Pay your student loans with a credit card and earn rewards along the way
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Whether you’re a fairly recent graduate or decades out of school, chances are you’re probably still paying off student loans. With Americans carrying more than $1.6 trillion in combined student loan debt, student loan payments are a pretty substantial monthly expense for a lot of people. And since it’s almost impossible to discharge student loans like other debts, earning rewards on these payments is a small bit of relief.
If you’re able to pay your student loans with a credit card and earn rewards, we’re here to show you which cards are best for that.
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Best cards to pay your student loans
- Bank of America® Premium Rewards® credit card — Best for Bank of America customers
- Chase Freedom Unlimited — Best for those with a Ultimate Rewards-earning credit card
- The Blue Business® Plus Credit Card from American Express — Best for flat-rate Membership Rewards points
- Capital One® Venture® Rewards Credit Card — Best for flexible rewards
- Citi® Double Cash Card — Best for flat-rate cash back
- Amex Everyday® Preferred Credit Card from American Express — Best for frequent card users
- Capital One® VentureOne® Rewards Credit Card — Best for earning Capital One Rewards with no annual fee
Comparing the best credit cards for student loan payments
|Credit Card||Best For||Rewards Rate||Annual fee||Welcome bonus|
|Bank of America Premium Rewards credit card||For Bank of America customers||2 points per dollar on travel and dining
2 points for every $1 spent on grocery store purchases- now through 12/31/21.
1.5 points per dollar spent on all other purchases
|$95||50,000 bonus points after you make at least $3,000 in purchases in the first 90 days of account opening|
|Chase Freedom Unlimited||Best for those with a Ultimate Rewards-earning credit card||Unlimited 1.5% cash back||$0||$200 bonus after spending $500 in their first three months.|
|Blue Business Plus Credit Card from American Express||Best business card for earning Membership Rewards||2x points on the first $50,000 in purchases each calendar year
1x points thereafter
|$0 (see rates and fees)||No welcome bonus|
|Best for flexible rewards||2x miles per dollar on every purchase||$95||50,000 bonus after you spend $3,000 within the first three months from account opening|
|Citi Double Cash Card||Best for flat-rate cash back||2% cash back on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases||$0||No welcome bonus|
|Amex Everyday Preferred Credit Card||Best for frequent card users||3x points on up to $6,000 spent annually at U.S. grocery stores
2x points at U.S. restaurants
1x points on all other spending
50% extra points when you use your card 30 or more times in a billing period.
|$95||Earn 15,000 Membership Rewards points after you spend $1,000 in your first three months|
|Capital One VentureOne Rewards Credit Card||Best for earning Capital One Rewards with no annual fee||Earn unlimited 1.25 miles per dollar on every purchase||$0||Earn 20,000 bonus miles after you spend $500 on purchases within the first three months|
The information for the Amex EveryDay Preferred cards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Annual Fee: $95
Sign-up bonus: 50,000 bonus points after you make at least $3,000 in purchases in the first 90 days of account opening
Reward rates: 2 points per dollar on travel and dining; 1.5 points per dollar spent on all other purchases. Plus, earn 2x points for every $1 spent on grocery store purchases- now through 12/31/21.
Why we like it: The Bank of America Premium Rewards credit card is a great option for paying your student loans because it earns 1.5 points per dollar spent. If you’re a Bank of America Premium Rewards member, you’ll earn 25%-75% more bonus points, meaning your student loan payments could earn you up to 2.62 points per dollar spent. You can redeem points at a rate of one cent each, making the 50,000-point welcome bonus worth $500.
While this card does carry a $95 annual fee, it’s completely offset by an up to $100 airline incidental statement credit issued annually. Cardholders also qualify for a up to $100 Global Entry/TSA Precheck credit every four years, which is rare for a card with a $95 annual fee. Normally, credits like these are offered by cards with annual fees of $450 and up, which is why the Bank of America Premium Rewards Credit Card is so unique.
Read our review of the Bank of America Premium Rewards credit card.
