Can I Pay My Car Insurance Deductible With a Credit Card?

Last Updated on January 26, 2022

You need to pay a car insurance deductible before your insurer closes your claim. Can you pay your deductible using a credit card? Or are you forced to pay using cash or a debit card?

Today, we’re explaining everything you need to know about payment options for car insurance deductibles, including whether or not you can pay your car insurance deductible with a credit card.

Can I Pay My Car Insurance Deductible With a Credit Card?

Yes, You Should Be Able to Pay Your Deductible with a Credit Card

Most major car insurance companies accept credit cards. You should be able to use your credit card to pay for your insurance premiums and your deductible.

In fact, many people prefer making car insurance payments with a credit card. Credit cards give you added payment flexibility. Many people also earn points or cashback rewards when paying with a credit card.

For all of these reasons, it may be in your best interest to pay your car insurance deductible with a credit card.

How to Pay Your Car Insurance Deductible

Insurance companies handle deductibles in different ways.

Depending on your insurer, you may not need to “pay” your deductible at all: many insurers simply subtract your deductible from your final settlement.

If you’re dealing with a total loss insurance claim, for example, and the insurance company has assessed your car’s actual cash value as $15,000, then you might receive a check for $14,500. The insurer has subtracted your $500 deductible from the final payout.

Alternatively, for smaller claims, the insurer may require you to pay your deductible to the service provider – like the repair shop. In this situation, most repair shops will accept credit cards, although certain repair shops may not.

Finally, some insurance companies require payment of the deductible directly to the insurer. In this situation, you should be able to pay your deductible in a number of different ways. Most insurance companies accept bank transfers, credit card payments, debit cards, checks, cash, and other payment options.

Should You Pay Your Car Insurance With a Credit Card?

For some people, paying your car insurance premiums and deductible is the best option. For others, it’s not a good idea.

Generally, if you’re paying off your credit card bills on-time and not carrying a balance, it’s advantageous to pay your bills using a credit card. Credit cards let you earn points with no penalty.

However, if you plan on carrying a balance, or are not always able to pay off your credit card bills on time, then you may not want to pay your car insurance with a credit card. High credit card interest rates can quickly wipe out any potential benefits.

Pros of Paying Car Insurance Premiums and Deductibles with a Credit Card:

Earn Rewards Points or Cashback: Many credit cards offer rewards points or cashback. This cash reward can be significant when paying for something like insurance premiums or a deductible, both of which can be thousands of dollars. If you can earn 1% to 3% cashback instantly with your credit card, then it may be a good idea to pay using your credit card.

Convenience: Credit cards are quick, easy, and convenient. You might get into the habit of putting all bills on your credit card, for example.

More Time to Pay: When you pay with a credit card, the money isn’t deducted from your balance instantly. You can choose when to pay.

Cons of Paying Car Insurance Premiums and Deductibles with a Credit Card:

Extra Fees: Some credit card companies charge extra processing fees or payment fees when using a credit card. Your insurer may have to pay Visa, Mastercard, Discover, or American Express a 2.5% cut to process the credit card transaction, for example, and this fee gets passed onto the policyholder.

Interest Payments: If you do not pay off your credit card in full at the end of the month, then you will pay interest. Most credit cards have annual interest rates of 20% to 30%. A single missed credit card bill can instantly wipe out any potential savings.

Lower Credit Score: Several factors go into your credit score. Something called ‘credit utilization’ is one of these factors. Credit utilization is a measurement of how much of your total credit limit you use. If you regularly max out your card or spend close to your credit limit, then your credit score could drop. Credit scores impact insurance premiums, as drivers with higher credit scores tend to pay lower premiums than drivers with lower credit scores.

Final Word on Deductibles and Credit Card Payments

Every insurance company has different rules governing credit card payments. Most major insurance companies are credit card-friendly, although some smaller insurance providers may not accept credit cards. Additionally, some insurers charge an extra processing fee when paying with a credit card.

Generally, you should have no issues paying your deductible with a credit card.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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