How to Buy a Bike Using Credit Cards?

When we purchase a bike, the question arises, shall I make a complete payment or use a credit card to pay? Credit cards have always been popular, and with growing competition in today's world, the rewards of credit cards have become very exciting. One such benefit of having a credit card is that you can purchase your bike using it. This article discusses the eligibility criteria for purchasing a bike on your credit card, factors to consider, process, etc.

Eligibility Criteria to Buy a Bike Using a Credit Card

Banks impose some eligibility criteria on the purchase of products by credit cards to ensure that the customer can pay back for the purchase. To check your eligibility, you can access the bank's loan eligibility tool or EMI calculator on their official website. 

If you are using your credit card for the down payment, ensure that you pay the credit card bill on time to avoid interest charges and penalties. Failure to complete payment on time not only makes you pay more but also hurts your credit score which might restrict you from making specific purchases.

What is the Process of Buying a Bike Using a Credit Card?

We’ve provided the process of buying a bike using a credit card below. You should follow these steps to buy a bike with your credit card:

• Step 1: Keep in mind the cost of tax and insurance, and consider the on-road price of the bike before making a decision. Set a budget accordingly and find a bike within the budget.
• Step 2: Check the availability of credit and the validity of the credit card. You must know if the funds available are sufficient to pay the bill.
• Step 3: Check the working status of your credit card, cards that haven't been used for a long time or have expired might need to get renewed.
• Step 4: If your credit limit is less than the cost of the bike, increase your credit limit by paying off the previous balances.
• Step 5: Go through the terms and conditions carefully and sign the necessary documents to complete the purchase.

What Happens If You Use a Credit Card to Buy a New Bike?

By using a credit card you can finance your purchase with EMIs where you can repay the installments in a given tenure which is usually not more than 2 years. By making payments through a credit card, you can improve your credit score and increase your CIBIL (Credit Information Bureau India Limited)  score as well.

When your money is in banks or invested in stocks, mutual funds, etc. it is growing with time. Purchasing through credit cards avoids heavy cash out from your bank or investments which allows your money to grow for a longer time. 

Before purchasing a bike with your credit card, keep in mind that it is very important to pay your installments on time. If you fail to pay on time you will end up paying high interest and penalties, moreover, it will affect your credit score as well. 

Factors to Consider Before Buying a Bike Using a Credit Card

While you are making up your mind on selecting the payment method for your bike, there are factors to keep in mind while using a credit card. These factors are:

• Make sure the price of the bike does not cross the limit of your card.
• A clean and good credit history makes the purchase process easier, hence always pay your bills on time and limit your spending in a way that you can repay easily as well.
• Always check the eligibility for rewards and cashback in case of making purchases through credit cards.
• Make sure you check for available discounts on purchases using a credit card. 

Important Note: Please note that rates of interest on buying a new bike and a used bike with a credit card might vary.

Conclusion

There are various benefits of buying a vehicle such as a bike with a credit card. Although you can get easy financing with a credit card, it is important to use it wisely. For this, you must keep in mind the factors affecting your credit score. It is also important to choose an EMI option that can be managed easily to avoid any potential penalties. Hence, it is advised to build a good credit history by paying the EMI installments on time.

Frequently Asked Questions (FAQs)

Ques 1. Can I only use my credit card to buy a bike?

Ans. No, you can use your credit card to buy any two-wheeler like a bike or a scooter. Additionally, you can use it to cover the costs of a car as well.

Ques 2. What is a major advantage of using a credit card?

Ans. If you pay your dues on time, your credit card score will improve. This will make you eligible for future loans and other rewards/ cashback.

Ques 3. Are interest rates important while using a credit card?

Ans. Yes, the interest rates will impact your EMIs. Hence, you should check the interest rates so that you can pay the installments easily.

References:

https://www.bajajfinserv.in/can-i-buy-bike-on-credit-card (1)

https://www.icicibank.com/blogs/process-of-buying-a-bank-on-emi (2)

https://finimpact.com/personal-loans/how-to-buy-a-motorcycle/buy-motorcycle-with-credit-card.html (3)

https://www.tatacapital.com/blog/loan-for-vehicle/is-it-advisable-to-buy-a-two-wheeler-on-a-credit-card/ (4)