Can You Pay Student Loans With A Credit Card?

You can pay student loans with a credit card but there are some things to consider. Find out what you need to pay student loans with credit card.
Tebid Kelly
can you pay student loans with a credit card

Yes, you can pay student loans with a credit card but however, you'll likely need a third-party service to do so.

Even yet, the possibility for rewards exists, and there are other advantages to using plastic to pay your expenses.

However, there are three disadvantages to using a credit card to pay off your student debts.

When you pay your bills using a credit card, you're exposing yourself to a lot higher interest over time, among other things.

It's probably not a good idea if you don't have enough money to pay off your credit card bill in full after making a student loan payment with a credit card.

The typical credit card interest rate is above 16 percent, whereas many student loans (including federal and private student loans) have interest rates below 5%.

In this article, we'll cover the potential risks and benefits of paying student loans with a credit card, as well as a few tips to pay student loans with a credit card if you do decide to move forward with such a plan.

Table of Contents

The Risks of Paying Student Loans With a Credit Card

Paying off your student loan debt with a credit card may provide challenges from the start. To begin with, credit card payments are not accepted by government student loan servicers or many private lenders.

You may not be able to cover all of your student debt using a credit card, depending on how much you owe and how high your credit limit is.

"Don't replace student loan debt with credit card debt—it can be a much more expensive way to finance your education," the Consumer Financial Protection Bureau (CFPB) advises.

Before you pay your student loan bill with a credit card, be aware of the following big drawbacks:

Losing Money to Fees

Most credit card companies will not allow you to pay your student debts using a credit card.

As a result, you'll have to think outside the box when it comes to paying with plastic, and you may need to enlist the help of a third party to complete the transaction.

Fees charged by third parties might increase the amount you owe and cancel out any savings you might have gotten by not paying directly.

Racking up considerable debt

If you rely on credit too much, you may find yourself with unmanageable credit card debt.

Because the typical credit card APR is so high, you risk starting a debt spiral that will be difficult to break.

Potential damage to your credit score

Your credit usage rate accounts for 30% of your FICO score, and accumulating debt on revolving accounts (such as credit cards) can quickly raise this rate, lowering your credit score.

Missing out on tax deductions and benefits

Paying your federal student loans directly also has benefits that you could miss out on if you pay them off through a credit card.

On your federal income tax returns, you can deduct up to $2,500 in student loan interest, reducing your overall tax burden.

If your modified adjusted gross income (MAGI) exceeds certain IRS thresholds, you may not be eligible for this deduction.

Consult an accountant before changing your loan to a credit card, as interest payments on personal credit cards are not tax deductible.

Losing consumer protections for federal student loans

Deferment and forbearance options are available for federal student loans in the event of financial difficulty. You can also adjust your repayment plan if you are unable to repay your loan.

An income-based repayment plan, which is an alternative to federal student loans, offers variable payments based on your income, which is ideal for recent graduates who are job seeking or using the gig economy while looking for work in their field of study.

Potential Benefits of Paying Student Loans With a Credit Card

The advantages of paying off your student loans using a credit card differ from person to person, but here are some of the most important ones to consider:

Earn rewards on your spending

When you pay for student loans and other payments using a rewards credit card, you can accrue points and miles for your purchases.

Just keep in mind that any costs you pay will reduce the amount of incentives you earn.

Buy time before your payment is due

When money is tight, paying using a credit card can buy you some time until you need to make a payment, which can be beneficial.

Secure zero percent APR for a limited time

Paying eligible student debt with a credit card may help you save money on interest if you can get a 0% intro APR.

You might save money if you pay your student loan with a credit card and then pay off the debt during the intro APR period.

Can You Pay Student Loans With a Credit Card?

Yes, you can pay student loans with a credit card using a third-party service.

However, this will also depend on the type of loan that you have.

Can You Pay Federal Student Loans With a Credit Card?

For any federal student loans, the Department of Education does not accept credit card payments. However, this does not rule out the possibility of using a credit card to pay off your federal loans. You can achieve this in a number different ways:

  • You might be able to use a third-party service. Plastiq, for example, enables you to pay nearly any service provider with a credit card. This covers servicers of federal student loans. To utilize these services, you will have to pay a fee, which is calculated as a percentage of the transaction. Depending on the service, the charge can be rather significant. It will almost always be more expensive than any credit card benefits you might obtain.
  • You might get a cash advance on your credit card. This enables you to get cash from your credit card by using an ATM or writing a check. Cash advances, on the other hand, frequently come with a high interest rate and a fee. This is an extremely costly alternative, and any credit card rewards you earn would be very low in value relative to the cost of a cash advance.
  • A balance transfer is an option. Rather than asking you to transfer the balance to the card directly, some credit card providers will give you balance transfer checks. One of these checks could be used to make a student loan payment. While there is always a cost for transferring a balance, the fee is usually reasonable, and you may be eligible for a 0% promotional interest rate on a balance transfer card. However, the 0% rate is usually only available for a limited time — around 12 to 15 months — and interest rates may be very high once the promotional period ends.

While the answer to the question of whether or not you can pay student loans using a credit card is yes, there are a few downsides to each of the methods that you can use to accomplish this goal. 

Can You Pay Private Student Loans With a Credit Card?

