When the auto mechanic gives you that dreaded grimace, you know to brace for a pricey car repair.
Unfortunately, car maintenance isn’t cheap. In 2020, the average cost of vehicle maintenance and repairs per household was $825, according to the Bureau of Labor Statistic’s Consumer Expenditure Survey. It’s not starkly different from the previous, and more normal, year in which the average household cost was $822.
The bill might be easier to stomach if you have an emergency fund to cover the cost, but you can lessen the blow to your finances further with the right credit card. If the car repair isn’t urgent and you have the time to apply for a credit card, consider one of these options to save on interest charges or get more value.
Top cards for car repairs
Wells Fargo Active Cash® Card
Our pick for: Introductory offers and rewards
Rewards: Earn an unlimited 2% cash back on all purchases.
Sign-up bonus: Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months.
APR: 0% intro APR on Purchases for 15 months and 0% intro APR on Balance Transfers 15 months from account opening on qualifying balance transfers, and then the ongoing APR of 16.49%, 21.49%, or 26.49% Variable APR.
Why we like it
The Wells Fargo Active Cash® Card can help you finance a car repair and earn rewards in the process. You’ll save on interest charges over a lengthy period with the card’s introductory APR offer. And, once you earn it, the sign-up bonus can offset some of the cost of the repair. The ongoing rewards rate is also decent, and rewards are simple to earn.
Upgrade Triple Cash Rewards Visa®
Our pick for: Elevated rewards
Earn 3% cash back on home, auto and health purchases.
Earn 1% cash back on everything else.
APR: The ongoing APR is 8.99%-29.99%.
Why we like it
The Upgrade Triple Cash Rewards Visa® is friendly to those with average credit (a FICO score of 630 to 689), and it’s one of the few credit cards that offers rewards on car repairs. It earns 3x back on auto purchases, including auto parts, purchases at car dealerships, car washes, auto repairs and towing services. If you have a balance left over, it’s automatically converted into an installment loan with a fixed rate and predictable monthly payments. And, when you need a personal loan, you can request that funds (up to your available credit limit) be sent to your bank account. The loan is also paid in installments over a certain time frame at a fixed interest rate.
Wells Fargo Reflect℠ Card
Our pick for: A 0% introductory APR
APR: 0% intro APR on Purchases for up to 21 months and 0% intro APR on Balance Transfers up to 21 months from account opening on qualifying balance transfers, and then the ongoing APR of 14.49%-26.49% Variable APR.
Why we like it
The Wells Fargo Reflect℠ Card is ideal for financing more expensive repairs that can take a while to pay off. The ultra-long break on interest payments can offer some much needed breathing room. The card doesn’t offer any other incentives, but its interest-free period beats out several cards in its class.
Sam’s Club® Mastercard®
Our pick for: Sam’s Club memberships
5% cash back (on up to $6,000 spent per year, then 1%) at electric vehicle charging stations and eligible gas stations worldwide, including stations at Sam’s Club.
3% back on eligible Sam’s Club purchases.
1% back on all other purchases.
For Sam’s Club Plus members only: Earn an additional 2% back on eligible Sam’s Club purchases. That’s up to 5% back on eligible Sam’s Club purchases when you factor in the rewards earned with the card.
APR: The ongoing APR is 15.90%-23.90%, Variable.
Why we like it
As a Sam’s Club Plus member, the Sam’s Club® Mastercard® can get you 3% cash back on tire and battery services at Sam’s Club locations and up to 5% on products purchased through the retailer, such as tires and oil. Regardless of the membership tier, you’ll also earn a high ongoing rewards rate on gas or EV charging expenses.
Costco Anywhere Visa® Card by Citi
Our pick for: Costco memberships
4% cash back on gas purchases (both at Costco and other gas stations) on up to $7,000 of spending a year, then 1% back.
3% cash back on restaurants and most travel purchases.
2% cash back at Costco and Costco.com.
1% cash back on all other purchases.
