Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Student Loans
Profile Image

Question By
vyper911

0 Contributions
0 People Helped
Should I pay off my entire credit card balance with student loans?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-5 of 5Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
2 Contributions
6 People Helped
Most Helpful Response

Depends!

Helpful to 6 out of 6 people

I think it really depends on the amount of the credit card debt and the interest rates you are paying on them.  While the above response does make sense (paying debt with debt doesn't seem to make sense), if it involves saving you a lot of money on interest while making at least relatively similar payments, then why not!  

The thing you have to think about is student loans don't require payments immediately, so you may get too comfortable when all of your credit card debt is gone and you're not making payments, then BAM!  Six months after graduation you're putting $500/month on your student loans.

Now, if you're able to budget yourself properly so that when it comes time to pay on your student loans (for instance, putting a portion of what you were paying on credit cards toward your student loans), then I say go for it.  It's all about managing where your money goes.

My fiance and I paid off some of our credit cards with student loans, and the interest alone that we're saving is enough to make 2 of the monthly payments we were making toward the credit cards.  Our situation may be unique, however.

Everyone that offers advice will tell you the same thing after all is said and done: it really depends on your situation.  So, crunch the numbers.  Below I've included a site that allows you to punch in up to 9 debts and their rates, etc.  This calculator will return a plan that tells you the most efficient way to pay down your debt without consolidation or using your student loans.  Very helpful stuff, and helped us get out of debt years sooner, so take a look here: 

http://www.bankrate.com/calculators/managing-debt/debt-pay-down-calculator.aspx

Good luck with whatever you decide!!!

Reply by
digger187

2 Contributions
6 People Helped

Oh, and like cnickersonjr said, cut up the cards before you do anything!  There's no point in consolidating debt if you're just going to put more debt on yourself!!!

Top Contributor
23 Contributions
79 People Helped

Balance transfer

Helpful to 1 out of 1 people

You should find a card that offers no interest long enough to pay off the balance. The Chase Slate card comes to mind. No transfer fee and no interest period. Do not use your transfer card for purchases, only use it to get your debt paid off. Do not use credit cards if you cannot pay them in full each month. Credit cards are a tool for earning rewards, not a tool to borrow money. Student loans are a tool to pay college tuition, not a way to postpone paying off credit card debt.

1 Contribution
0 People Helped

I did it!

I just recently maxed out my student loans to pay off my credit cards.  I owed too much, and the interest rate on half of them was extremely high.  I thought of it as consolidating my debt into my student loans.  

However, don't overwhelm yourself with student debt that you won't be able to pay off.  If you think you're going to have to defer your student loan payments because you won't be able to afford them, then definitely don't do it.  Remember, student loans are rarely ever forgiven, even if you declare bankrupcy later on in life.

Just make sure whatever you were paying on your credits cards you roll over and start paying you student loans.  I know you have six months before you have to start paying, but if you can start paying them off now you'll owe less once you are required to pay them.

2 Contributions
0 People Helped

Helpful to 0 out of 3 people

No, you shouldn't.  Not only do you still owe the money, but your credit card could have a higher interest rate.  If you are having trouble making payments they will generally work with you to avoid ruining your credit.  If you can make a big payment to lower the amount of interest that accrues do so.  In my case it made it so I didn't actually need to make another payment for several years.  Interest will still be added but it's nice to not have to worry about a payment due date if for some reason that month I can't make a payment.

Student loans also seem to show up differently on your credit report.  Having a student loan on my report actually raised my credit score.  Now paying it off will help, however simply transfering it over to a credit card would probably counter the benefit because now I would have a maxed out credit card balance.  Does that make sense?

Reply by
Tevisthe4th

1 Contribution
3 People Helped
Helpful to 3 out of 3 people

They are asking the opposite of what you think they are asking.

Should they use student loan money to pay off a credit card?  I would say likely yes as likely the student loan interest rates are lower than the credit card rates.  This is provided the student loan money is not needed for paying tuition or books or anything needed to get your degree.

Reply by
venomoverlrd

2 Contributions
0 People Helped

Yea, I read the question backwards, my fault, but hey, the more you know.  You shouldn't pay either with either.  :)

1 Contribution
1 Person Helped

The borrower is slave to the lender.

Helpful to 1 out of 6 people

No. Using student loans to pay off credit card debt is bad! Cut up the credit cards & pay them off with income. You'll need the money when your student loans come due. Lol. Question? Why are you so in love with debt? If you don't need the money from student loans for school, don't borrow it! Or use the money you don't need for school to pay down your loan balance once you graduate. Debt will cause you to lose hair. Stress you the hell out. Avoid it at all cost.

Results 1-5 of 5Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.