Certain credit cards have a promotion where they give you like a couple months ago up to like I think the highest I’ve seen is 24 months of interest free and just wanted to know if that is worth using to pay off my loans early
This is for my girlfriend. I was wondering if it would affect her credit score as I think her and her dad have a little bit low credit score currently but I want to know if it’s good advice I should recommend to her.
Advice on using a credit card to pay off student loans one of the zero % interest free credit cards
byu/appleQuestionairie inStudentLoans
Posted by appleQuestionairie
6 Comments
You can’t without using a third party service which would cost you more than you are saving.
No. Never trade loans for credit cards.
Are they federal loans? That means they have protections, like options for income-driven repayment if she loses her job, or forgiveness if she works in public service.
If her credit score isn’t very good, she’s not going to qualify for a very high credit limit. If you immediately get a card and max it out, your credit score will go way down. Many of those 0% cards come with deferred interest, meaning if you don’t pay off the whole thing you have all the back interest charged at once. Also, the 24 months rarely happens, you have to have elite credit to qualify. For poor credit you’re lucky to get 12 months, if you even qualify at all. Also, life happens, you never know when sh*t hits the fan and now you’re stuck with 25+% interest on your student loans. Also they typically come with a balance transfer fee of 3-5%.
On my federal student loans, not sure on private, you cannot pay with a credit card. You would have to take on something like a cash advance and it would probably be more wasteful to do that.
https://www.reddit.com/r/StudentLoans/comments/tx65bu/paying_student_loans_with_a_credit_card/kbn8oxs/
You can’t pay a student loan with a credit card
I have literally been down this rabbit hole all day.
two things I found- theres a website [https://www.giftofcollege.com/](https://www.giftofcollege.com/)
so basically look up the stores that sells the higher cards (about $500) and the fee is $5 fee and if you can get the ones for $500 you can use a credit card and take advantage of some higher points or cash back- I went down a worm hole. For example Cumberland farms is in South Florida- sometimes my chase card does 25% points on gas stations- if they had gift cards, I’d but it with my CC then use points to pay it off.
As for the credit card balance transfer- the fee is the 5% then its 0% APR for 12 or 24 months – the only thing im confused about is if you continue using the card is the interest charged immediately on new purchases even if you usually pay your card in full. I think thats what the catch is.
Ex. My limit is 50k and I used 15k for the balance transfer and then continue to use the 35k for spending despite always paying my card in full, do those purchases automatically start charging interest.
Doing the math- I have the 15k in a HYSA but if you can borrow the money for 0% APR, the 5% fee is less than a 7.2% student loan over 12 months and you have the cash still growing in HYSA.