Obtaining a university degree is one way to advance education and expand employment opportunities. It can also place you in some of the most expensive debts you will undertake in your lifetime.
Tuition fees at university are expensive. College Board estimates that it costs $43,350 to earn a bachelor’s degree from a private university and $11,610 to earn a four-year degree from a state university. Perhaps unsurprisingly, Americans today carry an astounding $1.7 trillion in college debt.
So, can you pay tuition with a credit card? Some universities allow this, but if you spend money on either method, shouldn’t you regain some rewards in the process? The short answer is yes, you may get a reward, says Ted Rothman, a senior industry analyst at Bankrate credit cards, but they can come at a sudden price.
When do I pay my tuition with a credit card?
Here’s what makes it reasonable to pay tuition with a credit card:
- If only I could create a reward that exceeds the fee.
- If you are able to responsibly obtain a credit card welcome offer.
- If you have a long promotional APR offer.
However, surpassing the disadvantages of using a credit card to pay tuition is not a small feat.
However, the key to doing this is to pay your balance in full. “Even using a zero percent promotional rate can be a big price, and I think it’s too risky as interest rates will skyrocket at the end,” Rothman says. “Student loans have much more interest rates and repayment terms than credit cards.”
When does it make no sense to pay university tuition with a credit card?
To be clear, paying university tuition with a credit card makes little sense. Common reasons are:
- If you do not pay your tuition fees in full and on time, you will be eligible for an average of 20% or more APR (average 20% or more).
- Your credit score is at risk.
- Your university may not accept credit cards simply as a payment method.
In addition to these reasons, you may be hit with the fee. Colleges that accept credit cards often charge processing fees to complete payments. These fees are usually 2.5% or more of the tuition fee, which can be summed up quickly. To put that into perspective, if you charge $12,000 tuition, you’ll add a $300 fee.
Alternative ways to pay university tuition
Apply for financial assistance
To apply for financial aid, you must complete a free Federal Student Aid (FAFSA) application each year to see how well you are eligible. FAFSA allows the Department of Education to see how well you qualify. Scholarships and financial aid can come in the form of grants, workplace programs, low interest rate loans, and scholarships.
Explore scholarship options
FAFSA is not the only way to qualify for a scholarship. Many students can get partial or full scholarships of academic success, athletics, expansion of disability, being part of a protected minority, or falling under the federal poverty line. There are scholarships available from various institutions, so we will conduct a survey before paying the tuition fees in full.
The U.S. Department of Education offers tools to help you find and apply for eligible scholarships.
Check if the university offers installment plans
If you can’t find a scholarship that suits your needs, consider contacting the university directly. Many institutions offer installment plans to pay tuition fees in installments that are more manageable, rather than at once.
Conclusion
It is possible to pay tuition with a credit card, but the smartest financial moves are rare. You can earn a decent reward by having one of the best student credit cards, but it disappears as soon as you balance it. In addition to the interest paid on that balance, universities that allow credit cards tend to charge processing fees on each payment, further negating the value of the reward.
It is also important to note that before leaving school, many college students will end up in credit card debt and student loan debt. In the long run, it would be much better to explore the types of scholarships and financial aid that are not subject to high interest rates when paying tuition.
