Author: Dan Rafter / Source: Wise Bread
At first, the answer seems obvious: Using a credit card to pay your college tuition is a terrible idea. With the high rates that come with plastic, you could rack up thousands of dollars in interest by charging your tuition.
But, there’s another way to look at it: If you can pay off your credit card bill in full each month, using a card to pay your tuition could generate significant cash back rewards, airline miles, or free hotel stays.
It all comes down to your discipline, the type of credit card, and what you can afford to charge. Here are a few things to consider before charging your tuition. (See also: The 5 Best Credit Cards for College Students)
College isn’t cheap
The cost of college isn’t shrinking any time soon. CollegeBoard reports that the average yearly tuition for a public, four-year in-state college stood at $9,970 for 2017–2018, up 3.1 percent from the previous year. Private colleges averaged $25,620 for the same school year, an increase of 3.2 percent. Neither of those figures include the average $10,800 cost for room and board.
If you’re going to be charging tuition or room and board to a credit card, you should have the cash on hand to pay it off in a timely fashion — ideally, the first billing cycle. And that won’t be a small amount. Otherwise, you put yourself at risk of falling deeply into credit card debt.
Very few people go this route
According to the 2017 edition of Sallie Mae’s How America Pays for College report, just 3 percent of families used credit cards to help cover college tuition for their kids, while 4 percent of students used plastic to pay for some or all of their tuition. Parents charged an average $4,450 for tuition in 2017,…
The post Is It Smart to Pay College Tuition With a Credit Card? appeared first on FeedBox.