The standard way to pay a loan is in cash, either with a bank account transfer or a check. If money has been tight, or if you're hoping to earn cash back on the loan payment, you may be asking yourself can you pay off a loan with a credit card. It's possible, but in most cases, it's going to cost you.
Can you pay a loan with a credit card?
Yes, you can pay a loan with a credit card, but it's usually less convenient and comes with extra fees. If you can afford to make your loan payment from your bank account, that tends to be the better option.
Hardly any lenders accept credit card payments. They almost always require you to pay with an ACH transfer from your bank account or a check. There are, however, a few workarounds that allow you to pay loans using credit cards. Here are your options if you want to do this.
Transfer the loan to a balance transfer credit card
A balance transfer credit card can be used to transfer over your debt and pay it off at a lower interest rate. These cards often have a low introductory interest rate on balance transfers. The top options offer a 0% intro APR on balance transfers for 12 months or longer, so they're a fantastic way to save on interest charges. You can compare a few of them below.
As of Aug. 06, 2024
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| Wells Fargo Reflect® Card | Citi Simplicity® Card | Discover it® Chrome |
Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
Read Full Review | Read Full Review | Read Full Review |
Credit Rating Requirement:Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions. Recommended Credit Score required for this offer is: Good/Excellent (670-850) Poor Fair Good Excellent 300-579 580-669 670-739 740-850 Good/Excellent (670-850) | Credit Rating Requirement:Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions. Recommended Credit Score required for this offer is: Good/Excellent (670-850) Poor Fair Good Excellent 300-579 580-669 670-739 740-850 Good/Excellent (670-850) | Credit Rating Requirement:Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions. Recommended Credit Score required for this offer is: Good/Excellent (670-850) Poor Fair Good Excellent 300-579 580-669 670-739 740-850 Good/Excellent (670-850) |
Welcome Offer: N/A | Welcome Offer:There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). Long intro balance transfer APR | Welcome Offer:N/A Discover will match all the cash back you’ve earned at the end of your first year. |
Rewards Program: N/A | Rewards Program: N/A | Rewards Program:2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically 1% - 2% Cashback |
Intro APR:0% intro APR for 21 months from account opening on purchases and qualifying balance transfers Purchases: 0% intro APR, 21 months from account opening Balance Transfers: 0% intro APR, 21 months from account opening on qualifying balance transfers | Intro APR: Purchases: 0%, 12 months Balance Transfers: 0%, 21 months | Intro APR: Purchases: 0%, 6 months Balance Transfers: 0%, 18 months |
Regular APR: 18.24%, 24.74%, or 29.99% Variable APR | Regular APR: 19.24% - 29.99% (Variable) | Regular APR: 18.24% - 28.24% Variable APR |
Annual Fee:N/A $0 | Annual Fee: $0 | Annual Fee: $0 |
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If you're going to pay off a loan with a credit card, a balance transfer will likely be the cheapest option. There are a few things to keep in mind, though:
- Not every balance transfer card works with loans. Some only let you transfer over credit card debt. Check with the credit card issuer first to see what its rules are.
- The interest rate will increase after the introductory period ends. If you won't be able to pay off the balance within that time frame, you could end up paying expensive interest charges.
- There's normally a balance transfer fee of between 3% and 5% charged by the credit card company.
- The loan amount you transfer, plus any balance transfer fee, can't exceed the card's credit limit (the maximum amount that can be spent on the card).
LEARN MORE: A Complete Guide to Balance Transfers
Get a cash advance
A cash advance is when you get cash using your credit card. You can do this at an ATM after setting up a PIN on your credit card. The credit card issuer might also offer convenience checks tied to your credit card account. These can be used just like checks from a bank account.
Cash advances aren't recommended as anything but a last resort. They usually have higher interest rates than purchases, and the card issuer can start charging you interest on the advance immediately. There's no grace period, like there is with purchases you make on a credit card.
LEARN MORE: How Does a Credit Card Cash Advance Work?
Redeem credit card rewards to make the payment
If you have any credit card rewards that are redeemable for cash back, you could put them towards a loan payment. Depending on the card, you could have your cash rewards transferred to your bank account or mailed to you as a check. You can normally do this with cash back credit cards as well as some rewards credit cards that earn points.
LEARN MORE: How Do Credit Card Points Work?
