Can you balance transfer college loans to CC?
- Thread starter halik
- Start date
Can you request a BT check from the CC company? You should then be able to make the check out to yourself, deposit it, and then use the funds to pay off the student loan.
Engineer
Elite Member
- Oct 9, 1999
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Yes, you can do that. Citibank usually has that option, but please note that many creditcard companies are now charging a 3% balance transfer fee with "NO LIMIT" so you're paying 3% up front just to get no interest for one year or so. Depending on your needs, that might not be a good deal.
I would read the fine print on those cards.
I have received Discover cards that have 1.9% APR for the life a BT, but the catch is that you have to have two purchases a month on that card to maintain the promo BT rate. The purchase APR was 12.99% and they had a stipulation that the lower APR balance gets paid off first. So, that can start costing you a heafty amount in finance fees to the CC rather then the Student Loan Agencies, which are tax deductible.
So read those offers REALLY carefully!
But i have done what you are talking about. I transferred all my private loans to CC's with 15-month 0% promo rates. Worked prefectly, you just have to be very aware and pay attention.
I have received Discover cards that have 1.9% APR for the life a BT, but the catch is that you have to have two purchases a month on that card to maintain the promo BT rate. The purchase APR was 12.99% and they had a stipulation that the lower APR balance gets paid off first. So, that can start costing you a heafty amount in finance fees to the CC rather then the Student Loan Agencies, which are tax deductible.
So read those offers REALLY carefully!
But i have done what you are talking about. I transferred all my private loans to CC's with 15-month 0% promo rates. Worked prefectly, you just have to be very aware and pay attention.
Have you taken tax deductions into consideration? You can deduct a certain amount ($2500? I forget how much) on your taxes if you pay student loan interest. I'm not sure if it would apply if you are paying a CC. Semantically you'd think it would, but in reality probably not.
Engineer
Elite Member
- Oct 9, 1999
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That depends on what the rate is. I've got $28,000 sitting on my credit card at zero percent interest for 15 months and it's earning between 3.5% and 4.75% interest for me. It all depends on the finance rate and whether you can pay it off or transfer it again before the promotional rate expires.
True, but only if you are making less than 50k/year. Anything more than that, the interest credit becomes pro-rated.
It all depends on the interest rate. Right now, student loan interest rates are pretty crappy. Stafford loans are at a fixed 6.8%, and the GradPLUS loans are a fixed 8.5%. Undergrad Stafford loans will be reduced down to a fixed ~3% over the next few years, but will then jump back up to a fixed 6.8% after that.
Private student loans are usually even worse.
About the only advantage I can think of for student loans is they allow you to put them in deferment under certain circumstances.
If you declare bankruptcy, student loans don't go away. Credit cards can? Not 100% on that, but student loans aren't exactly a better option at times.
And like Amped mentioned, if you make >$50k, the tax write-off is worthless. If you can save interest $$$ by moving stuff to a CC, it's worth it.
And like Amped mentioned, if you make >$50k, the tax write-off is worthless. If you can save interest $$$ by moving stuff to a CC, it's worth it.
How are they the worst? Not many people can finance 4+ years of school out of their own pocket. Working while in school may not be possible for some of the more demanding and time-consuming programs. At least with student loans you should hopefully have a useful degree and some experience to show for. Most CC debt is used to buy things like TVs that may provide enjoyment, but aren't going to provide any long-term benefits like a carefully-chosen degree would.
- Mar 20, 2000
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student loans cannot be discharged in bankruptcy (generally), however i'm pretty sure they would help you if you ever found yourself having to go through the means test in bankruptcy. it could be the difference between getting an easy chapter 7 and a long and drawn out 13.
the other thing is that, because they're not dischargable, student loans don't run to 28% when you're a day late with your payment, iirc.
the other thing is that, because they're not dischargable, student loans don't run to 28% when you're a day late with your payment, iirc.
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