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Is it a good idea to pay of credit card debt with student loans?
Question : Is it a good idea to pay of credit card debt with student loans?
I have some left over student loans and some credit card debt. I wonder if I should just save that extra in case I need it for some unforeseen thing or just pay off the cards?
debt loans
Best answer:
Answer by zekerkat
It’s up to you, but if it were me, I would wipe out the credit card debt because of the interest rates.
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#2 written by jason d 1 year ago
One time my wife paid off a HUGE personal loan she had for opening a business with student loan proceeds.
She didn’t have to pay the student loans while she was in school, which gave her the time to get the business really running, then paid them on really favorable terms.
WAY better to pay 6.9% that 15% of revolving on credit cards.
That having been said, you have no bankruptcy protection on student loans. In a real disaster, you could declare bankruptcy and start fresh, but if you’ve converted everything into student loans then they will stay with you no amtter what.
Only do the above if you are going to cut up the credit cards, though. You really don;t want to start recycling debt so you can accumulate ever higher balances.
Good luck
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#3 written by RICKY L 1 year ago
Interest rate on student loans are often at a low fixed rate and Interest Payments toward student loan are tax deductible, so it is more prudent to pay off credit card debt first. Do not attempt to keep a reserved cash amount when you still have a debt unless you are currently unemployed, in which case this cash amount can give you a safety cushion to make minimum payments against both loans.
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#4 written by wisegirl74 1 year ago
Personal Finances are 80% behavior and 20% math, so if you consolidate your credit cards you need to go ahead and cut them up and don’t use them again. stop depending on the credit card to bail you when you want something and don’t have the cash for it. That is the only way consolidating works otherwise, you will be back again with the debt and the student loan debt. It does not make sense to just move debt from one place to another. Try paying off your credit cards, stop shopping dining out and pay them out fast.
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Its never a good idea to pay off debt with another debt. Credit Cards and Loans are debts. However given the situation if it were me, I’d pay off the credit cards asap. Hopefully you have the type of loan that you can repay after you graduate from college. If you have to pay it off that way then do what you need to do, however once its done, never do it again. You don’t want to end up in a worse financial hole.
EDIT: btw, I don’t suggest cutitng up credit cards. Credit is a part of life. Just be responsible. Learn to trust yourself. It takes time learning how to be responsible with them but keep at least one credit card.
One day you will need your credit to buy a home of your own or anything else that you want to do that requires credit. A lot of jobs nowadays pull up your credit check, its their way of seeing if you have a good credit score. They figure, good score…good employee. Its their cheap way of doing a background check.