UPDATE: Please find updated information here: Pay student loans or 529 plans with a credit card!
That didn’t last long. Yesterday I posted “How to fund college savings with a credit card.” In that post I detailed how to use a rewards credit card to fund a child’s college savings plan (and possibly student loans as well) online with a very low fee. One option was to buy $500 gift cards online each with a 1.19% fee. Unfortunately, Gift of College has now capped online gift card purchases at $100 each. With a $5.95 fee for each gift card, that amounts to an outrageous 6% fee! Another option was to fund $1000 directly with a credit card for $15 (a 1.5% fee). But, Gift of College has now capped direct credit card contributions to $500. That $15 equals a 3% fee on each $500 contribution.
What’s left? Apparently Gift of College gift cards will soon be widely available. Gift cards should already be available in some stores in California. And, on November 7th, Gift of College gift cards are expected to be available nationwide at Toys R Us and Babies R Us stores. Most of these stores should allow you to pay with a credit card. The expectation is that the fees will be $5.95 for gift cards loadable up to $500. If you purchase a $500 gift card, the fee as a percent of total will be only 1.19%.
Before buying these gift cards I recommend signing up for a Gift of College account online to see if you can add your beneficiary’s college savings plan or student loan. If so, you should be able to deposit the value of the gift card to their account. In my tests it took about 10 days for deposited gift cards to appear in my son’s savings plan account, but it may have taken longer than usual for the first deposit.
UPDATE: Please find updated information here: Pay student loans or 529 plans with a credit card!
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For those interested in the possibility of using this to pay your student loans, I’d recommend the following:
1. Sign up for a free Gift of College account
2. Add a Plan to your account: Try to add your student loan
If you find your student loan in their drop down box and add it successfully to your account, you should be good to go. I haven’t tested the process end-to-end yet, but once I hear from readers that it is successful, I’ll post about that. I do expect that it will work.
Ditto…I’d really appreciate clarification on using this to pay student debt. Am I understanding correctly that you can set an account at Gift of College Account for a Student Loan account and then pay off that loan with Gift of College gift cards?
Can you use this to pay your own student debt?
Man, that would be AWESOME.
Is it possible… that you killed the deal… by blogging about it?
The story he posted was from the NY Times. I think Greg’s blog is great … but really?
I seriously hate it when companies care more about their bottom line than customers manufacturing spend.