topic Re: Amex and Student loans in Credit Cards

Amex and Student loans

youngandcreditwrthy — Sun, 24 Mar 2013 01:02:50 GMT

How do the major prime creditors(Amex, Citi, Chase,etc) feel about student loans?
I wonder because I'll be pushing $40k+ in student loan debt by the time I graduate next year. I make small payments even though none are due yet, but I wouldn't want to lose my primes just bc Ive decided to make an investment in myself.
The reality is I prob don't need to borrow money for school, but I genuinely feel like student loans are fairly easy to manage, and I like having a cushion. Unfortunately, I receive absolutely NO financial aid aside from loans, which I guess is okay. Wish my mom was paying my way or the gov't haha -.- . Mine are ALL Federal-no private! Although, I'm considering getting a Discover private student loan in the fall.
Anyway, do student loans cause AA in relation to credit card companies?!

Re: Amex and Student loans

FocusedAndDetermined — Sun, 24 Mar 2013 01:25:26 GMT

Your balance is about 14k high than mine, but from my personal experience, as long as you make your payments on time you should have no problems. I PCd my Chase (originally WaMU) Platinum Visa to a Freedom, and recently was approved for Dicover IT. Current balance for all loans down to 18K.

If you get a decent paying job when you graduate, and start paying the loans down you should be fine.

Re: Amex and Student loans

youngandcreditwrthy — Sun, 24 Mar 2013 01:40:25 GMT

Thanks! I already have a pretty decent paying job. I just wouldnt want to get aa for having student loans, but I suppose I wouldnt have gotten approved if student loans were an issue haha!

Re: Amex and Student loans

FocusedAndDetermined — Sun, 24 Mar 2013 01:50:48 GMT

You're welcome. Look at it this way, the student loan count as installment loans, which help with credit mix. As with all credit, one of the most important things is keeping them current. As long as you keep the loans to a acceptable/managable level you should see any AA. Unless the economy gets worse, and the banks start to freak out again.

Re: Amex and Student loans

SnackTrader — Sun, 24 Mar 2013 02:06:13 GMT

I have well over $60k in student loans reporting on my reports. In December, when I received my Chase, Citi, and Amex cards the balances on those loans was over $50k.

I made sure that none of my loans were close to their credit limit (everything was under 90% of its original balance) and it didn't appear to be an issue.

ETA: Perfect payment history on those loans as well.

Re: Amex and Student loans

Anonymous — Sun, 24 Mar 2013 02:12:50 GMT

I had $37k in federal student loans, making interest only payments, and got AmEx BCE with a 15k credit limit, despite making only 25k a year. I also have a Discover More card, a US Bank Flexperks Cash, Chase Slate and a Citibank card.

So no, I don't think it will hurt you.

You have the cards already. Are you concerned they'll close them on you because of your student loan debt? I don't think that's likely if you're using the responsibly and not defaulting on the student loans.

Re: Amex and Student loans

daybreakgonesXe — Sun, 24 Mar 2013 02:59:41 GMT

@youngandcreditwrthy wrote:
How do the major prime creditors(Amex, Citi, Chase,etc) feel about student loans?
I wonder because I'll be pushing $40k+ in student loan debt by the time I graduate next year. I make small payments even though none are due yet, but I wouldn't want to lose my primes just bc Ive decided to make an investment in myself.
The reality is I prob don't need to borrow money for school, but I genuinely feel like student loans are fairly easy to manage, and I like having a cushion. Unfortunately, I receive absolutely NO financial aid aside from loans, which I guess is okay. Wish my mom was paying my way or the gov't haha -.- . Mine are ALL Federal-no private! Although, I'm considering getting a Discover private student loan in the fall.
Anyway, do student loans cause AA in relation to credit card companies?!

With all honesty, I've never had an issue with my student loans on my report affecting anything, whether it be denial on a CC, CLI, or simply AA taken by closure or CLD due to increasing loan amounts.

