Student Loan or 0% credit card?

TheGardener

(also posted on CC board)

Daughter currently works fulltime on low-ish salary approx. £15K pa. gross. She wants to go back to Uni 1 day per week to get quals that will increase her salary but in order to do this she will have to reduce hours to 4 day week and will lose 20% of salary while studying for 3 yrs.

Has a current debt of £3.5K on a 0% card and is paying at £500pm off with no further expenditure on the card. Despite income she had an excellent CR as very good at managing her money.

She will have to pay £2.2K in Sept in tuition fees. So the question is:

Should she carry on paying off the current CC at 0% (so it will be clear by Sept) and then pay tuition with a CC and then do a BT to a 0% or - should she save for the tuition fees and just make minimum payments to current CC...she is eligible for a student loan (she already has one from a few years ago but has switched careers) but that carries an interest rate.

JakeWazza

I would say it depends how much her salary will be boosted by, if her salary will remain below £21000 go for the Student loan, she'll never have to pay it back at all. However with the Credit Cards both be 0% I assume you are just going about 2 different methods of getting the same result, paying no interest and paying off the credit card debt and tuition fees, which will add up to the same regardless with no interest as long as she pays them off within the 0% period.

jackieblack

Also, her take home pay won't drop by 20% just because her hours drop by 20% because of Income Tax and NI