Credit cards tend to reward large purchases such as holidays and cars. But does credit cards help one of the most frustrating costs of early adulthood?
If you are thinking of using your credit card to pay off your student loan and earning some rewards to offset costs, you are not alone. Many borrowers wonder if that is permitted. It is possible to pay student loans with a credit card, but it is usually a wise move, but not a direct way.
Most loan providers do not allow credit cards, so you may need to use third-party services. However, using third-party services typically involves a fee to cancel any potential points or cashback rewards you may earn. In addition to that, there are several risks in this route that can make your debt worse. Read the risks involved Pay off student loans with a credit cardlike losing your federal protection or tackling a higher interest rate on your debt.
However, if you determine that your profits still outweigh the risks, these steps can help you progress your repayment plan as safely as possible.
Determine whether you can make direct loan payments with your credit card
Most loan servicers require payment from a bank account, making it difficult to pay with a credit card. Log in to your student loan account and go to your payment options. Start your payment and check and confirm whether paying with a credit card is an option.
If you can’t use your credit card, use these strategies
The following strategies may help you avoid restrictions from loan services.
Work with third party services
Such third-party services generally do not accept credit or debit card payments with credit or debit cards. When you pay for your student loan through a reputable third-party site, you can pay your loan provider its preferred method (check, bank transfer, or wire transfer) while charging your credit card. This method is best used with credit cards with a large welcome bonus that can be redeemed as a statement credit to offset student loan payments and service fees.
Disadvantages: Despite being able to earn rewards with a credit card, these services typically charge a fee for each payment. If you win a welcome bonus, these fees may outweigh the rewards you may earn at the time of purchase. Also, if you carry your balance to your card, you could end up in debt. You also need to be aware of the various processing times of payment methods that the loan service accepts and plans accordingly.
Use the convenient check
If you want to avoid paying for third-party sites and take a more direct approach, A convenient check. Like personal checks, you can use the balance available on credit cards and create it directly on the receiver. Can be used where periodic checks are accepted. This is a good way around the uncredit barriers that most student loan services have. It may also be processed faster because it does not have to go through another service.
Disadvantages: Be very careful. Convenience checks automatically have the same interest rate Cash Advancedit could be over 29%. You should only use this strategy if you have cash on hand. You just want to pay off your bills immediately and get a reward. Still, it may not be worth it. The handy check comes with a unique fee set, which offsets the rewards you earn.
Use these credit card payoff strategies
Once you know how to pay for your student loan with a credit card, you need to consider a payoff strategy. Do you charge a majority of your loan balance to your credit card? Or are you planning on continuing to pay small, fixed monthly payments?
For large amounts of charging, take advantage of the 0% intro APR offer
There are many cards that offer a 0% intro APR to new cardholders. This means you don’t have to worry about interest due to limited time. Most offers last from 12 to 18 months, but up to 24 months.
Wells FargoReflect® CardFor example, it offers an introductory APR of 0% for both 21 months purchases and qualifying balance transfers, followed by a variance APR of 17.24%, 23.74%, or 28.99%. If you don’t have the money to pay off your bills immediately in your bank account, using a 0% Intro APR card is your best option.
Disadvantages: Most intro APR cards have an interest rate around them, but National AverageCredit card APRs tend to be higher than student loan APRs. I want to make sure I can fully pay my student loan (now credit card debt) 0% intro APR period endsotherwise you will pay more interest. You also need to make sure that your loan payments are counted in the eyes of your issuer as qualifying for your intro APR offer.
For small recurring fees, use a flat rate card
For those planning on using credit cards to reduce balance over time, a flat cashback card may be your best tool. Most reward cards offer only 1% cashback for student loan payments, as student loans do not fall into the traditional bonus category, but flat rate cards are offered. 1.5-2%.
City Double Cash® Card That’s a good example. This card will be provided up to you 2% cashback With all purchases – 1% on purchase, 1% on payment. It also comes with a welcome offer that will allow you to redeem Statement Credit And use it towards your balance.
Disadvantages: Even if the reward you earn with a flat rate card is 2%, you can still be a exploitative measure of the fees you pay to third-party services to help you pay with your credit card. It may be a little better if you use convenience checks this way, but you can also cancel convenient check fees excluding profits, especially if you need to pay back immediately and pay interest. If you want to move your entire loan balance from your loan account to your credit card account, we recommend focusing on finding an introductory 0% APR offer.
Consider these additional tips
By following additional strategies such as scheduling credit card payments, you can go well to pay off your student loans in a timely manner. Try multiple strategies to see what works best for you and be open to changing things if things change.
Play calendar games
Timing is everything and you can use it for your benefit. Most cards allow you to change the due date. Set loans and cards due dates at least two weeks apart. By doing this, you give yourself a safety net. If unexpected expenses arise, you have time to adjust your budget. This also allows you to earn pay during deadlines, providing more flexibility in your budget.
If you tend to confuse dates or you can’t forget this method may not be the best. If the window is too large, it may be better to place the due date close by. However, leave it for a few days to allow for delays from issues like site crashes, processing times, and vacation times.
Mix and match
Who says you need to stick to one way of repaying your loan? The end goals remain the same, so you can mix and match the methods if necessary. Take a look at your current spending habits and decide which method of debt repayment is best for you. Maybe it means using third party services to move your debt chunks to a 0% APR credit card. New credit card Until you get a large welcome bonus.
But while it’s important to find the payment strategy that suits you, you don’t want to open too many credit cards in a short window or complicate your repayment plan. Be sure to find it Pre-approved cards To avoid Strict enquiries Wait at least 6 months to 1 year with your credit card.
Also, don’t give your curiosity or hearsay the best you can. If you find a strategy that works on your budget and schedule, stick to it. If you want to switch, be sure to investigate.
Conclusion
Your refund Student loan debt With credit cards, there is a risky effort to provide almost rewards in return, after taking into account the extra fees and the hassle of juggling multiple payment options. There are several potential benefits, such as earning a welcome bonus or being able to pay off some of your debts with a 0% introductory APR card offer, but you may run into drawbacks too.
If you decide, it will be worth paying off the loan with a credit card, work for you and come up with the most stress-free plan possible. Explore other options and help you clear yours Student loan debt Before you begin the process. There are many private companies in the student loan debt relief business, but you can find the range of the range Government Resources To help you get rid of your debts.
