Pay tuition with a credit card

Extra credit: How to pay college tuition with a credit card

Huh?

https://www.msn.com/en-us/money/personalfinance/extra-credit-how-to-pay-college-tuition-with-a-credit-card/ar-AA1m63Wi

 

At the University of Leicester I pretty much had to pay with a credit card. This took care of the currency exchange issue.

 

This is nuts. Finagling points is... pointless. You pay for them one way or another. This is an invitation to step into a big hole. You're supposed to use the card to pay tuition - which is likely several thousand dollars. How many students have cards that allow them limits sufficiently high to do this? If they do, under the author's scheme, they're supposed to pay it off before incurring interest charges. That requires some self-discipline that not all students (or others) have. Coasting along on smaller payments is the first step to winding up in a financial jackpot. Almost certainly, some other pressing need will come up and prolong the agony. You may be treading the wheel for years after graduation..

They're pitching this to a select. well-heeled minority. Sons and daughters of Harvard grads, maybe. This is full of dangers for people of ordinary means - or less.

If you CAN pay it in full from your own money - do that. It's over - no interest. If you can't, using a credit card is the most expensive money you can borrow. Look for a better deal. Which Titanium / Gold / Black card should you use? NONE of 'em, whenever it's possible.

 

Some people say "I use my credit card all the time - that way, my saved money stays in the bank, earning interest." That's ridiculous. the bank pays you 1% or 2% - OK, a bit more on a CD if you tie your money up for a long time. For this you pay maybe 18% on the money charged to the plastic - maybe only 11% if you have a low-rate card? That's crazy.

I worked in the credit card business for many years. I know how crazy it is. So, now I have one credit card. One. I use it solely for Amazon or other Internet purchases. Because it works. It's never been used in a store - I use my bank debit card there, to pay the whole shot instantly. I've never paid a cent of interest on the credit card. I sleep well. Try it.

 

We’re selective with credit card use and pay any balance before interest kicks in. Fully agree that using a credit card to pay tuition is insane. For most people any points earned is negated by incurred interest.

 

Unless one uses the credit card not as a borrowing device, but one of convenience, paying off the balance as it comes due.

 

The cost of those points (to the card issuer) is priced into their services. The issuer keeps those charges at a level sufficient to reimburse them for what they "give" away in points, via the percentage of the sale the card issuer gets to keep. Some cardholders get points - every holder (and merchant) pays for them. The issuer gets their costs back whether you pay off your balance or not. They are not "free" to any cardholder. The cost is hidden - that's all.

There is no free lunch. There are no free points. Including points at the grocery stores, which may be a separate scheme from credit card points. The price of points is built into the retail prices. Again, every customer pays.

 

The thing that really gets me is that the banks charge full-whack on card transactions for charitable donations. I found this out a year or two ago, when I donated, via credit card and internet, to a big-name charity that deals with women's cancers. They sent me a nicely-worded email saying "Thanks for your kind donation. Would you please consider sending us another $16.67 to cover the bank-card charges at your end and ours."

No, I won't. What I did do is give them the $16+ to their local office, where my donations since are being made - cash or cheque. A European friend advises me this doesn't happen in his country (Germany.) You donate 500 euro via your card, the charity gets 500 Euro. Maybe that's standard in the EU - I don't know. It SHOULD be, here. It isn't.

I support a charity - not bankstards.

 

The merchants - and you. Merchants adjust their retail prices to offset this. You pay, whether by card or cash. It's rigged. A scam.

 

I started in the credit business in 1964 - about 4 years before the advent (here) of the major bank credit cards.
In 1964, there were about 480 consumer bankruptcies in Canada. Fast forward to 2022. Just over 100,000 consumer insolvencies.

Go through the lists of creditors of a few dozen bankrupts. I saw thousands in my work life, and you don't need to see nearly that many to pick up on the credit card connection. Bad mojo!

In the Muslim financial world, charging or receiving interest are both haram - ritually unclean. So is charging a fee for providing credit. I like that system.

 

Yes - I know. I was amplifying that when your post appeared. Yes - smoke and mirrors -Tezcatlipoca if you want. (His name means "smoking mirror" in Nahuatl.) But I think, for all of that, their system eliminates much of the harm caused, especially through unscrupulous use of interest charges. It cuts down the availability of usurious techniques. Here's what I was working on.

In the Muslim financial world, charging or receiving interest are both haram - ritually unclean. So is charging a fee for providing credit. I like that system. There are Islamic-compliant credit cards.

Credit for big stuff - like cars and houses? You can get Islamic terms on those too. With cars, the creditor buys the item, marks it up and sells it to you. you pay interest-free instalments on the new price. For houses, it's rent-to own. You make a down payment and you pay an agreed level monthly sum. The rent portion decreases as equity increases. Some credit unions here do regular and Islamic-compliant mortgages. The Credit Union doesn't have to be Muslim-run and the customer doesn't have to be Muslim, either. Any applicant can have their choice. The payment schedules are geared to reflect current interest rates. You pay about the same but it's not deemed interest by the Muslim authorities.

 

Yeah, I like the Islamic system. It's cleaner and they don't have recourse to some horrifying techniques I've seen in the personal loan business that can "increase the yield" to astronomical proportions. These were "justified" by some managers as "making delinquents pay for their sins." Those were bad days -- I mean years.

 

Thanks for sharing

 

I think most colleges have caught on to this and now charge a service fee if you pay with a credit card, which will usually nullify the advantage you might get from cashback or points. If you want to pay online, they usually use an e-check service to get an Automated Clearinghouse (ACH) payment.

 

Yes - the school charges you, because they've had a portion of your payment deducted by the credit card co. They don't want to be left short - so they turn around and get reimbursement from you. So you end up paying 102% or so of your bill. I wouldn't doubt that many schools have already added that charge to ALL students' posted tuition fees and may now be recovering it twice. A little bonanza at students' expense. Of course, I can't prove it.

Jahaza is right. Don't feed the hyenas. Use any workable alternative (such as the one suggested) that gets your payment there in one piece.

Rats gonna nibble...

 

What I AM positive of is - many (if not all) retailers have priced what they pay to the credit card companies into ALL their retail prices. They "recover" those charges on every sale - whether or not the customer used a credit card. Seriously, am I to think that schools do things differently?