Can I Pay Student Loans with a Credit Card? (And 4 Good Reasons You Shouldn’t)

You cannot pay off federal student loans with a credit card, but you may be able to pay some private student loans with your card. Not all private lenders offer borrowers this facility.  

But, and this is important, just because you can, doesn’t mean you should. 

Paying student loans with a credit card may have a few obvious benefits but it has many major drawbacks that may not be so evident at first. The risks are significant and makes paying student loans with a credit card a bad idea overall. If you’re struggling to pay back your student loans, it may be better to better to explore other alternatives.  

Why Would Anyone Want To Pay Student Loans With A Credit Card? 

Paying student loans with a credit card does offer a few benefits that make the prospect sound very appealing. 

1. You earn rewards on your credit card spending

Credit cards offer several enticing rewards. Some cards offer cashback on purchases from select stores. Others allow you to rack up points or bonus miles that you can redeem for hotel stays, air tickets, and other purchases. Using a credit card to pay down student loans can seem like a great way to get more credit card rewards faster.  

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2. You can buy some time before your next payment is due

Maybe you don’t have the amount you need to cover the next loan repayment. And there’s no way you can raise the money you need before the payment becomes due. Under these circumstances, paying your student loans on credit can buy you a little more time to raise the necessary funds. 

3. You managed to get a card with 0% APR

Many credit card companies offer a 0% APR to new cardholders. This is generally valid for a limited time only but that may be good enough for your purpose. 

Using a 0% APR card to pay eligible student debt may help you save money on interest. To make this work, you must plan out a detailed strategy to pay back the full outstanding during the 0 percent APR period. You will pay interest on any balance that is still outstanding after this period lapses.  

Downsides To Paying Student Loans With A Credit Card

Before you start using your credit card to pay off your student loans, you must take time to understand the risks. 

1. You’ll lose money to fees right off in transaction fees

You can’t use your credit card to pay student loans the same way that you’d use it for other purchases. Most credit card companies don’t allow it. To get around this restriction, you’ll have to use a third-party company. All third parties charge a significant fee to facilitate this transaction. These fees add to your student loan and essentially wipe out any potential benefits of using the card. 

The reward points on any credit card do not make up for the high transaction fees of using a third party. For example, Plastiq is one of the better-known third-party facilitators. Plastiq charges 2.85% of the transaction fee on each payment made through them. It may seem like a small amount but consider the implications on large amounts. You will pay $285 extra in fees alone for every $10,000 student loan repayment that you make using your credit card. That’s a huge amount and makes paying off student loans with a credit card an expensive proposition. 

Besides, if you’re already struggling financially, those additional fees can make the next month’s payment even more unaffordable. This can send you into a cycle of debt. 

2. You could potentially rack up more expensive credit card debt

The big appeal of credit cards is that they offer users a generous credit limit. However, they also have the highest APR of all credit lines. If you don’t pay the outstanding in full by the due date, you’ll get hit by high-interest rates and late payment fees. These costs can wipe out all other benefits that the card offers. In comparison, student loans have far lower interest and penalty rates. Using a more expensive credit line to pay off your lower-interest loans is just a bad idea. 

If you’re thinking of using your credit card just to buy you some time, make sure you have a water-tight plan to make that money by the payment due date. Because of the high-interest rates, missing even one credit card payment could send you into a debt spiral that’s difficult to get out of. 

3. You’ll damage your credit score

Credit utilization makes up as much as 30% of your credit score. Credit utilization takes into account the amount of credit you’ve used compared to your total credit. The lower your credit utilization, or the less you use your credit card, the more points you’ll add to your credit score. The opposite also holds true. Using your total available credit regularly can increase your credit utilization ratio and damage your score. 

When you use your credit card to pay student loans, your credit utilization is going to be high, causing your credit score to drop. This will have long-term repercussions. With a low credit score, you’ll find it difficult to qualify for most loans in the future. Even if you do qualify, you’ll almost certainly pay a higher interest rate on any money you borrow. 

4. Credit cards don’t have the same protections as student loans

All student loan providers, federal and private, offer some form of protection to borrowers. Federal student loans come with considerably higher protections as compared to private student loans but credit cards don’t have any. If you default on your student loans, you may be able to talk to your loan provider to explore a solution. For example, you may be able to apply for deferment or forbearance to tide you over the short term. 

However, if you default on your credit card payment, there are no options. The interest on your outstanding debt will keep getting added on till you’ll cleared the amount in full. This could add on hundreds of dollars to your total bill. 

Alternatives To Paying Student Loans With A Credit Card

As much as possible, you should avoid using a credit card to pay off your student loans. If you were considering this option because you don’t have cash on hand, there are several other less risky options you can avail of. 

Consider Repayment Plans

To make federal student loan payments more affordable, consider enrolling in one of the income-driven repayment plans. These plans cap your monthly payments at a percentage of your discretionary income so the payments are always affordable. If you’re unemployed, your payments will be zero dollars. Enrolling in this program also extends the length of repayment to 20 or 25 years, at the end of which your remaining loan balance will be forgiven. 

Consider Requesting Deferment

Request a deferment or forbearance if you need a break from payments because of financial hardship. All federal student loans qualify for unemployment deferment or forbearance. Many but not all private lenders offer these options. You’ll have to speak to your lender to explore your alternatives. One thing you should know is that interest will accrue on your outstanding during the pause. This will increase the total amount you owe in the long term but it can help you out in the short term. 

Refinance your student loans

Refinancing involves exchanging your current student loans for a new loan with a different interest rate. If you have improved your credit score, you may qualify for a lower interest rate than you’re paying now. Even a small drop in the interest rate can save you thousands of dollars in accrued interest over the life of the loan. Moreover, when you refinance, you can choose to increase or lower your monthly payments depending on your financial circumstances. Refinancing is definitely the best alternative to paying private student loans with a credit card, but only provided you qualify for a lower rate of interest. 

Do you need additional funds to pay for college? Check out our Student Loan Finder tool to find and compare loans from reputed lenders. 


Lender Rates (APR) Eligibility
Citizens logo.
6.98%-15.04%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.85% Variable
4.07% - 16.49% Fixed
Undergraduate and Graduate
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
Ascent company logo.
6.24% - 15.85% Variable
4.29% - 15.76% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 16.85% Variable
4.39% - 16.49% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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