-party service. Treat a cash advance as the last option, because the fee lands immediately and so does the interest. In a tight month, some people find it's worth the fee to avoid a missed payment. Month after month, it turns a fixed payment into a revolving balance at card rates and pushes up the balances lenders weigh most heavily.

Charging a recurring payment adds to your minimum monthly obligations, raising your debt-to-income ratio, which isn't on your credit report but on any application where a lender runs the numbers.

A card becomes the fallback when cheaper credit isn't available yet. If your credit history is part of what's limiting your options, Kikoff's Credit Account reports your on-time payments to all three credit bureaus, with no hard credit check and plans starting at $5 a month.