Credit card rewards for college tuition payments

The college charges a fee for accepting credit cards, but would that be outweighed by huge numbers of frequent flyer miles or other benefits? It's a private college, so the tuition payments are substantial. Has anyone done the math? (Posting for a friend.)

Depends on the fee. Are we talking $5 or 5%?

What possible reason, other than gouging, would be the rationale for charging a fee for CC payments. They get their money and the fee they are charged by the CC companies can't be that much. Sheesh.

Actually, the fee on $50,000 would be $1,750, which is a nice chunk of change to me or to the college.

Most credit card rewards are 1%, unless there are specials (my Amazon gives 5% for groceries -- go figure) and most also have limits, so in most cases the reward is much smaller than the fee )which is 3 - 4%). It would have to be, otherwise how would the credit card issuer make their profit?

What max said...this is why religious organizations, colleges and many other non-profits charge for use of credit cards for fees, and why car dealers and other sellers of very expensive goods may cap how much of a purchase can be paid for by credit card. Also why the gas station gives a discount for cash payments, I believe.

We have a Starwood Amex that gives us hotel points. Typically, a night at a W or Westin type hotel is 7,000 points. If we were to charge the tuition to the AMEX, we would pay a fee of $600 (1.5% on 40,000). At $250 a night in the hotel room, the resulting points would probably be good for about $1500 in hotel vouchers. So, there would be some sort of bonus for us.

But I wouldn't put it on a regular rewards credit card, because the fees the college charge would outweigh the cash back. Too bad Discover did away with its 5% cash back.

Thanks, max. I think you answered the question.

Citi now offers a 2% cash rebate card with no limits and no annual fee. But that's still not enough to outweigh the college's cc charge.

unicorn33 said:
Citi now offers a 2% cash rebate card with no limits and no annual fee. But that's still not enough to outweigh the college's cc charge.

That's only on dining transactions.

dave said:

unicorn33 said:
Citi now offers a 2% cash rebate card with no limits and no annual fee. But that's still not enough to outweigh the college's cc charge.

That's only on dining transactions.

Not true Dave. Maybe there is a dining restriction on a different Citi card (or maybe it depends on if the card is issued in the US versus other places) but the double cash back (one percent at purchase and one percent at time you pay the credit card bill) has no purchase restrictions. I know this not because I have the card (but am considering getting it in lieu of an airlines reward card I have) but my brilliant brother-in-law now uses the card.

https://www.citi.com/credit-card-details/citi.action?ID=citi-double-cash-credit-card

Credit card issuers are not charity organizations, so there is little or no chance that the consumer profits in this situation

The parent of one of my son's college friends paid his son's college tuition (NJIT) by credit card and earned enough airline miles to pay for a flight to/from Hong Kong for the entire family (2 parents plus three adult children). This was quite some time ago. Credit card fees passed along by the college and credit card rewards were likely quite different at the time.

As stated above, you need to look at the college's policy/practice and that of the credit card you are using and then make your decision. The trip to Hong Kong was something this parent wanted to do anyway. Having a specific goal in mind that could potentially be met through using a credit card to pay tuition costs would definitely be a help. Rewards that you never use have no value to you.

It is also important if you go this route to make sure you can pay the credit card company in full for any tuition charges that appear on your bill as soon as the bill is received. Otherwise, there will be additional interest fees tacked on to the transaction that will make this alternative even less attractive from a fiscal standpoint.

My daughter's university (The University of Texas at Austin) accepts MasterCard, Discover and American Express but not Visa for tuition payments. Must be connected to fees.

It ain't a good deal. I believe the value of the point is one Mil. (less than one penny) depending on the card issuer.

If someone needs the money from a card to make a payment,

Take out a Bank of America Prime Visa.

Buy a Square Credit Card reader.

Transfer the money from the credit card to your personal account via the reader. Transfer cost is approx. 2%.

B.o.A. treats it like a sale instead of a cash transfer.

B.o.A. gives you 1%

Then pay that part of the college bill with cash.

Then, have your Square account disabled for TOS violation.

I have the Citi card and can confirm that its 2% across the board with no restrictions and no fee. I now use it for everything except a few specific categories for which my Amex card rebates 5%.

wendy said:

dave said:

unicorn33 said:
Citi now offers a 2% cash rebate card with no limits and no annual fee. But that's still not enough to outweigh the college's cc charge.

That's only on dining transactions.

Not true Dave. Maybe there is a dining restriction on a different Citi card (or maybe it depends on if the card is issued in the US versus other places) but the double cash back (one percent at purchase and one percent at time you pay the credit card bill) has no purchase restrictions. I know this not because I have the card (but am considering getting it in lieu of an airlines reward card I have) but my brilliant brother-in-law now uses the card.
https://www.citi.com/credit-card-details/citi.action?ID=citi-double-cash-credit-card