Some private student loan lenders accept credit card payments directly. If you do so, they will almost always charge you a transaction fee.

This may be more costly than the value of any incentives you receive.

If your private student loan lender does not allow you to pay using a credit card, you still have the same three options as for federal loans.

You have the option of paying through a third-party service, arranging a balance transfer, or getting a cash advance.

Should You Pay Your Student Loans With a Credit Card?

The big dilemma for borrowers isn't whether or not they should pay off their student loans with a credit card. Making this decision has both advantages and disadvantages.

Paying your student loans using a credit card may make sense if you can lower your interest rate by transferring the debt and pay off the balance before your 0% introductory rate expires.

If you can't come to an agreement with your lender, making a single loan payment with a credit card to purchase time and avoid a late payment can make sense (such as putting loans into deferment or forbearance).

In most situations, however, the cost of paying off student loans with a credit card makes this an unappealing option.

In most circumstances, you will be required to pay upfront costs.

Remember that if you don't pay off your credit card debt in full by the time the balance is due, you'll be charged interest.

The credit card interest rate could be significantly greater than the rate you're paying on your student loan right now.

What to Consider When Paying Student Loans With a Credit Card

There are fees and risks to think about. If you still think it's the best option, there are some scenarios when using a credit card to pay off student loan debt makes sense.

One is whether you will be able to pay off your student loans before an introductory APR period expires.

However, depending on the size of your debt, you may not be able to pay it off within your credit limit. Remember that when you do a balance transfer, you may be eligible for a zero percent interest period.

You're effectively giving yourself a grace period during which you won't be charged interest on your student loans.

And it might make paying it off in full a lot easier. It's vital to keep in mind, however, that not all balance transfers have introductory or promotional rates.

A rewards credit card could be beneficial as well. Some credit cards allow you to apply your points as statement credits to your account balance.

If you pay off your loan in full within the promotional time, you may be able to pay it off sooner.

Keep in mind that if you continue to make payments on the transferred loan after the promotional time ends, any points you earn may be overwhelmed by credit card interest.

However, the possible benefits must be weighed against all other factors. Here are some things you can do to put yourself in a better position to make a decision:

  • Understand terms and fees: It doesn't matter if you use a third-party service, a balance transfer, a cash advance, a convenience check, or any other way. Make sure you're aware of the potential costs of using your credit card.
  • Make sure the dates are correct: Make sure you are aware of important dates in addition to the terms and prices. When your student loan debt will be transferred to your credit card, when promotional rates expire, and when your monthly payments are due are all examples of this.
  • Make a financial plan: You can use this information to determine how you'll manage your debt after you have the terms and dates straight. The Consumer Financial Protection Bureau (CFPB) gives budgeting suggestions that may be useful. Budgeting can assist you in planning your payments to avoid paying interest that you might otherwise have to pay.
  • Find the right card: Keep in mind that interest charges can have a significant impact on the amount you repay. Consider doing some study if you're looking for a new card. Depending on how you manage monthly payments, finding a card with a low introductory rate and a low regular rate could help you save money. Checking to see if you're pre-approved before applying for credit will give you an indication of whether your application will be accepted.
  • Make responsible use of your card: Make sure you understand how interest is computed if you're not using your card for school debt. New purchases, for example, may not be eligible for a special rate. Using your card responsibly also means doing things like not maxing out your card, only applying for or using the credit you need and making at least the minimum payment by your due date every month.

How to Pay Your Student Loans With a Credit Card

Despite their numerous downsides, credit cards can be used to pay for student loans and other expenses that are not normally covered by credit.

There are, however, some more measures you'll need to follow.

Here are some examples of how you can use a credit card to pay off student loans:

1. Use a third-party payment system like

If you wish to pay your upcoming loan bill using a credit card, you can do it through a third-party company like

This digital solution allows you to use your Visa, Mastercard, American Express, or Discover card when plastic isn't accepted.

However, you will be charged a fee (up to 2.85 percent) to use the service. Plastiq will send a check to your student loan servicer in the amount you requested after they receive your payment.

Keep in mind that, because of the cost on each payment, you'll need to earn more in rewards to be "ahead."

2. Get convenience checks from your card issuer

If your student loan provider does not take credit cards, you may be able to utilize convenience checks from your credit card issuer, which are recognized as a cash advance but function similarly to a regular bank check.

You can request convenience checks from your credit card provider, who will mail them to you.

Fill in information such as the recipient's name (your loan provider), payment amount, date, and signature, then mail the check to your student loan provider, just like any other check.

It is cashed by your supplier and shown as a charge on your credit card statement.

You can also take out a cash advance with your credit card and then use that money to pay your student loan bill.

Remember that taking out a cash advance, whether through an ATM or those convenient convenience checks, comes with substantial costs.

Not only that, but cash advances usually have a higher interest rate, making this a more costly option (and less attractive).

Final Thoughts

It is possible to pay off your student loans with a credit card, but there are many factors to consider. And, with so many possibilities, you should weigh them all before making a decision.

Also, consulting a financial advisor is usually a smart idea. If you make a hasty decision, you may wind yourself paying more than you would have otherwise.


About the Author

Tebid Kelly
I'm Tebid Kelly, A Content Creator, Video Producer Financial Consultant and Certified Google Publisher. I write contents for, which are my two blogs.

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