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Started By
Message
Transfer student loans to Credit Card
Posted on 2/28/12 at 10:03 am
Posted on 2/28/12 at 10:03 am
I am pre-qualified for a Capital One Credit Card 0%Intro APR until May 2013; 0% Intro APR Transfer; $0 Annual Fee
Would it be wise to move $5000 worth of student loans with 6% interest to the card? The card WILL be paid off before May 2013.
Would it be wise to move $5000 worth of student loans with 6% interest to the card? The card WILL be paid off before May 2013.
7
Posted on 2/28/12 at 10:05 am to Hdstng09
quote:
The card WILL be paid off before May 2013.
playing with fire to save a couple hundred bucks
Posted on 2/28/12 at 10:09 am to TortiousTiger
quote:
playing with fire
That's what I told the "adviser" lady when I went to upgrade my checking account. But then it got me thinking.
This post was edited on 2/28/12 at 10:10 am
Posted on 2/28/12 at 10:17 am to Hdstng09
They are reeling you in. They do this because more times than not it doesn't get paid off and they make money. You may be the exception, but if it will be paid off in a year, that 6% interest isn't going to be a big deal anyway.
Posted on 2/28/12 at 10:19 am to Hdstng09
lots can happen in a year.
you dont pay it off, you're stuck with a 19.9% compounding APR, at the minimum.
you dont pay it off, you're stuck with a 19.9% compounding APR, at the minimum.
This post was edited on 2/28/12 at 10:21 am
Posted on 2/28/12 at 10:25 am to Hdstng09
quote:
Hdstng09
This is a terrible idea. Do not do it.
If you only made minimum payments until paying it all off in 2013, you are talking about $300, that's worst case. If you pay it off aggressively, you are talking about less than $300.
Posted on 2/28/12 at 10:32 am to Hdstng09
What kind of student loans are they? All of my loans require you to use a bank account, I just assumed they were all like that.
Posted on 2/28/12 at 10:46 am to kfizzle85
quote:
All of my loans require you to use a bank account, I just assumed they were all like that.
I have too many.
all allow me to pay via credit card, which I do to rack up the points.
Posted on 2/28/12 at 10:53 am to MediTiger
quote:
if it will be paid off in a year, that 6% interest isn't going to be a big deal anyway.
This
Posted on 2/28/12 at 10:54 am to Hdstng09
I don't think you can do a balance transfer on a govt sponsored Direct Loan. Maybe an old Sallie Mae loan you can. If the card sent you those cashable checks, then you might could pull it off.
And if it is a Direct loan, it's only 6.5%. That's quite a risk to save .5%.
And if it is a Direct loan, it's only 6.5%. That's quite a risk to save .5%.
This post was edited on 2/28/12 at 10:55 am
Posted on 2/28/12 at 12:58 pm to TortiousTiger
quote:
you dont pay it off, you're stuck with a 19.9% compounding APR, at the minimum.
Not so fast, it's entirely possible he can just roll it over to another card with a teaser rate. Plus, someone with a year of timely payments can usually get a lower rate just by asking for it.
That said, it is not risk-free. When the OP says it WILL be paid off in time, he needs to be aware there is always "that chance". Whether it is worth it or not I guess depends on how much money it would really save.
Posted on 2/28/12 at 1:00 pm to Hdstng09
@OP - read the fine print, usually those APR transfers have a transfer fee included, often it is around 3% of the amount transferred, which to me would not make it worthwhile.
Posted on 2/28/12 at 1:04 pm to foshizzle
Exactly on the transfer fee. I've seen 4% more regularly than 3% as of late. If you look at holding the debt for 1 year, that's a savings of $100-$150 max.
Posted on 2/28/12 at 1:31 pm to Hdstng09
Make sure there is no transfer fee to the credit card. Some banks hide that fee in the fine print after all the "0%" sales hype.
ETA: I just re-read your OP and saw the "0% transfer" part. I suggest you confirm that with the bank before you make the transfer. Sometimes the no fee for transfers only applies if you are transferring an existing balance from a competitors credit card and it may not apply in your case of student loan balances.
ETA: I just re-read your OP and saw the "0% transfer" part. I suggest you confirm that with the bank before you make the transfer. Sometimes the no fee for transfers only applies if you are transferring an existing balance from a competitors credit card and it may not apply in your case of student loan balances.
This post was edited on 2/28/12 at 1:34 pm
Posted on 2/28/12 at 3:57 pm to LSURussian
I read the OP as 0% APR on transfers, but no mention of whether there is a transfer fee to do so.
Posted on 2/28/12 at 6:08 pm to foshizzle
quote:
I read the OP as 0% APR on transfers, but no mention of whether there is a transfer fee to do so.
So did I on the account of it's damn hard hard to find a true 0% BT. Most these days have a minimum fee or 3% of the transferred balance, whichever is greater.
Posted on 2/28/12 at 7:40 pm to Guster
If you ever have to declare bankruptcy a credit card can be written down; a student loan cannot. It will be with you til you die.
Posted on 2/28/12 at 8:41 pm to Captain Want
Definitely playing with fire, but if you do it effectively, it could save you a few hundred dollars.
If you can't pay the student loan with the CC, you can just put all your expense on the CC, then use the cash to pay the loan.
When the credit card is a few months from being done with the teaser rate, find another one with a teaser rate and start spending on that one, while using the cash you pile up to pay down the old one.
Unless you are very much on top of your finances, this will probably end up poorly, especially if you screw up an miss a payment and start getting hit with penalty APR.
If you can't pay the student loan with the CC, you can just put all your expense on the CC, then use the cash to pay the loan.
When the credit card is a few months from being done with the teaser rate, find another one with a teaser rate and start spending on that one, while using the cash you pile up to pay down the old one.
Unless you are very much on top of your finances, this will probably end up poorly, especially if you screw up an miss a payment and start getting hit with penalty APR.
Posted on 2/28/12 at 9:41 pm to TheHiddenFlask
quote:
If you can't pay the student loan with the CC, you can just put all your expense on the CC, then use the cash to pay the loan.
When the credit card is a few months from being done with the teaser rate, find another one with a teaser rate and start spending on that one, while using the cash you pile up to pay down the old one.
Do Not Want
Even if this worked, it sounds like way more work than just getting a few hours overtime to make up a couple hundred dollars.
Posted on 2/28/12 at 10:21 pm to TortiousTiger
Well myfedloan.org and SallieMae don't.
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