Credit Card to pay Student Loans? (Not what it looks like)

[longtimelurker]

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Rhaeny wrote:

Okay gotcha....I had to go back and read everything.  Thanks for explaining it again...LOL!!!  

I was so excited thinking that I found a way to get more rewards that .

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That's what option 2 is all about!

[CreditScholar]

At 2.5%, it's about a break-even if you use a high-end rewards card. The United Club or SPG can easily return 2.5-3% or more, but others can be quite iffy.

[unc0mm0n1]

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@Anonymous wrote:

As paying with a credit card only supplants one form of debt with another, Nelnet only accepts credit/debit card payments on federal student loans in the following instances:

- Your account is current and the next payment is due within three days or less (payment amount can be made only in the amount of your monthly payment).    

- Your account is delinquent and the credit/debit card payment will bring your account current.

- Your account is delinquent and the credit/debit card payment will bring your account current plus pay the current month’s payment.      

- Your bank account is through a foreign bank, regardless of whether your account is delinquent or current.

Credit/debit card payments can only be made over the phone. There is a $15.00 fee assessed to all credit/debit card payments.

Simple. Safe. Smart.  Visit www.nelnet.com and click “Manage My Account” to access your statements and account correspondence, sign up for automatic payments through KwikPay®, make a payment, change your repayment option, apply for a deferment or forbearance, and much more!

1.888.486.4722. We’re here to help you reach your goals.

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This would be a good option if you are going ot pay all at once. I plan to pay my 10k debt at one time so 1% would be $100 and that would negate the $15 fee.

[MovingForward_2012]

My student loans can only be paid back directly through my bank account. Same thing as my auto lease payment and mortgage.

[StartingLifeOver]

I was thinking the same way, OP. I have Sallie Mae but I didn't even see the option to use a cc with a fee as drkaje mentioned. My acct shows an offer of a .25% interest rate reduction, if I allow automatic debit of my checking acct--Huge no-no to me. Auto-bill to my credit card, however, show me where to sign up! Why shouldn't we earn cash back while paying these loans off?

[Astraywhit]

Because the credit cards would be charging them a fee to process the transaction; which is handed partially back to you in the form of cashback...

[Astraywhit]

Btw if I had the choice of auto pay from checking for reduce rate of .25 I would take it, that's essentially cash back but instead of letting you purchase something with it it goes "back into your loan"

[MoneyWriter]

So, I'm curious, BlueHusky, did you try paying the student loan with a credit card and did it work?

[enharu]

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@MoneyWriter wrote:

So, I'm curious, BlueHusky, did you try paying the student loan with a credit card and did it work?

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you can use certain services such as charge smart, but there's a fee.

some lenders allow student loans to be paid via credit cards as well, but usually they'll charge a fee which makes it not worthwhile if you're trying to do it for rewards.

[panth0r]

I couldn't help but sign up just to say, "the 14.95 transaction fee may well be mitigated by any rewards/points/miles/etc. earned."

Let's say a point is redeemable for $0.01 and a point is earned for each dollar spent.  In the OP's agressive payoff stragety ($2000-2500 per month), that's $20-$25 earned in points!

As has already been stated, there's go-between services that allow you to pay down your loans with a credit card, usually/always for some fee.

Stack those points and reward yourself with a video game console or something for the discipline and rigor needed to accomplish this goal!