This option won't work for everyone, since you need to have some credit card rewards saved to do it. But if you've been using a rewards card and you need some money for a loan payment, don't forget that you can cash in those rewards.
Credit card comparison
We recommend comparing options to ensure the card you're selecting is the best fit for you. To make your search easier, here's a short list of standout credit cards.
| Offer | Our Rating | Welcome Offer | Rewards Program | APR | Learn More |
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Wells Fargo Active Cash® Card | Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $200 cash rewardsEarn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. | 2% cash rewardsEarn unlimited 2% cash rewards on purchases. | Intro:0% intro APR for 12 months from account opening on purchases and qualifying balance transfers Purchases: 0% intro APR, 12 months from account opening Balance Transfers: 0% intro APR, 12 months from account opening on qualifying balance transfers Regular:20.24%, 25.24%, or 29.99% Variable APR | |
Discover it® Cash Back | Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Discover will match all the cash back you’ve earned at the end of your first year.N/A | 1% - 5% CashbackEarn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically. | Intro: Purchases: 0%, 15 months Balance Transfers: 0%, 15 months Regular:18.24% - 28.24% Variable APR | |
Bank of America® Travel Rewards credit card Apply Now for Bank of America® Travel Rewards credit card OnBank of America'sSecure Website. | Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | 25,000 points25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases | 1.5 points per dollarEarn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees, and your points don't expire as long as your account remains open. | Intro:0% Intro APR for 15 billing cycles for purchases. 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days. After the intro APR offer ends, 19.24% - 29.24% Variable APR on purchases and balance transfers will apply. A 3% fee for 60 days from account opening, then 4% fee applies to all balance transfers. Purchases: 0% Intro APR for 15 billing cycles for purchases Balance Transfers: 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days Regular:19.24% - 29.24% (Variable) | Apply Now for Bank of America® Travel Rewards credit card OnBank of America'sSecure Website. |
What about third-party payment services?
You may have read that you can pay off a loan with a credit card using a third-party payment service. The service that almost always gets mentioned is Plastiq, which allows consumers to pay most types of bills by credit card, but it filed for bankruptcy in May 2023.
Plastiq is still available, and there have been reports that it's processing credit card payments as usual (for a 2.9% fee). But I wouldn't recommend using it to pay a loan or any other type of bill. A bankruptcy filing indicates that the company is going through serious financial troubles, and those could affect payments. If your Plastiq payment is late or bounces, you're the one who's going to get charged a late fee and potentially have your credit score drop.
Should you pay a loan with a credit card?
It's generally not a good idea to pay a loan with a credit card, but this also depends on what your reason is for doing it. The most common reasons are:
You can't make the loan payment. In this case, you may want to pay by credit card so you don't miss your monthly payment and get hit with a fee.
The problem is that you'll end up in a "robbing Peter to pay Paul" situation. To pay one debt, you take out more debt with another company. And credit cards tend to have higher interest rates than loans, which is one reason a credit card balance can be even more difficult to pay off than a loan.
See if you have any other options before using your credit card to cover your loan payment. For example, the lender might be able to help you if you call and ask about a hardship program.
You want to save on interest with a balance transfer credit card. Since many balance transfer credit cards have a 0% intro APR on balance transfers, they can be a good choice for paying off loan debt.
This is the best reason to pay off a loan with a credit card. Just make sure you do the math on whether you'll be able to pay off everything during the intro period. Otherwise, you could end up paying more in interest once that intro period ends and your card's APR increases.
You want to earn credit card rewards on your loan payment. It's every rewards enthusiast's dream, but unfortunately, it's practically impossible to come out ahead because of fees. Credit cards only earn rewards on purchases, not balance transfers or cash advances.
FAQs
Yes, you can make your mortgage payment with a credit card, but it will most likely cost you extra. Mortgage lenders typically don't accept credit card payments. To pay by credit card, you would need to use a workaround, such as getting a cash advance. That type of transaction has an extra fee, and you get charged interest immediately, so it's not recommended.
In most cases, you can't get credit card rewards for making loan payments on a credit card. If you pay the loan through a cash advance or a balance transfer, you won't earn rewards on those types of transactions. If you pay using a third-party payment service, you could earn credit card rewards. However, the service fees will most likely outweigh the rewards you earn.
It's possible to transfer a loan onto a balance transfer credit card, but whether this is an option depends on the card issuer. Some credit card issuers allow it, whereas others only let you transfer credit card debt.
