One of my goals for this year is to avoid any new debt other than my student loans. One of my credit cards has offered me 3.99% for life for a balance transfer with a max fee of $75. My Grad Plus student loan has an 8.5% rate. I haven’t done the math yet but by transferring $4900 of the student loan balance to the credit card I should be able to make up the $75 transfer fee fairly quick. Since this would actually still be student loan debt even though it is on my credit card it is in keeping with my goals in my mind. What would you do?
2 thoughts on “Pay Student Loan with Credit Card?”
A couple of things you may have not considered:
Tax Deduction – You will lose this if you transfer your student loan to a credit card.
Forbearance: With student loans, you can get a forbearance if you are not able to pay. You will not be able to do that if you transfer the balance to a credit card.
Tax deduction won’t be a big deal if you are saving 4%. I would keep in mind the benefits of student loans though, as above mentioned, which include forbearance and deferment.
If you have a secure job and solid finances, this may be a good deal.
PS-Even if they say “for life” scour the policy for any hooks or caveats, for example, requiring you to make a purchase each month. There is often a catch.