Can You Use A Credit Card To Pay Off Your Student Loans?

April 13, 2021 · 3 minute read

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Can You Use A Credit Card To Pay Off Your Student Loans?

Making student loan payments with a credit card can be tempting. After all, if your credit card offers you rewards like points or miles, by putting your student loan payments on your card, you could be cashing in on points and scoring a free flight to Vegas, right?

On the flip side, you might be looking for a way to make your monthly student loan payment during a month when your checking account isn’t quite as full as you’d like.

So is it even possible to pay down your student loans with a credit card? The short answer is yes, but make sure you have all the information.

Can I Make a Student Loan Payment With My Credit Card?

Paying your student loans with many credit cards can be more complicated than charging dinner with your favorite food-delivery app.

Federal student loan servicers as a rule do not allow credit card payments directly. Payments have to go through a third-party platform, for a fee. If private student loan companies allow credit card payments, they may also charge a transaction fee.

Unfortunately for phone-hating millennials, the best way to make a student loan payment with your credit card is to call your student loan servicer and ask if it’s an option. Some allow credit card payments in certain situations, such as if it’s the last day before your payment becomes overdue.

And then there are credit cards that welcome payments on certain student loans. Stay tuned.

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Is Using a Credit Card to Pay on a Student Loan a Good Idea?

Even if your student loan servicer accepts credit card payments, the practice could have downsides.

First of all, your credit card likely has a higher interest rate than your student loans. In other words, you might end up paying even more interest on your loans by using your credit card.

So while racking up those credit card points can seem enticing, they might not be such a great deal if you’re paying more on your student loans in the long run.

You might want to also consider your credit score. Your credit usage makes up 30% of your FICO® score. Typically, you don’t want to use more than a third of the credit available to you. If you put a large student loan payment on your credit card, you might use a bigger chunk of your available credit, bringing down your credit score.

On top of the credit risks, if you’re unable to keep up with your student loans, using a credit card to pay them down could land you with student loan and credit card debt.

Is There a Better Way to Manage Student Loan Debt?

If you feel like you’re going to fall behind on student loan payments, using a credit card isn’t your only option.

If you have federal student loans, income-driven repayment plans are intended to make payments more affordable.

A Direct Consolidation Loan could lower your monthly payment by giving you up to 30 years to repay your federal student loans.

If you’re not able to make your monthly payments, you could ask your loan servicer about forbearance or deferment, both of which pause payments until your financial situation improves. (Of course in 2020-21, there was an extended period of government forbearance, when payments and interest were waived.)

You could also consider refinancing your student loans with a private lender. Refinancing consolidates student loans into a new loan, one ideally with a lower interest rate and a more favorable loan term.

The Takeaway

Can you make student loan payments with a credit card? Yes, either in a roundabout way or directly. Should you? It just depends. Being informed about the pros and cons is key.

Here’s a pro: SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1

The SoFi card is designed to help you save, invest, or pay down your eligible SoFi debt.

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You will need to maintain a qualifying Direct Deposit every month with SoFi Checking and Savings in order to continue to receive this promotional cash back rate. Qualifying Direct Deposits are defined as deposits from enrolled member’s employer, payroll, or benefits provider via ACH deposit. Deposits that are not from an employer (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and bank ACH transfers not from employers) do not qualify for this promotion. A maximum of 36,000 rewards points can be earned from this limited-time offer. After the promotional period ends or once you have earned the maximum points offered by this promotion, your cash back earning rate will revert back to 2%. 36,000 rewards points are worth $360 when redeemed into SoFi Checking and Savings, SoFi Money, SoFi Invest, Crypto, SoFi Personal Loan, SoFi Private Student Loan or Student Loan Refinance and are worth $180 when redeemed as a SoFi Credit Card statement credit.

Promotion Period: 4/18/2022-6/30/2022

Eligible Participants: All new members who apply and get approved for the SoFi Credit Card, open a SoFi Checking and Savings account, and set up Direct Deposit transactions ("Direct Deposit") into their SoFi Checking and Savings account during the promotion period are eligible. All existing SoFi Credit Card members who set up Direct Deposit into a SoFi Checking & Savings account during the promotion period are eligible. All existing SoFi members who have already enrolled in Direct Deposit into a SoFi Checking & Savings account prior to the promotion period, and who apply and get approved for a SoFi Credit Card during the promotion period are eligible. Existing SoFi members who already have the SoFi Credit Card and previously set up Direct Deposit through SoFi Money or SoFi Checking & Savings are not eligible for this promotion.

New SoFi Checking and Savings customers and existing Checking and Savings customers without direct deposit are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 30-day period. Cash bonus will be based on the total amount of direct deposit. Entry into the Program will be available 4/5/22 to 5/31/22. Full terms at SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC.

SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances. There is no minimum direct deposit amount required to qualify. Members without direct deposit will earn 0.70% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 04/05/22. Additional information at

1See Rewards Details at
SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1
*See Pricing, Terms & Conditions at
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