Now more than ever, student loan debt preoccupies a relatively large chunk of a young college graduate’s monthly budget. If you’re working a job that pays too little, then you may be struggling to make student loan payments on top of basic living expenses.
If you are in this category and are stretched thin, you may wonder whether you can make a student loan payment with your credit card. Typically, a student loan payment comes directly out of your checking account, or you can mail a check to your student loan servicer. So, is a credit card payment to a student loan account even possible?
The easy, short answer is no. But it’s not actually that simple. While servicers don’t allow you to pay directly with your credit card, there are workarounds.
How to Use A Credit Card
Many credit cards allow you perform a cash advance. A cash advance is an ATM or over-the-counter transaction where you can withdraw cash. You are able to withdraw any amount of cash up to your credit limit, which may be enough to cover a few hundred dollars.
Taking this cash, you should be able to deposit it into your bank account and send a check to your student loan servicer.
As you can see, it’s possible to use a credit card. However, if you know anything about credit cards, it should also sound incredibly risky! Keep reading to figure out why. There are pros and cons to the solution; it’s important to understand both.
Are There Any Advantages?
There is only one major benefit of using a cash advance to pay a student loan. That benefit is being able to stay current on your payments. In other words, you won’t have to worry about a late fee from your student loan servicer. Furthermore, you can avoid any negative marks on your credit profile as a result.
If you are short on cash and can’t make your student loan payment, then maybe a credit card solution is worth considering. However, while there is one positive to this solution, there are various drawbacks that need to be kept in mind.