I had the federal loans too, the Stafford that progresses from 5500 --> 6500 --> 7500 x2 (for junior and senior year) dispersements. The rest of my term bill is a decent portion of scholarships and the rest is the PLUS through my mother. So far, I have about $19000 in student loans reported (keeps reporting as one installment loan, they just add the dispersement amount to the original loan each semester), all still in deferrment. I see many posts on people trying to build/rebuild as students, and get denied a card due to their student loan, whether it is in repayment or deferrment. However, I've never had an issue with it or had it listed as a reason for lower terms for any of my cards.

The only denial I ever got was from Sallie Mae when my mother and I thought it would be a good idea to get a loan under my name, or if I couldn't do that due to young history, have my mother cosign with her so-so credit history and income to help boost my chances. My application and her cosigned application were both denied, but I don't recall my federal loans ever being a reason, simply short credit history. I'm sure if we didn't apply during that debt ceiling/budget crisis back in the summer of 2011, we would have been approved XD especially considering I had a hell of a better score than my mother did :X

As always, YMMV, I suppose!

Re: Amex and Student loans

webhopper — Sun, 24 Mar 2013 03:15:50 GMT

I have 15k in student loans... doesn't seem to be a problem.

Re: Amex and Student loans

android01 — Sun, 24 Mar 2013 03:27:36 GMT

I'm sorry people, but student loans are the next "bubble" and I don't mean to burst yours. Please be careful about NOT considering what you owe in student loans and applying for credit cards for personal use. I'd hate to see any of you young guys and girls get wrapped up in credit card debt above and beyond the insane amount you have in student loans, which will become due, before you know it.

Re: Amex and Student loans

webhopper — Sun, 24 Mar 2013 03:49:33 GMT

I personally think that people should only apply for what they need in student loans. When I went to school 10 years ago it was really my only option to pay for school; along with scholarships.

I'm happy to say that I'm in grad school part time and my husband is in undergrad full time and we are doing it without student loans. That being said; I didn't get a fluff degree and my husband isn't getting a fluff degree and I'm glad we can afford it.

Re: Amex and Student loans

09Lexie — Sun, 24 Mar 2013 04:10:49 GMT

I'm down to my last $4,200 in Stafford loans and it has been forever! Thankfully, they are helping my credit with the AAOA. My DD and DS loans are still deferred but I have cautioned both of them regarding obtaining too much credit card debt. Having the TLs are fine as long as you keep your util down to < 10%.

Edit: DD

Re: Amex and Student loans

android01 — Sun, 24 Mar 2013 04:03:54 GMT

@webhopper wrote:
I personally think that people should only apply for what they need in student loans. When I went to school 10 years ago it was really my only option to pay for school; along with scholarships.

I'm happy to say that I'm in grad school part time and my husband is in undergrad full time and we are doing it without student loans. That being said; I didn't get a fluff degree and my husband isn't getting a fluff degree and I'm glad we can afford it.

I think that's great, webhopper! I've seen so many posts here and elsewhere where so many young people have student loans that are larger than my first mortgage ($85,000), and I worry about those who are going to add personal credit card debt on top of what is owed in student loan debt. Congrats to all the graduates that find jobs - post college - that allow them to do both, but I do worry that a majority of folks with substantial student loans will be paying them off for the rest of their lives, plus credit cards, plus a mortgage, plus whatever happens in life. It's just a concern of mine that may happen, or not.

Re: Amex and Student loans

sassymomof2 — Sun, 24 Mar 2013 04:06:06 GMT

I have over 50k in student loans and I am on the forever plan. (300 payments). My balance never moves. I plan on having them forgiven in another six years due to my occupation. It hasn't affected me. I usually defer my pmts at least once a year because I have better things to do with $350 a month.

Re: Amex and Student loans

webhopper — Sun, 24 Mar 2013 04:06:20 GMT

If you spend a lot of time in the mortgage forum you may unfortunately see cases where the student loan debt really stops people from getting homes. Sad but true.

To stay on topic; I don't see a lot of cases where the student loan debt stops people from getting a credit card or auto loan.

