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Paying tuition with a credit card: Is it possible?
Your school may accept credit cards — but watch out for extra fees.
Credit Card Guides
It’s common to pay for college tuition with a check — 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 tuition with a credit card?
Policies vary by school, but many colleges allow tuition payments via credit card. The best option is to contact the bursar’s or registrar’s office at your school and ask if credit card payments are allowed.
Another alternative is to Google the answer yourself. Here’s how:
- Type the university name followed by tuition credit card in Google’s search bar.
- The first result on Google will often have the answer whether that particular university accepts credit card payments.
Should you pay for your tuition with a credit card?
This largely depends on your financial situation and whether the university charges any fees for credit card payments. If the university doesn’t charge credit card fees and you have a rewards card, paying your tuition with plastic is definitely worth considering.
What to watch out for
As said before, paying your tuition with a credit card can cost you extra. But there are other downsides as well. Here’s what to keep an eye on:
- Credit card fees. Unfortunately, many schools will add a 2% to 3% surcharge when you use a credit card for school tuition. While that doesn’t sound like much, it can hurt: On a $5,000 tuition bill, you could pay around $150 just in credit card fees.
- Credit card interest
The average credit card APR is around 17%, which works against you for a big-ticket purchase such as tuition. You don’t want thousands of dollars of tuition to rack up interest at this rate, as this could put you deep in debt. - No payment flexibility. With a credit card, payments are usually inflexible: You must make at least the minimum payment on time, or you’ll probably get a late fee and potentially a hit to your credit score.
- It could hurt your credit score. Missing a payment isn’t the only thing that can hurt your credit. Making a large purchase with your card increases your utilization ratio. If the ratio goes above 30%, it could negatively affect your credit score.
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 credit card processor.
This includes your school, which could rack up millions of dollars in credit card fees for high-cost tuition. Rather than eat these fees, your university may pass them on to you.
Universities that don’t charge a processing fee
Most of the top 100 national universities will charge a credit card fee when you pay your tuition. However, there are a few that don’t have credit card fees:
- State University of New York (SUNY) Binghamton
- SUNY Stony Brook
- SUNY College of Environmental Science and Forestry
- SUNY Buffalo
Benefits of paying tuition with a credit card
Paying your tuition with a credit card can work in your favor at times. Here are a few ways paying tuition with a credit card can help. You can:
Earn a card’s signup bonus.
Many card signup bonuses require a minimum spend of thousands of dollars. By paying your tuition, you can easily clear the signup bonus requirements. Just make sure credit card fees don’t eat up what you’ll earn in cash back, points or miles.
Earn rewards.
If your college doesn’t add a convenience fee, you could scoop up rewards from paying your tuition. For example, a card like the Citi® Double Cash Card earns 2 % back on all purchases. For a tuition payment of $5,000, you’ll get $100 back.
Earn valuable perks.
Some credit cards come with valuable perks that are typically hard to get. One such perk is the Southwest Companion Pass. This perk lets you bring one companion to fly with you on flights booked through Southwest Airlines only by the cost of taxes and fees. What’s cool about this perk is that it lasts for the remaining of the year when you earn the pass plus the entire following year.
Pay with 0% interest.
Some credit cards come with a 0% intro APR period on purchases, which can last as long as 20 months. This is basically an interest-free loan. Just be sure to pay your balance before the intro APR period expires or you’ll start accruing interest on any unpaid balance.
The math on rewards: 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 $75 in rewards.
Here, the rewards are sweet — just watch out for credit card interest.
Alternatives to using a credit card to pay tuition
Instead of using a credit card, consider these methods for paying your tuition:
- Direct deposit.
- E-check.
- 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 business days for your school to receive your payment.
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Bottom line
Using a credit card to pay for tuition can be convenient, and it can bring you a good chunk of rewards if your school doesn’t add a surcharge. If you use this payment method, pay off your tuition debt soon to avoid heavy interest. Alternatively, consider a student loan.
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