Credit Cards

[beamMEup]

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clocktick wrote:

I'd like to know Suze's opinion on this!

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I just caught Suze on PBS.  My favorite quote - frequently repeated - from her program:

"Live an honest life, and one you can afford."

[frogfan12]

When in college I received extra grant money my freshman year and paid off my CCs. I don't find anything wrong with that. What someone does with their loan money is their business and ultimately something that they have to live with. This whole moral vs. immoral discussion is irrelevant, if you ask me. There are far more "immoral" things that are going on in our world today that far surpass that use (or misuse) of student loan/grant/scholarship money. 

[drkaje]

Considering how long student loans take to be repaid, is there really much savings?

I've seen people use student loans for cars. A credit card is no different.

[webhopper]

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RoadRage wrote:

After months which became years of unsucessful lower APR requests, I gave up on the CC companies and paid off balances totaling $4500 @ 18% and 22% APR with a 6.8% unsubsidized student loan.  The student loan sat for 6 months before I started paying it back during my final semester in college.

I have savings accounts and just landed a good paying job and have other accounts inluding a mortgage all on my credit report.

Will future lenders be able to see through me in what I've done? (the two cards were paid off in multiple payments over two billing cycles)

Yes my credit cards are paid off, but my total amount of debt owed remains the same to a degree.

I chose to do this as 6.8% in one account is more managable than 18% and 22% in two accounts, and was tired of carrying that debt.

I hope to start improving my score for a potential auto loan sometime this year through my new employer - a national bank.

My concern is, will the bank see what I did and see it as a negative in any way?

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As long as you do not incur new CC debt, and work diligently to pay off your student loans I don't see anything wrong with your approach... I'm assuming that the CC debt was incurred while you were in school to pay for things like food, books?  The government gives you the option to take out these unsubsidized loans knowing that sometimes subsidized loans, grants, and scholarships do not pay for all your expenses. Congrats on landing the new job, and good luck in continuing to work on paying those CCs off.

[BlueHusky]

I don't think there is any reason not to use student loans/scholarships for paying off credit card debt as long as you still have enough for school and school expenses. Here is my reasoning:

If you have credit card debt, you have monthly payments anyway as it is. If you're in college and you're only income is from student loans, what do the people here who claim it is unethical to use student loans for CC debt expect you to do? Not pay your credit card bills? I'm pretty sure that's unethical too, not to mention would ruin a person's credit and financial profile for years. As much as people who have never been in that situation would like it to be true, it is not possible to simply close your eyes and makes your credit cards dissapear for 4 years while you finish college - they have to be dealt with. If a person has $5000 in credit card debt and DOES NOT pay it all off freshman year (using a student loan), then for the next 4 years they will be making monthly payments (again from student loans) that will honestly total more than $5,000. So what's the difference? Is using your student loan "monthly" as opposed to for a lump some somehow more ethical? No, either way a college student with credit card debt and only student loans for income has no choice but to use their student loans for payments - whether they are smart about it and pay it up front to avoid interest, or pay it over four years with 22% interest, they WILL HAVE to use their student loans. People on their soapbox need to calm down - let he without sin cast the first stone. I would love for anyone who says it is unethical to be in that situtation and see exactly what they would do.

[SwiftTone]

I think you did the logical thing. Whether or not it's seen as the "right" thing or not, that is up for debate. I would have done the same thing.

I took student loans when I didn't need it. The majority of the money didn't go to paying for education related expenses. I have $3500 subsidized and $1000 subsidized. The subsidized is interest free for the next 3+ years, and the unsubbed is at 6.8% interest which is deferred for 3+ years. It's just sitting in a savings account making a little interest. I did this because I have no family around here so if I need access to emergency money, I have it. My family does help me with school but can't gaurantee they can help me until I'm finished. When I finish, I plan on giving back to them what they gave me for school, and paying the loan myself. So yea, in a way the loan is being used for education. It's just not as clear cut as some others out there.