Oct
24
Does it matter if you hold debt through student loans or through credit cards?
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I have a chance to transfer a great deal of my student loan debt to a lifetime APR on my credit card that is 4% lower. Would this have any detrimental effects on my credit?
My debt wuld stay the same, but the source would be different.
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6 Comments
October 27th, 2009 at 5:49 am
no bad effect. and it’s better for you. go for it.
October 30th, 2009 at 4:05 am
the effect of the APR would be better. Multiply the amount owed by the current APR then by the new APR. That is the difference for the short term. I would transfer it if it were me. Are you sure it is a lifetime transfer? Read the fine print. Also, if you miss or are late for a payment what are the consequences?
October 30th, 2009 at 7:50 am
well, your credit score would go up by paying off the loan so quick. and if you ever get behind,the feds will not get your tax refunds. if you keep the loan,and default,it causes way more problems. on the other hand, you cannot decuct the interest on credit card on your taxes.
October 31st, 2009 at 6:45 am
generally, it is not a good idea to carry large amounts of debt on a revolving charge account if you can avoid it. Student loans carry guarantees on the interest and do not fluctuate.
Credit cards influence your credit score and may reflect badly on credit reports. A number of employers will run credit checks on prospective employees and in some cases decline to employ persons with questionable credit. The employers view these as a risk of employee theft because they see bad credit as potential trouble in the future.
On the other hand, student loans that are in good standing show character in choosing to attend school to better themselves and student loans that are in good standing and in current paid status do not reflect any bad character.
Credit card debt in excess of accepted debt to income ratios
demonstrate a weakness of character and in many cases will place the borrower in higher interest payment schedules and may require higher repayment schedules.
October 31st, 2009 at 10:57 am
i am a retired CFP & CPA & independent insurance broker- i helped people with financial matters for over 32 yrs before retiring- have you ever heard the expression- watch out- if something looks too good to be true- it probably is, too good to be true-and there is a catch there, somewhere !!- i am not an expert on credit now-adays- yet here are some important things to consider–the 4% lower APR is tempting, yet how can you be sure its a lifetime guarantee-i dont know of any credit card that guarantees its interest rate for any certain period-except short term, to get new card holders, with a low- introductory interest rate for a short time period–also, is your student loan rate gtd. or can it fluctuate with the prime rate or some other index?? also- i believe student loans are pretty flexible on repayment terms to give you time to start your career before heavy payments are due–by lumping your student loan in with your credit card balance your monthly payment could rise significantly ?? who knows-check this out?? also–if a potential employer checked your credit- your consumer credit amt due would seem very, very high and no one would know it was a student loan that made the amt so high and you might be rejected as an applicant, without being able to know or explain why ??!! also- student loans may be partially forgiven if you teach school or some other occupation in economically poor areas–your student loan amt would disappear by combining it with your credit card- and might make you in-eligible for this benefit– i would check with a bank officer or a knowledgeable credit person from a local commercial bank–ask them how credit shows up and is classified today- and seek answers and expert counsel from them–stay away from credit repairers and ads-most of them are fakes or not really knowledgeble–also go to the holder of your student loan and ask their advise-what are the positives and negatives of the two different loans ?? get expert advise because this is important- and dont make the decision without plenty of information and questions answered–caveat emptor-let the buyer beware–be carefull & good luck to you, young man !!!
November 2nd, 2009 at 5:48 pm
Why don’t you consolidate your student loan and get a lower rate that is fixed. I get several offers in the mail. I would not transfer my student loan to a credit card. I think your credit score would go down because your revolving credit would be less/balance would be higher.