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Low Interest and 0% Intro APR

Auto repair credit cards offer sweet promotions, high APRs

You may get a deep discount on a repair, but watch out for deferred interest

Summary

Credit card companies have capitalized on car owners’ need to charge their priciest repairs by offering cards designed specifically for drivers. These cards are often easier to access than general market cards with 0 percent APRs, but beware before opening one.

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If your car broke down this week and you needed to spend hundreds of dollars on repairs, would you have the cash to pay for it?

According to a March 2019 survey by Bankrate, 21 percent of working Americans admit to not having any savings set aside for emergencies, retirement or other big expenses.

Meanwhile, a separate survey commissioned by the real estate firm Clever found that 39 percent of consumers have resorted to paying for car repairs with credit cards.

Credit card companies have capitalized on car owners’ need to charge their priciest repairs by offering cards designed specifically for drivers.

Synchrony Bank, for example, launched the Synchrony Car Care card in 2017, promising to help drivers with promotional financing and a single card for all their car’s expenses, including brake and tire purchases, repairs and regular maintenance.

Some auto dealers and repair shops also offer store credit cards for customers who need help financing a mechanic’s bill.

These types of cards are often easier to access than general market cards with 0 percent APRs – especially if you have less-than-stellar credit. You can typically apply for them in-store, giving you instant access to credit when you’re in a bind.

But beware before opening a card that’s designed exclusively for auto expenses.

See related:  Best credit cards to finance home improvement projects

Car repair cards’ APRs may cause sticker shock

Like many store credit cards, these kinds of cards typically charge exceptionally high interest rates. For example, some car repair cards charge APRs as high as 29.99 percent.

The average credit card APR on new offers, by contrast, is currently 17.67 percent. If you carry a balance, your debt could quickly balloon – especially if you only pay the minimum amount due.

The 0 percent promotional offers that many of these cards offer may also be riskier than they seem: Auto repair cards typically only offer deferred interest financing.

That means if you still have some debt left over at the end of the interest-free promotion, you’ll have to pay interest on your entire purchase — not just your remaining balance.

That said, it might still be worth taking a closer look at what’s available.

Some auto repair cards offer exceptional discounts and rewards in addition to promotional financing, making them an attractive option for drivers who can afford to pay off their purchases before the end of a promotion.

For example, the Sears Mastercard – which offers promotional financing on tires and auto-related purchases – awards up to 5 percent back on gas and 3 percent back on restaurant and grocery purchases.

Meanwhile, the Goodyear credit card offers substantial rebates on new tires and installation services, a regular $5 discount on oil changes and free tire rotation services. The APRs on these cards are still high, though; so if you think you’ll have to carry a long-term balance, the cards probably aren’t worth it.

Here’s a closer look at some of the auto repair credit cards on the market:

Synchrony Car Care credit card

APR: 29.99 percent

Promotional offer: Deferred interest financing for purchases of $199 or more: No interest if you pay off your purchase in full within six months. Otherwise, you’ll be charged 29.99 percent on the full balance, starting with your first purchase.

Card rewards: None

Pros: Can be used at a wide variety of auto shops, such as Midas, Pep Boys and smaller auto shops. Synchrony announced on March 18 it has significantly expanded its network of partner mechanics and auto stores that accept the Car Care credit card. According to Synchrony, 500,000 locations now accept the card for a variety of car-related expenses, including gas and car wash purchases and parking fees. You’ll also be able to check your FICO score by logging into your account.

Cons: The promotional period is short, so you won’t have much time to pay off your repairs. The card’s standard APR is also extremely high and its deferred interest financing program is risky – potentially setting you up for a huge bill if you run out of time and fail to pay off the card in full by the end of the promotion.

Sears Mastercard

APR: 9.49 percent to 27.49 percent

Promotional offer: Deferred interest financing for purchases of $100 to $399 or more: No interest if you pay off your purchase in full within six months to 12 months, depending on the promotional offer you choose. You may be able to qualify for 12 months of promotional financing if you shop online and spend $100 on an automotive or tire purchase. A year-long promotional financing deal is also available to in-store shoppers who spend more than $399 on tires or automotive purchases.

Card rewards: 5 percent back in rewards points on gas purchases, 3 percent back on grocery store and restaurant purchases, 2 percent back on Sears and Kmart purchases and 1 percent back on general purchases.

Pros: Low minimum APR and lengthier promotional financing period than what’s available through some competitors. Excellent card rewards, including 5 percent back on gas and 3 percent back on groceries and restaurants.

Cons: The card’s maximum APR is high and its deferred interest financing promotion is risky.

Goodyear Credit Card

APR: 30.74 percent

Promotional offer: Deferred interest financing for purchases of $250 or more: No interest if you pay off your purchase in full within six months.

Card rewards: None

Pros: A variety of great discounts and perks, including substantial rebates on tires and services; a $5 discount on oil changes and free tire rotation.

Cons: The promotional period is short, so you won’t have much time to pay off your repairs. The card’s APR is also exceptionally high and its deferred interest financing promotion is risky.

Firestone credit card

APR: 28.8 percent

Promotional offer: Deferred interest financing for purchases of $149 or more: No interest if you pay off your purchase in full within six months.

Card rewards: None

Pros: You’ll get access to exclusive monthly discounts and promotions. Card can be used at more than 1,700 Firestone locations.

Cons: The promotional period on this store card is short and its standard APR is high. Its deferred interest financing program is also risky.

AutoPass for Tire and Service Centers

APR: 28.8 percent

Promotional offer: Deferred interest financing for purchases of $149 or more: No interest if you pay off your purchase in full within six months.

Card rewards: None

Pros: You can use the card at a variety of smaller automotive shops, such as the Automotive Recalibration Center in Tucson, Arizona; Dave’s Tire in West Fargo, North Dakota; and the Independence Car Care Center in Rochester, New York.

Cons: The promotional period on this store card is short and its standard APR is high. Its deferred interest financing program is also risky.

See related: 2018 Retail Store Card Survey: Beware 30 percent APRs, ‘special’ financing

Bottom line

Whatever you do, don’t carry a balance on one of these cards – unless you’re absolutely certain you’ll be able to pay off your car repairs before the end of the promotional period.

Promotional financing can help you spread out your payments over time; but if you have strong enough credit to qualify, you’re better off either charging your repairs to a general market card with a lengthy 0 percent APR promotion, or transferring your car repair balance to a 0 percent balance transfer card. Many give cardholders up to 15 months or more to pay off a new or transferred balance and only charge interest on the balance that’s left over after the end of the promotion.

Although you may be able to get exclusive deals and special financing through a car repair credit card, be sure to read the fine print before you sign up.

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Credit Card Rate Report Updated: July 17th, 2019
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