Is Accepting Credit Cards to Pay Tuition a Good Idea? The Answer May Surprise You!

Good Idea shutterstock_389055910 (2).jpgWhat do filling up the gas tank, grabbing a coffee from Dunkin Donuts, and making an impulse purchase at Target all have in common? For many, it’s the form of payment. More than half of all credit card holders use their cards for everyday spending. [1]

It has also become more common for families and students to use their card as a form of tuition payment. However, this convenience can come with hidden costs.

Of the 85% of colleges that accept credit cards for tuition, more than half pass a fee onto the cardholder. The service fee can chip away at the perk of using a rewards card to earn miles for a dream vacation. In addition to this expense, cardholders may also run the risk of falling behind on payments. For these reasons and more, many colleges may be hesitant to accept credit cards.

Whether you swipe it or insert the chip, make payments online or through your phone, credit card transactions occur daily. There is a growing demand from families and students to also charge tuition payments. If your institution currently accepts credit cards or are on the fence, here are a few things to keep in mind:

  1. It is important to be transparent and educate the payer of any fees so they can make an informed decision.
  2. Instead of charging a flat rate, consider offering a choice when it comes to service fees. Intelligent RateTM assesses the fee based on the card type being presented for paym To learn more click here.
  3. Often times it is a personal financial matter. Families could charge a portion to their card and pay the rest through other methods accepted by your institution.

To learn how the University of Minnesota and the University of Colorado at Boulder adopted credit card acceptance take a look at our free eBook “Higher Education Economics – Beyond Tuition”. This eBook also includes articles on other economic issues facing higher education, including:

  • State funding and other sources of revenue
  • Business incubators and fostering innovation
  • The cost of maintaining town-gown relations
  • Investing in facilities maintenance and modernization

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[1] http://www.creditcards.com/credit-card-news/payment-method-statistics-1276.php

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