Re: Amex and Student loans

SnackTrader — Sun, 24 Mar 2013 04:07:45 GMT

I agree that student loans are indeed the next bubble - but that doesn't mean that all students are part of it. It only takes a significant level of defaults (15% maybe?) to wreak major havoc on the student loan market. I believe we are over 10% default rate right now, and the mortgage market was only around 15-18% in 2007. However, that means that over 80% of people were paying their mortgages as agreed when things were at their worst, and it means that 90% of students and graduates are paying their debt today.

I appreciate your concern, and I will heed your warning, android, but please be mindful when you address a large group of people who are in student debt that they may have very different views on the burden or purpose of their debt. Mine was to help me afford a college I could never attend without assistance, which in turn helped me get a fantastic job in my chosen field just two weeks after graduation. I wear my debt as a badge of the American dream, and I will repay that debt responsibly.

Not everyone is in my shoes, and I have mixed emotions of sympathy and frustration towards those people. But in general, I too hope everyone makes it out of their student debt safely.

Re: Amex and Student loans

webhopper — Sun, 24 Mar 2013 04:11:15 GMT

Student loan debt; also is not dischargeable by BK except in rare circumstances.. so in a way it doesn't carry the same risks of being uncollectable as mortgage debt via BK.

Re: Amex and Student loans

android01 — Sun, 24 Mar 2013 04:13:29 GMT

@sassymomof2 wrote:
I have over 50k in student loans and I am on the forever plan. (300 payments). My balance never moves. I plan on having them forgiven in another six years due to my occupation. It hasn't affected me. I usually defer my pmts at least once a year because I have better things to do with $350 a month.

Thank you for making my point.

Re: Amex and Student loans

SnackTrader — Sun, 24 Mar 2013 04:15:07 GMT

Well, it still becomes problematic for the banks that take losses on the debt when an individual defaults in the case of private loans. Just because they get the money over time doesn't mean it is good in the short term.

For the government, it just means higher spending and less revenue, which is an existing problem that shall not be discussed here.

Re: Amex and Student loans

android01 — Sun, 24 Mar 2013 04:34:36 GMT

@SnackTrader wrote:
I agree that student loans are indeed the next bubble - but that doesn't mean that all students are part of it. It only takes a significant level of defaults (15% maybe?) to wreak major havoc on the student loan market. I believe we are over 10% default rate right now, and the mortgage market was only around 15-18% in 2007. However, that means that over 80% of people were paying their mortgages as agreed when things were at their worst, and it means that 90% of students and graduates are paying their debt today.

I appreciate your concern, and I will heed your warning, android, but please be mindful when you address a large group of people who are in student debt that they may have very different views on the burden or purpose of their debt. Mine was to help me afford a college I could never attend without assistance, which in turn helped me get a fantastic job in my chosen field just two weeks after graduation. I wear my debt as a badge of the American dream, and I will repay that debt responsibly.

Not everyone is in my shoes, and I have mixed emotions of sympathy and frustration towards those people. But in general, I too hope everyone makes it out of their student debt safely.

I will never begrudge anyone a chance to get a higher education for a chosen career or the American Dream, which you seem to be on the way to acheiving. You have perspective and conviction concerning what you've been afforded through student loans, respect for what it means, and a great job as a result. Congrats! That's what it's all about, or should be. My concern in this forum at least, is about those who have incredible student loan debt and are appyling for credit cards for personal use on top of what they already may owe, when they don't know any better. I'm not trying to group ALL recipients of student loans into this category, but there is certainly anecdotal evidence, on this forum at any rate, that this is going to be a HUGE problem for many people in the future.

Re: Amex and Student loans

SnackTrader — Sun, 24 Mar 2013 04:43:38 GMT

Yes - thank you for clarifying, and I agree with you. The credit behavior of many on this forum and in America in general can be concerning, and I see exactly where you are going there. High interest rate credit cards is no way to finance long term repayment of (typically) subsidized student debt.

I guess I'm just on my high horse tonight for whatever reason. I did make a massive student loan payment this week (about 8% of outstanding balance), so I feel particularly proud of myself for that. I think that may have carried through into this discussion.

Yay for prepayment!