Can you dip or swipe to pay for your studies? Possibly.
Colleges and universities depend on your tuition. Which means they’re often offer multiple ways for you to pay for it.
Checks are a mainstay — but can you pay with a credit card?
The answer: It depends on your school. Here’s what to look out for when considering paying with plastic.
Can you pay for college with a credit card?
Many colleges accept credit cards for tuition payments. If you’re lucky, your school could even accept Visa or Mastercard without a fee.
Unfortunately, a good number of them will add a 2% to 3% surcharge for the convenience. While that doesn’t sound like much, it could hurt: On a $5,000 tuition bill, you could pay around $150 just in credit card fees.
Contact the bursar’s or registrar’s office at your college to find out if you can pay with a credit card — and how much you can expect to pay on top of your tuition.
Why your college adds a credit card surcharge
It’s usually free for consumers to pay with a credit card. But anyone accepting a credit card payment must pay a fee of 2% to 3% of the purchase to their bank.
This includes your school, which could end up as millions of dollars in credit card fees for high-cost tuition. Rather than eat these fees, your college may pass them on to you.
Alternatives to using a credit card to pay tuition
Instead of using a credit card, consider these methods for paying your tuition:
- Direct deposit
- Personal check
- Money order or cashier’s check
A money order costs about a dollar, and you can get one at grocery stores or your post office. Visit your local bank for a cashier’s check, which can cost $10 or more.
Use your credit card through payment services
If your college doesn’t allow credit cards for tuition, you may have luck with a payment service. Plastiq, for example, collects your credit card payment and forwards a check on your behalf to your school.
Payment services generally charge a 2% to 3% fee for credit card transactions, and you’ll need to factor in up to seven days for your school to receive your payment.
Why you should — and shouldn’t — pay for college with a credit card
Paying college tuition with a credit card could be a viable option. Typically, the key factor is whether your college adds a credit card surcharge.
Consider paying for college via credit card if:
- Your college doesn’t charge extra fees. Plastic is a convenient way to pay for many purchases. If your college doesn’t add a surcharge, feel free to use your credit card.
- You’re trying to meet your credit card’s minimum spend for a signup bonus. Many signup bonuses require a minimum spending of thousands of dollars. Because college tuition is a significant expense, using your card to pay for it could help get you closer to a bonus. Just make sure that credit card fees don’t eat up what you’ll earn in cash back, points or miles.
- You want to pay off your tuition over a short time. Consider using your credit card if you plan on paying tuition over a few months. If you do, put together a solid pay off your debt.
- Your credit card offers rewards. If your college doesn’t add a convenience fee, you could scoop up big rewards from paying your tuition.
Rewards math: Paying tuition with a credit card
If your school charges credit card processing fees, it can be difficult to come out ahead on rewards.
Let’s say you earn 1.5% cash back on all purchases:
- On $5,000 tuition, you’ll earn $5,000 x 1.5% — or $75 cash back.
- But if your school adds a 2.5% surcharge, you’ll pay $5,000 x 2.5% — $125 in fees.
The math’s pretty rough there. But what if your school doesn’t add a surcharge?
- On $5,000 tuition, you’ll earn $5,000 x 1.5% — again, $75 cash back.
- But you’ll pay $0 in credit card fees.
- Which means you’ve made out with a $75 bonus scot-free.
The takeaway? If your school doesn’t charge processing fees, you could have a very good reason to pay with plastic.
Avoid paying for college via credit card if:
- Your college charges credit card fees. These fees will be a huge burden on top of your already costly tuition.
- You want to pay off your tuition over a long time. Credit card interest can get very expensive the longer it accumulates. If you don’t have the money to pay tuition now, consider a student loan — it’s much cheaper in the long run.