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Credit cards for big purchases tend to reward. There are cards aimed at rewarding vacations, business needs, and even cars.

According to the CollegeBoard, 55% of the 2020 class will graduate with student loan debt, with borrowers owing an average of $28,400, according to the CollegeBoard. Things have calmed down a bit lately, but the time for repayment is approaching again. If you're thinking of using your credit card to pay off your student loans — yes you can, but it only makes sense in certain circumstances.

Before proceeding with this method, read about the risks of paying off student loans with a credit card. For example, federal protections may be lost or interest rates on debt may rise. If you decide that the benefits outweigh the risks:

First: Determine if the loan can be paid directly by credit card

Credit card payments are difficult because most loan servicers require payment from a bank account. Log in to your student loan account and go to Payment Options. Initiate a payment and see if paying by credit card is an option. In that case the process is very easy. If not, you may have to use a third party site such as Plastiq or get a convenient check from your card issuer.

Once you know your options, you can strategize.

Strategy 1: Third Party Services

Middlemen often have a bad reputation, but this can actually work in your favor. Making student loan payments through a third-party site allows you to charge your credit or debit card while still paying the recipient. You can pay by any method you prefer (check, bank transfer, or wire transfer). This allows you to pay large bills that you normally wouldn't be able to use a credit card for. This method allows you to have more control over your cash flow while earning rewards on your credit card on bills you wouldn't normally qualify for.

Disadvantages: Such services are frequent despite being eligible for benefits. We charge a fee for each payment. For example, Plastiq charges his 2.85 percent fee per transaction, which may exceed the rewards you get on your purchases. You should also be aware of the differences in processing times for payment methods accepted by loan services and plan accordingly.

Best card for this method: Chase Sapphire Preferred® card. The card only offers 1X percent back on typical purchases, but when used to pay off loans, the card offers a hefty welcome bonus (60,000 if you spend $4,000 within the first 3 months of opening the card). bonus points). This can turn into a statement credit that can be used to pay off your balance. You can also avoid transaction fees entirely by using the interbank transfer option with Chase bank.

Strategy 2: Convenience Checks

If you avoid paying third-party sites and want a more direct approach, convenience checks are a way to eliminate middlemen. Similarly, you can use your credit card's available balance to send money directly to your recipient. It can be used anywhere a regular check is accepted and is a good way to get around the no-credit card barrier that most student loan services have. It can also be faster because it doesn't have to go through another service.

Cons: Proceed with extreme caution. Convenience checks automatically accrue the same interest rate as cash advances, which can be 29% or higher. Use this strategy only if you have cash on hand to quickly pay off the fees and you simply want to be rewarded.

The best card for this method: American Express Blue Cash Everyday Card. American Express offers the best customer service of all credit card issuers, so if you're having trouble with convenient checks (accepting, using, processing, etc.), no problem. The card has a 0% introductory annual interest rate for purchases and balance transfers for 15 months (annual variable annual interest rate ranging from 18.24% to 29.24% on an ongoing basis), but this benefit does not apply to convenience checks. not.

Credit Card Payoff Strategies

Once you know how to pay off student loans with a credit card, you need to consider a payoff strategy. Do you want to charge the majority of your loan balance to your credit card or do you plan to have a small fixed monthly fee?

For larger charges, use the 0% APR period

There are many cards that offer 0% APR to new cardholders. This means you don't have to worry about interest for a limited period of time. Most offers last her 12-18 months, but some take him up to 21 months. This is an option if you don't have the money in your bank account to pay the fee immediately.

Disadvantages: Interest rates on most introductory APR cards are about the national average, but his APR on credit cards tends to be higher than his APR on student loans. You want to make sure you can repay the loan in full before the introductory APR period ends.

Best card for this method: Chase Freedom Unlimited®. Introductory APR lasts 15 months (after that, variable from 18.74% to 27.49%). This is average length. Another element of the referral offer that takes this card to the next level is the boosted reward rate. For his first year there is 3% cashback on all purchases. This is higher than most flat rate cashback cards, and the majority of introductory APR offers entitle you to this benefit.

For small recurring charges, use a flat rate card

For those planning to use credit cards to gradually reduce their balance , a flat rate cashback card might be the tool of choice.Student loans don't fall into the traditional bonus category, so most loyalty cards only offer 1% cashback on student loan payments, Flat rate cards offer 1.5-2%. Some come with a welcome offer that can be redeemed as statement credit towards your balance.

The downside: This option is primarily set up for making fixed payments over the long term and for those who want to earn rewards along the way. If you are looking to move your entire loan balance from your loan account to your credit card account, we recommend that you focus on finding an introductory annual interest rate of 0%.

The best card for this method: Citi® Double Cash Card. This card offers 2% cash back on all purchases. So 1% on purchase and 1% on payment. This setting allows you to prompt to pay the balance.

Other Tips

Play the calendar game

Timing is everything and you can use it to your advantage. Most cards allow you to change the payment due date. Many cards default to the 28th of every month. You can take advantage of this by setting loan and card due dates at least two weeks apart. By doing this, you provide yourself with a safety net. When unexpected expenses arise, you have time to readjust your budget. This gives you more budget flexibility as you can also pay your salary between deadlines.

If you tend to confuse or forget dates, this may not be the best option. However, in the event of delays due to site crashes, processing delays, vacations, etc., you should allow a few days in between. Discover it® Cashback waives first late payment.

Mix & Match

Who says you have to stick to one way to pay off your loan? Can be used in combination. Take a look at your current spending trends and decide from there the best debt repayment method. Tried a flat rate card for a few months but not getting enough rewards? Switch to a 0% annual interest card. Tired of third-party site fees? Go to Convenience Check. Ultimately, you're the one who has to pay off your student loans, so find what works best for you.

Finding a payment strategy that works for you is important, but you don't want to open too many credit cards in a short window or complicate your repayment plan. . Always look for pre-approved cards and wait at least six months to a year before opening another card to avoid difficult credit card questions. Also, don't be fooled by curiosity or hearsay. Once you find a strategy that fits your budget and schedule, stick with it. If you want to switch, be sure to do your research.


It is essential to mention that paying off student loan debt with a credit card is risky and risky. reward. While it has some potential advantages, it also has significant disadvantages. If you decide it's worth paying off a loan with a credit card, make a plan that works for you and is as stress-free as possible. Remember that you may consider other options to get rid of your debt.