Can you pay for car insurance with a credit card?

Let’s explore everything you need to know about paying your car insurance with a credit card. 

Which car insurers accept credit cards? 

Nearly all major UK insurers (AXA, Allianz, LV=, Admiral, Aviva, Direct Line) accept credit cards. Most take Visa and Mastercard, with some accepting American Express too. 

You can usually pay online, over the phone, or sometimes in person. Credit cards are more common for annual, one-off payments than for monthly instalments, which are often handled through a separate finance agreement. 

The benefits and downsides 

As with all financial products, there are advantages and disadvantages. Some of these will depend on your personal situation. 

The good bits 

• Earn rewards – collect cashback, points, or travel rewards (such as Air Miles) on money you’d be spending anyway
• Convenience – quick online payments and automatic billing so you never miss a renewal
• Flexibility – spread costs if money is tight, especially with a 0% purchase card
• Extra protection – under Section 75 of the Consumer Credit Act, your card provider may help if the insurer fails to provide what you paid for (applies to purchases between £100 and £30,000). 

The not-so-good bits 

• Interest charges – if you don’t clear your card balance, you could pay 20%+ APR
• Credit score impact – using too much of your card limit or missing payments can hurt your score
• Debt temptation – it’s easy to overspend if you rely on credit too often 

When it makes sense (and when it doesn't) 

Use a credit card if you: 

• Always pay off your balance in full each month
• Want to earn rewards or hit a spending bonus
• Have a 0% purchase card and a plan to clear it before interest starts
• Value the extra protections credit cards can offer 

Avoid credit cards if you: 

• Can’t reliably clear your balance
• Are already close to your credit limit
• Face high APRs that outweigh the benefits
• Are trying to reduce existing debt 

Your other payment options 

• Direct Debit – often the cheapest method for monthly instalments, and may come with discounts
• Debit card – works like a credit card but funds leave your account straight away
• Bank transfer – direct, often free, but less flexible
• PayPal – available with some newer insurers
• Cash and cheques – rare, and not recommended for security reasons 

What about extra costs?

While insurers can't charge extra for paying by credit or debit card, you could still face interest if:

 Smart payment tips 

• Compare total costs – include APRs, not just monthly amounts
• Pay annually if you can – usually cheaper than instalments
• Check Section 75 eligibility – keep payment records in case you need to make a claim through your card provider
• Don’t miss payments – set reminders or Direct Debits to avoid late fees and policy cancellation
• Keep your credit healthy – try to use less than 30% of your credit limit and clear balances quickly 

What happens if your payment fails? 

If a credit card payment doesn’t go through, insurers usually: 

1. Try again a few days later
2. Contact you by email, text, or letter 

If it’s not sorted, they may cancel your policy. 

Common reasons payments fail:

• Card expiry
• Not enough available credit
• Bank security checks
• Wrong details entered 

Keeping your cover simple and secure