Everyone knows that in order to pay off student loans, you need to cut expenses so that additional cash can be devoted to student debt. One way to do this is to minimize your use of credit cards so you do not spend money unnecessarily and rack up additional debt. As mentioned previously on this website, I did not apply for a credit card until later in my student debt repayment journey, so I could minimize the temptation to spend money. However, with some careful planning, credit cards can help you pay off student loans.
Throughout much of my adult life, people told me that I should have credit cards. I was told that credit cards could help me build credit, and it was important to have a credit card in case of an emergency. However, I did not use credit cards until my late 20s. Paying off student loans was enough to boost my credit score, and I always had money saved up in case of an emergency.
It was only later in my student debt repayment saga that I realized that credit cards can help you pay off student loans. In the last year or so of my student loan journey, I took a job that required me to travel extensively. In fact, I spent 70 or so nights in hotels each year I was at that job, and I spent even more time out of the office attending court or depositions in my immediate area.
In order to travel for work, I had to book expensive airfare, rental cars, meals, and everything else I had to spend money on while traveling. It was not uncommon for me to spend around $2,500 a week on business travel, and sometimes, I would spend even more than this to travel to more remote locations.
Unlike some businesses, my employer did not give us corporate credit cards we could use to book travel. Rather, our employer expected us to book travel with our own credit cards, and then we would be reimbursed for the expenses. I guess my employer did not trust us to use a credit card tied to the firm, but fortunately, this system showed me how credit cards can help you pay off student loans.
Originally, since I did not have a credit card, I put everything on my debit card and got reimbursed after submitting my receipts. Fortunately, I saw the folly in using debit cards pretty quickly and I applied for my first credit card. Eventually, I made sure to have two credit cards, one that I used for personal expenses, and one that I used for business travel. This helped me keep all of my expenses separate in my head, and ensured that I submitted the proper receipts for reimbursement.
As many people know, credit card companies typically offer points for every purchase that cardholders make. These points can be redeemed for a variety of useful items, and can even be redeemed for cash back. As a result, the more you use your credit card, the more money you could actually make, so long as you made sure to pay off the credit card on time.
It didn’t take long for me to realize how credit cards can help you pay off student loans. Since I spent around $2,500 some weeks on business travel expenses, some months I would charge around $10,000 onto my credit cards. The cash back option for many credit cards usually gives cardholders one percent or more cash back for all of the charges they make on the card. As a result, I would make around $100 a month just by using my credit card and selecting the cash back option.
Credit cards can help you pay off your student loans by also providing you with points to buy items. Sometimes, credit card companies will offer gift cards and other items for more value than merely providing cash back. Oftentimes, if I saw something that I wanted was being offered, I would redeem my points for these items. This allowed me to save money I otherwise might have spent purchasing such items, and I could devote this money to my student debt.
There are a number of different credit cards you can buy to play the “points game,” and I do not profess to be an expert at this. Also, I never wanted to pay money to purchase a credit card, and many credit cards with generous rewards programs require an annual fee. As a result, while paying off student loans, I got a a Chase Freedom card, since there was no annual fee. If you click on the link to obtain this card yourself, I may receive a bonus that I can use to keep the lights on here at Student Debt Diaries! There are a ton of resources online about picking the right credit card, and the amount of annual fees and the number of points you can obtain are all factors that should be considered.
In the end, credit cards can help you pay off student loans, and student debt borrowers should not fear credit cards as much as I did when I first started my student debt journey. Indeed, if you pay off credit cards on time, you can use credit cards to earn cash back or other rewards. These benefits can increase the amount of money you have to devote towards paying off your student loans.