Avoid Using Credit Card To Pay For College Tuition
CreditCards.com Senior Analyst Matt Schulz said if people can’t pay their tuition bill immediately, they don’t need to put it on the credit card. For example, a $10,000 tuition bill placed on a credit card that’s got a 15 percent APR will occur nearly $4,300 in interest charges if paid off in five years.
However, there are some students who use credit to pay for some of their schoolings.
Information from Sallie Mae shows that five percent of students have used a credit card in 2016 to pay for their college education, an increase of three percent from 2015. Two percent of the students’ parents have charged their credit card, which remains unchanged.
Since some cards do provide rewards like cash back or miles, it’s tempting to use them to pay for high-priced items like tuition. However, it should only be used if you know you’ll pay the card back in a month.
255 of the 300 public, private and community college let people use a credit card to pay for their tuition. And, 145 of them charge some type of fees to process credit card payments – an average of 2.62 percent.
Schulz said if a college charges a convenience fee, it’s best to not use the credit card. There’s no reason to pay the 2.75 percent convenience fee to attain the 1.5 percent cash back. She said the math doesn’t work for anyone’s benefit. For some colleges and universities, the fee will address the process charge the credit card companies charges, which means the processor gets the money.