Whether you’re doing this because you can’t afford an upcoming payment or you want to transfer your entire loan balance to your credit card to take advantage of a 0% introductory APR offer, you’re taking on credit card debt to pay off your loan. On the other hand, if you don’t have the money on hand to cover the portion of your loan payment you charge to your credit card, you’re financing your payment. But you should pay off your credit card balance immediately to avoid accumulating more interest. In this case, it might make sense to pay off your student loans with a credit card.
If you already have the money on hand to cover your student loan payment but want to route the transaction through your credit card - typically to earn rewards - instead of paying directly from your bank account, you’re treating the credit card as purely a transaction method. Reasons to pay student loans with a credit cardīefore thinking of “paying” your student loans with a credit card, you should understand the credit card has two separate purposes in this context: as a transaction method and as a financing method. Depending on your reason for wanting to pay your student loans with a credit card, and how you plan to pay off the balance, some of these methods may work better for you than others. However, there are a couple ways to get around this rule using third-party services, cash advance-like transactions or balance transfers. Generally, you’ll need to pay your student loans with an ACH transfer by linking your bank account, a check directly from your bank or a money order. The US Treasury prohibits making federal student loan payments directly with a credit card, and most private student loan lenders don’t accept credit card payments, either.
#YOU NEED A BUDGET CREDIT CARD PAYMENTS HOW TO#
Here’s what to know about how to use your credit card to pay your student loans - and when you shouldn’t do it.Ĭan you pay student loans with a credit card? A few missed payments are enough to send you deeper into debt. But the process is complicated and the risks are significant. While we don’t recommend considering paying down your student loan bill with a credit card to finance your monthly payments, there are a few exceptions where paying your student loans with a credit card can make financial sense. And you might be considering using your credit card to pay your student loans. If you’re among the 58% of federal student loan borrowers whose financial stability depends on the payment pause, you may feel unprepared for payments to resume.
Since the COVID-19 student loan payment pause was instituted in March 2020, many borrowers haven’t made a student loan payment in more than three years.īut now, the end of the payment pause is in sight.Ĭurrently, student loan payments are set to resume 60 days after the Supreme Court reaches a decision about President Joe Biden’s student loan forgiveness plan, or 60 days after June 30, 2023, whichever comes first.
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