APR: The ongoing APR is 16.74% Variable APR.
Why we like it
If you’re a Costco member, the Costco Anywhere Visa® Card by Citi can offer 2% cash back on services performed at a Costco location. At participating service centers, you can earn 1% cash back and combine it with the 15% Costco member discount you’ll get on parts, service and accessories (on up to $500 per visit). The card also gets a high rewards rate on gas purchases once your car is back up and running.
Alternative options for covering a car repair
You might qualify for co-branded credit cards or deferred interest offers that can help with the cost of your car repair. However, these options may not give you as much value or redemption flexibility as the choices listed above.
Co-branded credit cards
A co-branded credit card is issued by a bank in partnership with a retailer. The card may have two logos, one belonging to the credit card issuer and the other to the retailer. You might be able to use a co-branded credit card with the retailer only or anywhere the network (Visa, Mastercard, AmEx or Discover) is accepted, depending on the card.
Some co-branded credit cards offer more flexibility than others, allowing you to earn rewards on everyday purchases or redeem them for options beyond the car dealership. Take the Toyota Rewards Visa® and Lexus Pursuits Visa®, for instance. These options allow you to earn 5 points per dollar spent at the dealership; 2 points on gas, dining and entertainment; and 1 point on everything else. Points redeem for statement credits, travel, eligible goods or services or a new car. Terms apply.
Some co-branded credit cards offer redemptions that can only be used with the brand. The My GM Rewards Card™, for example, only allows rewards to redeem toward the purchase or lease of an eligible vehicle — or use up to $250 worth of points per calendar year on nonvehicle GM purchases, including purchases of car parts and accessories at GM dealerships. Terms apply.
Note, too, if a variety of redemption options are available on a co-branded credit card, sometimes the issuer lessens the value of rewards when you redeem them for options beyond the brand.
Deferred interest offers
When you go to pay for your repair, you might see deferred interest offers available which typically advertise “no interest if paid in full” by a certain date. With these offers, interest accrues in the background and is postponed until the end of the promotional period. If you don’t pay off the balance in full, you’ll have to pay interest charges going back to the original date of the purchase.
While deferred interest offers are risky options, they are also convenient ones. If your options are slim, even a short break on interest charges can be a welcomed offer and a helpful one if you can manage to pay it off within the promotional window.
Credit cards with deferred interest offers typically don’t earn rewards or offer any incentives. After the promotional period ends, the interest rate also tends to run high. For instance, the Synchrony Car Care Credit Card offers six months of no-interest promotional financing on eligible car-related purchases of $199 or more. But after that window closes, the interest rate is 29.99% (as of July 2022). So, if you haven’t paid off your card in full by that time, you have to pay nearly 30% interest on your entire balance retroactively.
It’s a gamble that could catapult you into debt. While you might expect to pay it off, you can’t predict emergencies or setbacks.
Nerdy tip: A deferred interest offer is not the same as a true 0% APR offer that starts charging interest the moment the promotional period ends. Assume you spent $2,000 on a purchase made with a deferred interest offer that advertised “no interest if paid in full in 12 months.” If you have a remaining $50 balance at 13 months, you would pay interest charges on $2,000 with the deferred interest offer. With the true 0% APR offer advertised as “a 0% intro APR for 12 months,” you would pay interest charges only on the $50 after the promotional window expired.
Here are some examples of some other deferred interest promotions you might encounter:
The Midas credit card: Cardholders get six months of no-interest promotional financing on eligible car-related purchases of $199 or more.
Credit First National Association credit cards: This private label credit card bank offers different deferred interest automotive credit cards like the Firestone credit card, AutoPass credit card, Good Guys credit card, among others. To qualify, you’ll have to meet a minimum spending requirement that varies per card.
The Goodyear credit card: This card offers no interest if paid in full within six months on purchases of $250 or more.
The Pep Boys credit card: Cardholders can choose from two financing options: Six months on purchases from $199 to 749.99 and 12 months on purchases of $750 or more.