Introduction
Hey readers!
If you’re like many Americans, you’re probably juggling the weight of student loan debt. And if you’re looking for a convenient and flexible way to pay off those loans, you might be wondering: Can I use American Express to pay student loans?
The answer is yes! You can use American Express to pay student loans in a few different ways. In this guide, we’ll walk you through all the options and help you decide which one is right for you.
Direct Payment
The most straightforward way to pay student loans with American Express is to make a direct payment to your loan servicer. To do this, you’ll need to add your loan servicer’s account information to your American Express account.
Once your loan servicer’s account has been added, you can make a one-time payment or set up recurring payments. Recurring payments can be made monthly, quarterly, or annually.
Plastiq
Plastiq is a third-party service that allows you to pay bills with your credit card, even if your biller doesn’t normally accept credit cards. This can be a great option if your loan servicer doesn’t accept American Express directly.
To use Plastiq, you’ll need to create an account and link your American Express card. Once your account has been created, you can add your loan servicer’s information and make a payment.
Plastiq Fees
Plastiq charges a convenience fee for each transaction. The fee varies depending on the amount of the payment and the type of credit card you’re using. For example, the fee for a $1,000 payment made with an American Express card is 2.85%.
PayPal Bill Pay
PayPal Bill Pay is another third-party service that allows you to pay bills with your credit card. Like Plastiq, PayPal charges a convenience fee for each transaction. The fee for a credit card payment is 2.9%.
To use PayPal Bill Pay, you’ll need to create an account and link your American Express card. Once your account has been created, you can add your loan servicer’s information and make a payment.
Paying Student Loans with American Express: Pros and Cons
Pros:
- Convenience: Paying student loans with American Express is convenient and easy. You can make payments online, by phone, or through the American Express app.
- Flexibility: American Express offers a variety of payment options, so you can choose the one that works best for you.
- Rewards: You can earn rewards points on your American Express card when you make student loan payments. These points can be redeemed for statement credits, travel, or gift cards.
Cons:
- Fees: Plastiq and PayPal Bill Pay both charge convenience fees for credit card payments. These fees can add up over time, especially if you’re making large payments.
- Interest charges: If you carry a balance on your American Express card, you’ll be charged interest on the unpaid balance. This can add to the cost of your student loans.
Table of American Express Student Loan Payment Options
| Method | Convenience Fee | Interest Charges | Rewards |
|---|---|---|---|
| Direct Payment | None | Yes, if you carry a balance | Yes |
| Plastiq | 2.85% | Yes, if you carry a balance | No |
| PayPal Bill Pay | 2.9% | Yes, if you carry a balance | No |
Conclusion
Paying student loans with American Express is a convenient and flexible way to manage your debt. However, it’s important to weigh the pros and cons before deciding if this is the right option for you. If you’re comfortable with paying convenience fees and interest charges, then using American Express to pay student loans can be a great way to save time and earn rewards.
Check Out These Other Articles:
- How to Pay Off Student Loans Faster
- The Best Credit Cards for Students
- How to Manage Your Student Loan Debt
FAQ about Paying Student Loans with American Express
Can I use my American Express card to pay student loans?
Yes, you can use your American Express card to make one-time or automatic payments on your federal and private student loans through the Plastiq service.
What fees are associated with using Plastiq to pay my student loans?
Plastiq charges a fee of 2.5% of the payment amount, which is added to your loan balance. The minimum fee is $2.95.
How do I set up automatic payments through Plastiq?
You can set up automatic payments by creating an account on the Plastiq website and linking your American Express card and student loan account information.
Can I use my American Express points to pay my student loans?
No, American Express does not currently offer a way to use points to pay student loans.
How long does it take for my payments to be processed?
Same-day payments made before 6 PM PST are typically processed on the same day. Payments made after 6 PM PST or on weekends or holidays may take up to 3 business days to process.
Is it safe to use Plastiq to pay my student loans?
Yes, Plastiq uses secure encryption technology to protect your personal and financial information.
What student loans are eligible for payment through Plastiq?
You can use Plastiq to pay most federal and private student loans. However, some loans may not be eligible, such as Perkins Loans and Parent PLUS Loans.
Can I prepay my student loans using my American Express card?
Yes, you can use the extra principal feature in Plastiq to make prepayments on your student loans.
Does using my American Express card to pay my student loans affect my credit score?
Paying your student loans on time, regardless of the payment method, will help improve your credit score. However, it is important to note that the Plastiq fee will be added to your loan balance and could impact your monthly payments and credit utilization ratio.
Is there a maximum amount I can pay towards my student loans using American Express?
Yes, there is a daily maximum of $5,000 that you can pay towards your student loans using American Express through Plastiq.