APPLY HERE: Bank of America Premium Rewards credit card
Annual Fee: $0
Sign-up bonus: Earn $200 bonus after spending $500 in their first three months.
Rewards rates: Earn unlimited 1.5% cash back on purchases.
Why we like it: The Chase Freedom Unlimited is a great card for making student loan payments, especially if you have another Chase card that earns Ultimate Rewards points. The card has no annual fee and earns unlimited 1.5% cash back on purchases. If you have a card that earns Ultimate Rewards points, such as the Chase Sapphire Preferred Card, the Chase Sapphire Reserve or the Ink Business Preferred Credit Card, you can transfer your cash-back rewards to your Ultimate Rewards account for valuable redemption options. With no annual fee, having this card in your wallet is a no-brainer, and paying recurring expenses like your student loans can help you score a nice reward once you do pay off your student loans.
Read our review of the Chase Freedom Unlimited.
APPLY HERE: Chase Freedom Unlimited
Annual Fee: $0 (see rates and fees)
Welcome offer: None
Rewards rates: 2x points on all spending, up to $50,000 per calendar year (then 1x)
Why we like it: If you’re looking for maximum rewards on student loan payments, the Blue Business Plus card is an excellent choice. The card earns 2x points on all spending, up to $50,000 per calendar year (then 1x). The downside is that you may not be able to use an American Express card for student loan payments as readily as a card from one of the other major issuers. This is also a business card, and while you may qualify for a business card without realizing it, it’s not ideal for everyone.
That being said, the card does not carry an annual fee and gets you access to Amex Offers. In the past, I’ve been able to earn bonus points and save hundreds of dollars on household bills using Amex Offers. While I have yet to see a student loan payment-centric offer from Amex, the money you save and the rewards you earn can go towards paying down your student loan balance even faster.
Read our review of the Blue Business Plus card.
Annual Fee: $95
Sign-up bonus: Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months.
Rewards rates: 2x miles per dollar on every purchase
Why we like it: With a simple reward structure, the Capital One Venture Rewards Credit Card earned its place on TPG’s list of best travel credit cards. It’s also a favorite of The Points Guy himself, Brian Kelly. The card earns 2x miles per dollar on everything, which is equivalent to 2% cash back when redeemed for travel purchases. You can also transfer miles to 13 airline partners and two hotel loyalty programs.
The high flat-rate earn rate and flexible redemption options makes the Capital One Venture Card a great option for student loan payments.
Read our review of the Capital One Venture Card.
APPLY HERE: Capital One Venture Card
Annual Fee: $0
Sign-up bonus: None
Rewards rates: Earn 2% cash back on every purchase — 1% when you buy and 1% when you pay your bill.
Why we like it: If you’re looking for 2% cash back, and the ability to convert your rewards to ThankYou points at no annual fee, look no further than the Citi Double Cash Card. The card earns 2% cash back on all purchases — 1% when you make a purchase and another 1% when you pay your card off every month. That’s not only a great incentive to pay off your balance (something you should be doing regardless), but 2% is also a solid payout if you’re looking to earn cash back on your student loan payments.
What’s better than 2% cash back on your student loan payments? Two Citi ThankYou points per dollar spent. If you have a card in your wallet that earns Citi ThankYou points, you can convert your cash back rewards from the Citi Double Cash Card to Citi ThankYou points. The Citi Premier® Card or Citi Prestige® Card are both qualifying cards that enable you to do this. Since TPG values ThankYou points at 1.7 cents each, this card effectively earns 3.4% in rewards when converted to points.
The information for the Citi Prestige cards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Read our review of the Citi Double Cash Card.
APPLY HERE: Citi Double Cash Card
Annual Fee: $95
Welcome offer: Earn 15,000 Membership Rewards points after you spend $1,000 in your first three months
Rewards rates: 3x points on up to $6,000 spent annually at U.S. grocery stores, 2x points at U.S. restaurants, 1x points on all other spending, 50% extra points when you use your card 30 or more times in a billing period.
