The Worst Way to Pay for College TuitionPaying hefty college tuition bills twice a year is hard. Very hard. But no matter how tempting it is, don't use your credit card to pay those bills. Why? Most universities assess significant fees for the "convenience" of using a credit card to pay tuition and other fees--so much so that any rewards you get on your credit card are likely to be wiped out, reports CreditCards.com of a survey of 300 of the largest public, private and community colleges.
Overall, 260 of the 300 schools surveyed (87 percent) accept credit cards for tuition payments under at least some circumstances. While tuition payment policies and fees vary greatly among the types of schools and between individual institutions, most do charge some sort of fee.
And the fees are astonishingly high, averaging 2.62 percent. Add that up over four years and you'll pay an additional $3,154 at the average private school, an extra $2,327 for the average out-of-state public university and an extra $932 at the average in-state public college.
"It rarely makes sense to pay your college tuition bill with a credit card," said CreditCards.com's senior industry analyst Matt Schulz. "Even if you avoid interest by paying the bill promptly, the convenience fees outweigh the potential benefits of almost all credit card rewards programs."
Bottom line: If you're paying a $200 fee for a reward of $50 to $100, then it's just not worth it.