As tuition prices continue to rise, so do popularity of student loans and the amounts people are borrowing. When you graduate from college and your loans come due, it can be daunting to think about paying back such a large sum. It isn’t surprising that many people wonder, “What is the best way to pay off this debt?” You may have heard that some people pay off student loans with a credit card, but before venturing that route, consider a few things first.

There are different kinds of credit, sometimes to referred to as good credit and bad credit. What this really means is that there is necessary credit and unnecessary credit. Necessary credit is for things like your car and your house – you need these things to live and probably don’t have the money to buy them outright. Unnecessary credit is for things like a trip or a new TV, which are best to save up for and purchase outright.

When looking at your overall financial situation, is it best to prioritize paying off unnecessary debts first, since they are likely to have higher interest rates and do not retain value. For example, your house retains its value, so if you sell it you could potentially make enough money to pay off the balance of your mortgage and have some leftover. However, if you decide to sell your TV, you are unlikely to receive its original value.

Student loans fall into the necessary debt category. Consider the payments you made to your college or university as an investment in your future. While it may seem tempting to bundle these loans with a credit card, student loans typically have fixed, low rates. This means your interest rate won’t change over time. Something that many credit cards with low rates do not offer.

Overall, it is best to keep your student loans as they are. If you have debt besides what is considered necessary debt, focus on paying that off first, and then you can use the money from those payments and apply them to your student loans when you can.

If you are determined to pay off your student loans quickly, the best option is to transfer the balance to a zero-interest credit card. Only pursue this option if you know you can pay off the total balance before your zero-interest period ends. If you cannot pay off the remainder of the balance before the deadline, you will most likely face higher interest rates than you did with your original loan.

Before you make any large financial decisions, it is important to do your research, and it is best to talk to a certified financial advisor. Often, universities offer financial education resources and classes to students. Pursue some of these options before deciding to pay your student loans with a credit card.

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