How I Earned a Ton of Points Paying Off My Student Loans

Let’s face it: paying student loans sucks. But if you’re stuck doing it anyway, you might want to consider getting some points while doing it. Credit cards, like fire, are a useful tool and can also really hurt you. I just paid off one of my student loans that had deferred interest because I didn’t want to be back charged all of the interest from the past four years and I was able to earn a bunch of points doing so! Below I’ll share with you why you might want to do this, as well as how I earned my points.

Why to Consider This

Responsibly paying your student loans with a credit card can be a great way to earn extra points. This can be especially valuable if you’re working toward a signup bonus, where every dollar of minimum spend counts. If you’re willing to pay some fees, this can also be a quick and easy way to put additional spending on your card.

Be Financially Responsible

It should go without saying, but it’s critical to be financially responsible when considering whether to pay student loans with a credit card. The most important thing to avoid is putting yourself into a situation where you pay more interest than you otherwise would. Credit cards usually charge high-interest rates (much higher than your student loan) so shifting this debt to a credit card is probably a bad idea. However, if you always pay your statement balance in full by the due date, you won’t typically pay any interest.

If you are in a financial jam, it can be especially tempting to reach for a credit card to make your student loan payment. However, many options are available to reduce or defer your student loan payment if you suffer a life event such as a job loss. These tools don’t exist for credit cards, and credit card lenders are unforgiving. Focus on your financial health first; you can dive back into the points game later when you’re ready.

Coding as a Purchase

The best way to pay a student loan with a credit card is in a way that codes as a purchase. This helps avoid fees. Unfortunately, this is also tough to achieve because student lenders do not accept credit card payments anymore. However, if some of the money you owe was borrowed directly from your school, it’s possible that they will accept payment with a credit card. Even if this isn’t offered as an obvious option, it’s worth calling to ask. In fact, this is a good practice with any bill you receive; you’d be surprised how many places take credit card payments over the phone!

Credit card payments made directly to a school should code as a purchase on your credit card, meaning you won’t pay any extra fees. If paying directly isn’t an option for you, you still have other choices.


If you can’t pay your student loan servicer with a credit card directly, you can sign up for Plastiq and pay through their service. It’s possible to pay almost every student loan this way. The upside of doing this is that it’s a quick and easy way to get some extra points, which can be especially useful if you’re looking to get over the hump and meet minimum spend for a bonus. The downside is fees – Plastiq charges 2.5% of your purchase, and time – Plastiq can require an extra 7-10 days for your payment to reach your lender.

I used Plastiq to pay my loan because I could not pay it directly with a credit card. My loan payment completely covered the minimum spending requirement for my Hilton Honors Aspire credit card, so I earned a whopping 150,000 Hilton Honors points from the sign-up bonus plus an additional 16,500 Hilton Honors points from the spending. I’m saving my Hilton points up for a luxurious redemption in 2020 so these points are going to end up being worth close to $2,000! That’s a pretty big bonus. I paid $137.50 in service fees to Plastiq to make this payment because I didn’t have any Fee Free Dollars (FFDs). If you sign up with Plastiq through my link, you can get 500 FFDs so you won’t have to pay the 2.5% fee on your first $500 in payments.

Methods to Avoid

Your credit card issuer may send you checks, which often come with attractive offers (such as 0% interest for 12 months with a 2% transfer fee). Watch out, it’s a trap! If you write a check it’s not considered a purchase. This means that it won’t earn points. If you get an offer like this on a card that earns points, only take the offer if you don’t need the points, have already met the minimum spend and intend to “sock drawer” the card afterward, and can pay the card off in full before your 0% interest period ends.

Bottom Line

If you’re smart about paying your student loans with a credit card, you can earn some extra points or work toward a minimum spend. If you aren’t, it can cost you a lot more than the points are worth.

Have you ever paid your student loans with a credit card?


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