So I need some help with a 5k school balance to graduate in the fall. I’m a mom of 3 and I don’t want to put my family in a financial bind, we just got in a good place!! Here are my options. A Sallie Mae loan vs a credit card. I’m leaning more towards the credit card because the APR is 0% for 15 months. I can definitely pay off 5,000 in 15 months. But am I understanding that correctly? Do I have 15 months to pay that off? Don’t I just need to make the monthly payments and pay it ALL off a month before the promotion APR ends??
My husband thinks I should just do a private school loan but the interest rates for that are criminal lol
I’ve never had a credit card and am pretty good about saving money and making smart financial decisions, I’m just a little desperate but still want to be smart.
I need help deciding between a credit card or a taking out a private student loan.
byu/EatPrayMama inpersonalfinance
Posted by EatPrayMama
1 Comment
If you can qualify for that kind of card and definitely 100% pay it off within the 15 months, then yes that would be a good option. You’re probably understanding it correctly but read the fine print. There are some things that have a 0% interest rate for x months, but if you don’t pay it all off by that time they’ll charge back interest for those previous months. That’s more common with store financing and CareCredit so I wouldn’t expect it to be the case with a regular credit card. But that’s the only situation I can think of where you wouldn’t be understanding the deal.
Some other important considerations: is your credit high enough for a good promo APR? Will you be approved for a high enough limit to use it for your payment? Do you need a good credit score for anything in those 15 months? Utilization is a big part of your credit score. So if your limit is $5500 and you put $5000 on that card, your utilization percentage will increase astronomically and your credit score will decrease similarly. But that doesn’t actually matter unless you’re planning to buy a house or car during that time frame.
Overall I think it’s a solid plan and I would probably choose it over a regular loan.