The Pitfalls of Covering College Costs With Plastic

The Pitfalls of Covering College Costs With Plastic

For those who are used to swiping for every purchase—whether that's a pack of gum or an international flight—paying for college tuition with a credit card might not sound like such a big deal.

After all: Just think of all those rewards you could rack up.

But those extra points—and the added convenience—can cost students a price. According to a new survey by, more than 90% of public universities—and close to 70% of private—are charging substantial fees for paying with plastic.


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In other words, the bonus of those enticing rewards might be entirely wiped out by added charges from the university. According to the survey, the average "convenience fee" billed by schools is 2.62%—a seemingly small number that can end up ballooning into thousands of dollars over the course of four years and many large tuition payments.

Compare that 2.62% rate to the calculated benefit of rewards points, which generally work out to just about 1% back. That's like paying a $262 fee—for a $100 reward.

In short, it simply "doesn’t make sense to pay your tuition with a credit card, if you’re charged a convenience fee,” Matt Schulz, a senior analyst at, told Today. Not to mention, the survey is assuming students are paying the bill in full, on time. But missing one payment could also trigger steep interest rates on the card—on top of those fees you're already shelling out for using it.

Want to learn smarter ways to pay for an education? Find out how these five real teens plan to cover their college costs—and what a CFP® has to say about their strategies.


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