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I’ve graduated from college – twice.
You see, I wasn’t smart enough to listen to my parents the first time around. They urged me to pursue a major that would actually lead to a job. I stuck to my stubborn guns and graduated with a theatre major instead.
A few years into my acting career, I realized that I hated auditioning. I also hated being broke. Although theatre and film gigs pay really well when you’re famous, everybody else – especially those who are just starting out – needs a day job just to scrape by.
Faced with the combo of making peanuts and hating auditioning for new jobs, I decided to head back to school.
“But Greg, how did you pay for all these years of schooling?” you ask.
You guessed it – more student loans.
Destroying Your Student Loan Debt
Now, I’m not going to tell you that I was a hundred thousand dollars in debt after college. My student loan story isn’t that interesting or devastating. I didn’t have any servicing nightmares with FedLoan. I wasn’t forced to move back home. But, nonetheless, student loan payments were something that crippled me financially.
If you’re like I was, you’ve got thousands in student loan debt hanging around your neck. Those payments may seem normal, probably because almost everybody has them. But, it’s debt like this that could be holding you back from living your life to the fullest.
Think about it: What could you do with that extra $500+ a month that you’re currently paying toward your student loans? Think of all the money you could save if you didn’t have to make those payments. Buying a house, saving for retirement, or planning that trip to Europe you’ve always dreamed of could suddenly be within reach!
That savings is real money, and it goes directly into your pocket. In fact, saving is often easier (and better) than earning just a little more. That’s why I highly suggest destroying your debt as quickly as possible.
The faster you get rid of your debt, the more you’ll have to put toward meeting your financial goals. Consider using a process like the debt snowball and get started right away.
How to Pay Student Loans with a Credit Card
Now, based on the title of this piece, you’re probably wondering if you can pay student loans with a credit card.
Here’s the answer: Yes. Yes, you can.
“Wait, didn’t you just tell me to pay off my debt as fast as possible?”
I did and you should…but I also want you to make the most of your spending. Credit card rewards can help you do that.
When earned and used responsibly, credit card rewards can help you earn thousands in free travel, gift cards, and more. We’ve used them to travel the world for pennies on the dollar. They’ve helped us hit popular destinations like Paris, Rome, London, Jamaica, Aruba, and more – practically for free.
Now, with a balance as big as your student loans, it would be a shame if you didn’t take full advantage of it, right? Wouldn’t it be nice if there was a way you could pay off your student loans AND earn a ton of credit card rewards for doing it?
Unfortunately, your lender probably won’t let you pay down your student loan directly with a credit card. Thankfully, there is another option. It’s called Plastiq, and we think it is awesome.
Plastiq makes it easy to use your credit card to pay any type of bill. It’s especially useful for paying off big items like student loans and mortgages. Heck, we used it to pay off our mortgage, and we earned thousands in credit card rewards doing it.
It’s super simple to get started too. Just link a great rewards card to your Plastiq account, and direct Plastiq to make a student loan payment on your behalf. Your bill will get paid, and you’ll also earn credit card rewards for doing it.
How it Works
- Sign up for Plastiq using the code 671741.
- Add your rewards card to Plastiq.
- Add your bills.
- Direct Plastiq to pay your bills.
- Pay off your cards each month and earn rewards!
The Math Behind Using Plastiq
So, what’s the catch?
Well, there is a 2.5% fee for using Plastiq. While that’s not great, it isn’t a deal breaker either.
This is important: Under most circumstances, the 2.5% fee is not be worth it. You’ll pay more in fees than you’ll earn in return.
However, Plastiq is a great option for meeting minimum spending requirements on signup bonuses.
For instance, let’s assume you get a card that offers a $625 signup bonus after spending $4,000 over the first 3 months. That $4,000 can sometimes be a steep hill to climb, especially if you can’t pay your biggest bills with a credit card. This is where Plastiq makes a lot of sense.
The 2.5% fee equals $25 per $1,000 spent. So, by spending $4,000 on your card through Plastiq, you’ll earn $625 in travel while only racking up $100 on fees. That’s a net gain of $525 for you. I’d call that a big win!
The other option is to pay through Plastiq using fee free dollars. These can be earned by referring your friends and family to Plastiq, earning you $1,000 in fee free dollars per referral.
Speaking of which, get $500 in fee free dollars when you sign up for Plastiq using the referral code 671741. Get started here!
Keep in mind that this is only a good option if you pay off your credit cards every month.
When trying to score rewards, the last thing you want is to wipe out your gains by paying interest on your cards. Even worse, you don’t want to rack up more debt to do this, especially since the card almost certainly has a higher rate than the loan itself!
Remember, we’re trying to get ahead with this strategy, not fall further behind!!! Pay your cards off every month. That is not optional 😉
Which Rewards Cards Should I Get?
If you have student loan debt, want to earn rewards on your payments, and are thinking of using the Plastiq strategy, here are some rewards cards you might consider:
Chase Sapphire Preferred – The Chase Sapphire Preferred Card is almost always the first card we recommend. This card earns valuable Chase Ultimate Rewards points, offering a 60,000 point signup bonus when you spend $4,000 within the first 3 months. Those points are worth $750 in travel when redeemed through the Chase portal. Better yet, they transfer to Chase’s 13 travel partners for even more valuable redemptions.
There is a $95 annual fee, but the bonus points far outweigh the fee. If you’re new to rewards, this is the first card you should get.
The Platinum Card® from American Express – With the Platinum Card from AMEX, you’ll earn a welcome bonus of 100,000 Membership Rewards after spending $6,000 in the first 6 months. Additionally, during the same 6 months, the card earns 10x points on the first $25,000 in combined spending at restaurants around the world and when you “Shop Small” in the U.S. You also get a whole host of awesome travel rewards, including up to $200 in annual credits toward Uber, access to their global airport lounge collection, and much more.
The card does carry an annual fee of $695 (See Rates and Fees), but the welcome offer, benefits, and the credits should more than cover the fee – at least for the first year. Remember, this is a premium card offering premium benefits. If you travel a lot, it is definitely a good card to consider.
Paying Student Loans with a Credit Card: Final Thoughts
As you can see, to earn a valuable signup bonus, you often need to meet some stiff minimum spending requirements. Paying your largest bills with a credit card can boost your spending on the card, and Plastiq is a great option for doing that.
Remember, though, the 2.5% transaction fee can definitely cut into your earnings. That’s why it is usually best to use this strategy only when trying to meet minimum spending requirements for a signup bonus.
We hope these tips have been helpful. Good luck and happy traveling!
To see rates and fees for the American Express cards mentioned here, please use the following links: American Express Platinum Card: See Rates and Fees.