Tuition fees have seen a continuous rise over the past 20 years, becoming a significant financial burden for many families.
While numerous colleges and universities accept credit card payments, it’s important to note that this may come with additional costs. If you’re in charge of paying tuition, should you use a rewards credit card, write a check, or withdraw cash from your account?
This article will assist you in making that decision.
Can You Pay Tuition with a Credit Card?
The answer varies by institution. Start by searching for “[Insert college name here] tuition credit card.” You should find relevant information in the top search results. If not, contact the finance or registrar’s office directly.
Typically, colleges fall into one of three categories:
- No credit card payments accepted (e.g., Wake Forest University).
- Credit card payments accepted without fees (e.g., University of Nevada — Las Vegas).
- Credit card payments allowed with an additional fee (e.g., University of Florida charges a 2.75% fee).
If your school doesn’t allow credit card payments, you’ll need to consider other options. However, if they do, let’s explore further.
Related: Can you pay your student loans with a credit card?
Colleges without Card Processing Fees
If your institution permits fee-free payments via credit card, definitely take advantage of it.
Just ensure you can pay off the full amount when the statement comes due—this is critical for credit card management. Carrying a balance could easily negate any rewards you might earn.
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Unfortunately, only a few schools allow credit card payments without fees. For instance, among the top 100 national universities, only four permit this:
- State University of New York (SUNY) — Binghamton
- SUNY — Stony Brook
- SUNY — College of Environmental Science and Forestry
- SUNY — Buffalo
Many state universities in New York do not charge fees for credit card payments, making them a good option if you’re enrolled there.
Paying Fees for Using a Credit Card
The third category complicates things. Roughly two-thirds of top national universities permit credit card payments, with fees ranging from 2.25% (e.g., Penn State) to 2.85% at others. Is it worth incurring fees for credit card tuition payments?
There’s no straightforward answer. Generally, using a rewards credit card may be beneficial if the rewards exceed any processing fee incurred. Let’s dive into specific circumstances where this could apply.
Earning a Welcome Offer
Consider utilizing your credit card for tuition if it allows for earning a welcome bonus. Many top travel rewards cards offer substantial points for achieving a specific spending threshold.
If your spending falls short of this threshold, paying tuition fees might be a feasible option.
For instance, if you are interested in the Chase Sapphire Preferred® Card, new cardholders can earn 75,000 bonus points by spending $5,000 within the first three months. If the tuition is $20,000 and incurs a fee of 2.6%, this would add $520 in fees, but you’d earn a total of 95,520 points, valued at approximately $1,958—far exceeding the fee.
This logic only holds if you lack alternative ways to meet the spending requirement without a fee. Otherwise, explore other payment methods.
Earning Valuable Rewards
Another scenario for considering credit card payment is when the points or miles earned surpass the fees incurred. The value of loyalty currencies can be subjective, so refer to our monthly valuations for guidance.
Here are examples when the earned rewards might outweigh card fees:
- Chase Freedom Unlimited®: Offers 1.5% cash back on all purchases, or 1.5 points per dollar, equivalent to a return of 3% in value. If the card fee is less than this, using it is advantageous.
- The Business Platinum Card® from American Express: While offering one point per dollar, it adds 50% more points on purchases over $5,000, yielding a 3% return. Again, use this if the fee is lower than this return.
- Capital One Venture Rewards Credit Card: This card provides unlimited 2 miles per dollar on all purchases, resulting in a 3.7% return.
Using a 0% Introductory APR Offer
Another instance where incurring fees makes sense is with a new credit card offering 0% introductory APR. This can be beneficial if you can’t fully fund tuition upfront.
This option is particularly valuable after exhausting a 529 college savings plan while wanting to avoid student debt. Just remember, you’ll need to pay off the entire balance before the promotional period ends, or you could face high-interest rates.
Related: The best balance transfer credit cards
Conclusion
Whether you’re new to credit cards or a seasoned user, maximizing your spending through travel rewards can be beneficial—even when paying tuition. However, many institutions may charge fees for credit card use, or may not accept them at all.
If a fee is involved, there’s still a chance it could be worth it, so do your homework and choose the best credit card for tuition payments. We hope this article has clarified important considerations for you.
Related: Credit cards 101: The beginner’s guide
