Scenario: A person owes $30,000 in school debt to a single entity. The person also has THREE credit cards. Each month, the person pays $500 using credit card 1 towards the debt and $50 (minimum fee) for the other credit cards, bringing the monthly debt to $600. On top of that, each month the person replenishes the first card by paying back $500 to keep using credit card 1 each month without maxing out.

Is it possible to instead spread the $500 a month debt across the three cards to cancel out having to pay the other card's monthly minimums on top of the school debt to reduce the person's monthly debt from $600 to just $500?

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  • Are you paying student loans with credit cards? – Glen Pierce Dec 31 '17 at 5:23
  • Not all lending institutions allow credit cards for payments. Have you considered debt consolidation instead? – Frank FYC Dec 31 '17 at 6:29
  • @FrankFYC I never said it was myself. This is an objective question with an example that can apply to anyone. – SpicyWeenie Dec 31 '17 at 7:08
  • "bringing the monthly debt payment to $600." – RonJohn Dec 31 '17 at 9:33
  • "replenishes the first card by paying back $500 to keep using credit card 1 each month without maxing out." What about payments to CC1 for other usage on the card? – RonJohn Dec 31 '17 at 9:35

A person owes $30,000 in school debt to a single entity. Each month, the person pays $500 using credit card 1 towards the debt

Unless you're really disciplined (and the loan company allows it, and they don't charge you a "convenience fee"), paying off a lower interest loan with higher interest credit makes anti-sense.

Is it possible to instead spread the $500 a month debt across the three cards to cancel out having to pay the other card's monthly minimums on top of the school debt to reduce the person's monthly debt from $600 to just $500?

Of course it's possible. But math is still math, and paying $500 instead of $600 means that you'll be accumulating an extra $100 of debt each month.

to keep using credit card 1 each month

You're paying off those other monthly charges, right?

without maxing out.

That's always a bad sign. The person in your hypothetical situation is in serious financial shape.

  • 1
    Do you mean "serious financial trouble"? – Bobson Dec 31 '17 at 12:53
  • 2
    +1 Even for a person with iron-clad discipline, paying off a student loan with a credit card on which one is carrying a balance is not just anti-sense but sheer folly. As you point out, it is replacing debt at low interest rates with debt at high interest rates – Dilip Sarwate Dec 31 '17 at 14:56
  • @Bobson to me, the two phrases are equivalent. Evidence to the contrary, though, is welcome! :) – RonJohn Dec 31 '17 at 15:55
  • You and others are not paying attention nor answering the question objectively. This is not a real-world scenario. This is a probable scenario much like practicing a drill. You are over-thinking it making it harder for yourself than it has to by adding more to it than what is asked. Im not asking about interest rates, financial algorithms nor "math is still math" (that was never in question) with all the bells and whistles. But apparently flexing one's ego is too overpowering for a simple question that I was hoping someone had an actual answer to. I dont deal in the "possible." – SpicyWeenie Jan 6 at 10:39
  • Math says the hypothetical person is in over their head and drowning quickly. No ego in math. – pojo-guy Jan 6 at 15:08

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