Student Loans on Credit Cards?

[CreditWarrior21]

I would be interested to know if anyone has paid down their student loans on Credit Cards? It would seem to me, that a credit card doesn't compound interest- therefore paying them down/off on CC's would be more cost effective.

For example: I owe 65K

Could I just throw 5K at a time on a CC- pay that off, and then put another 5K on it? So on and so forth?

Thoughts on this.

Thanks,

-S

[Anonymous]

Why don't CCs compound interest? Also, student loans don't capitalize your unpaid interest if you're on an ibr plan which saves you from paying interest on interest unless you get a deferment or forebarance. As a result paying off a loan under the SL repayment plan will save you money in interest compared to a credit card.

Example, a $100 sl at 12% interest has $1 in interest that month. If you have a $0 ibr payment plan, next months interest is still calculated off the principle 100.

A $100 CC balance outside of grace at 12% apr has $1 interest the first month. If u somehow had a $0 payment the 2nd months interest would be calculated on $101 not the original principle of $100.

[CreditWarrior21]

Understood. I'm on a standard payment student loan repayment plan however. And after 10 years of paying I owe MORE today due to interest then I did 10 years ago.

It's insane.

[Anonymous]

CreditWarrior, look into 0% Balance transfer cards, figure out the max amount you can pay down your student loans in the given 0% time frame and then transfer that amount to the card. You can save a ton in interest. 

[CreditWarrior21]

Thank you! good advice.

Currently, my student loans are at 6.7% so it is KILLING me. I love the 0% CC idea.'

We are closing on my first house (thanks to the help on the forums) on May 31st. The month after, I am going to take you up on that idea.

Financial Wellness 2017 and beyond!