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  1. #1

    Donít Use Credit Cards to Pay for College

    I know college is expensive. And getting more so at a faster rate than inflation.

    However, I urge you to avoid paying for college with a credit card.

    There are several other ways to help pay those tuition bills, including scholarships and student loans. Even so, a growing number of universities and colleges are now offering you another option: put it on your credit card.

    Do not get fooled - this will come at a hight cost. And I'm not just talking about credit card interest costs.

    Transaction Fees

    The first reason not to pay for even a portion of your tuition by credit cards is transaction fees.

    More than half of those colleges that allow you to pay by card add a transaction fee. The average transaction fee charged for using plastic was 2.62%.

    Transaction fees for charging tuition are becoming more common, but the fees don't go to the school. Instead, they go to third-party payment processors.

    Tuition already costs a lot of money. There is no reason to a "convenience fee" of 2-3% to your bill.

    Interest Charges

    If you don't pay your balance off in full by the end of of your grace period, you will start incurring credit card interest.

    Some people may want to use a promotional APR offer to make the charge.

    But guess what: if you do not pay your balance off in full by the end of the promotional period, the interest charges will start accruing as of the date of the charge, not as of the date the 0% offer expired. So you can suddenly be looking at 12 to 24 months of interest appearing on your bill all of a sudden.

    Typical interest fees will make the transaction fee look like chump change.

    The average APR for a credit card in 2016 is about 15%. And you have to have excellent credit just to get that rate.

    With a $10,000 tuition charge, it will take about 30 years to pay off the balance with minimum payments with total interest charges of $11,979. If you wanted to pay it off within a year, you would need to pay more than $900 a month and get hit with more than $831 in interest.

    Do Not Let Credit Card Rewards Tempt You

    Unfortunately, rewards cards can make charging tuition more tempting. This is especially true of college students with limited experience using credit.

    Unless you are charging a tuition balance that you can and will pay in full before the billing cycle ends AND the college does not charge a convenience fee, this will not be worthwhile.

    The transaction fee alone will likely eat up even the most generous reward you may get from your card issuer.

    Conclusion

    Despite all the uproar denouncing student loans, they are a much safer way to finance the cost of your education.

    You interest rate will be lower, charges do not start to accrue until after graduation, and you will have options like forbearance if you cannot afford the payments.

    You may also want to think about applying for scholarships, starting your first two years at a community college, or only going to a local state school to keep tuition down. Take any steps necessary to avoid racking up credit card interest to pay those tuition bills.

    Need a Card to Build/Rebuild Your Credit With? Read This >> Best Credit Cards For Building Your Credit

  2. #2
    Registered User Semi Pro Member
    Posts
    321
    Solid advice.

    I guess it might be tempting to hit a signup offer, but besides that I'd stay away. I never use a card to pay for anything, if they add a service charge.

  3. #3
    Registered User Junior Member
    Posts
    32
    Once you start looking at college for what it is - a luxury good - you will put it in proper perspective.

    You will make sure you get value for your dollar. You will actually spend time studying. Maybe you'll even major in a useful subject.

    You will avoid taking on other, unnecessary debt.

  4. #4
    Registered User Enthusiast
    Posts
    76
    I never even got my first credit card until after I graduated college. Used cash or my debit card.

    Definitely kept me out of trouble. Even if I can go the rest of my life w/o raman.

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