Why we like it: On first sight, the Amex Everyday Preferred card doesn’t seem like a great option for student loan payments. The card earns just 1 point per dollar on non-bonus category spending and carries a $95 annual fee. However, if you make at least 30 purchases in a billing cycle, you’ll earn 50% bonus points. That can add up substantially, especially on large payments.
A great incentive for making those 30 purchases is the card’s earning rate. Cardholders earn 3x points per dollar on up to $6,000 per year at U.S. supermarkets and 2x points at U.S. gas stations. Plus, you’ll have access to Amex Offers, providing plenty of opportunity for you to save on those essential purchases and pay off your student loan balance faster.
Read our review of the Amex Everyday Preferred card.
Annual Fee: $0
Sign-up bonus: Earn 20,000 bonus miles after you spend $500 on purchases within the first three months
Rewards rates: Earn unlimited 1.25 miles per dollar on every purchase
Why we like it: If you’re looking to earn Capital One rewards on your student loan payments without an annual fee, the Capital One VentureOne Rewards Credit Card is a great option. The card earns a flat 1.25 miles per dollar spent on all purchases. Not many cash-back credit cards offer a sign-up bonus, which makes the 20,000 bonus miles offered by this card unique. You can redeem these miles for $200 in travel purchases or transfer them to an airline or hotel partner for even better value.
Read our review of the Capital One VentureOne card.
APPLY HERE: Capital One VentureOne Rewards Credit Card
Can I pay my federal student loan with a credit card?
If you have student loans with Sallie Mae, you can pay them over the phone using a credit card. The only downside to be aware of is that they don’t accept American Express cards and there’s a possibility that your purchases might get coded as a cash advance and incur a fee. One TPG reader had success charging a student loan payment to her Chase Sapphire Preferred without incurring a cash advance fee.
If you’re concerned about cash advance fees, try making a small payment first. If it gets coded like a regular purchase, you can proceed with a larger payment. On the other hand, if it does generate a fee, at least it won’t be significant, assuming your payment was small.
Another option for paying your federal student loans with a credit card is to do it through a third-party payment service such as Plastiq. The site accepts all major card issuers, but imposes fees of up to 2.5% on credit card payments. You can save on payment fees by signing up with a referral link and referring other friends. The Fee-Free Dollars (FFDs) earned from these referrals will minimize your out-of-pocket cost so you can really benefit from the rewards you’re earning.
Paying federal student loans with a credit card is a great option if you’re trying to meet credit card spending requirements and have limited options. In that case, it might even make sense to incur a small fee in order to earn a substantial credit card sign-up bonus.
Benefits of using your credit card for your student loans
A major benefit of using your credit card for student loan payments is earning rewards. With the average student carrying $32,731 in student loan debt, according to Forbes, that is a significant expense you could be putting to work for your benefit. For example, paying a balance that large with a 2% cash-back card would earn you about $654 in cash back. Charge that amount to the Blue Business Plus Credit Card from American Express and you’ll have 65,462 Membership Rewards points, worth $1,309 according to TPG valuations, that you can put to good use.
Picking the right card to pay your student loans depends on several factors. For starters, you’ll need to find out whether your student loan company accepts credit cards and what the terms are. Some merchants charge higher fees for American Express payments. If that’s the case, your choices are narrowed down further. It’s also important to find out from your bank whether student loan payments will be coded as cash advances. Payments to financial institutions sometimes get coded this way, which could result in big fees that offset any rewards earned.
Lastly, consider the rewards you’ll earn by paying your student loans with a credit card. It might make sense for you to charge these payments to a 2% cash-back card for extra savings. If you’re trying to spend your way to elite status, an annual free night or a big sign-up bonus, it might make sense to opt for a card that earns fewer points but gets you closer to a big reward.
Related Reading: Paying college tuition on a credit card: Fees vs. rewards
- Best credit cards for college students
- Best gas credit cards
- Best credit cards for groceries
- Best credit cards for entertainment spending
- Best small business credit cards
- Best credit cards for everyday spending
- Best dining credit cards
- The best cash-back credit cards for 2020
For rates and fees of Blue Business Plus card, please click here.
Featured photo by Getty Images.
Updated on 5/3/21.
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