Paying Tuition with a Credit Card - Why Credit Cards Might Not Be Evil
September 19th 2007 15:06
Credit cards are evil. That’s what we’re repeatedly told right? Well, here is a situation when credit cards may not be such a bad idea.
I know you remember my $500 limit on my credit card. I requested a credit limit increase, and it was bumped up to $3000 immediately. My next course of action was to wait until November and request another increase to be able to put the full amount, (appox. $6000), on that card.
Unfortunately, I just found out if tuition is not paid by October 9th they send it to collections. EEK! That would not help my situation.
That leaves me with these options:
1) letting it go to collections (BAD!)
2) getting a crappy interest private loan (north of 8% interest, probably higher)
3) taking a loan from a friend
Or
4) putting it on credit cards (0% interest ranging from 3-10 months)
Options 1 and 3 are just out of the question. That leaves 2 and 4. You can see for yourself 0% is better than 8%. I’m an English major and I can do that math!
The plan ends up looking something like this:
- Put $3000 on credit card A, (which is 0% until August 2008).
- Put the other $3000 on credit card B (0% interest until January 2008 – then it gets to 11.99! Yikes!).
- request previously mentioned credit limit increase in November.
- transfer what’s left on credit card B to credit card A in December. Card A has 0% on balance transfers as well as purchases for 12 months. There is a small fee that in no way equals what a private loan would incur.
- pay off credit card A by July 2008.
I do not recommend this to anyone unless you have good control of your finances. A week ago this wasn’t a possibility because I didn’t have a way to make the monthly payments on the cards. Since I just got two on-campus jobs, this plan is now feasible.
This is basically a reminder to look at all your options. Don’t simply jump into private loans that have terrible interest rates if you don’t need to.
I know you remember my $500 limit on my credit card. I requested a credit limit increase, and it was bumped up to $3000 immediately. My next course of action was to wait until November and request another increase to be able to put the full amount, (appox. $6000), on that card.
Unfortunately, I just found out if tuition is not paid by October 9th they send it to collections. EEK! That would not help my situation.
That leaves me with these options:
1) letting it go to collections (BAD!)
2) getting a crappy interest private loan (north of 8% interest, probably higher)
3) taking a loan from a friend
Or
4) putting it on credit cards (0% interest ranging from 3-10 months)
Options 1 and 3 are just out of the question. That leaves 2 and 4. You can see for yourself 0% is better than 8%. I’m an English major and I can do that math!
The plan ends up looking something like this:
- Put $3000 on credit card A, (which is 0% until August 2008).
- Put the other $3000 on credit card B (0% interest until January 2008 – then it gets to 11.99! Yikes!).
- request previously mentioned credit limit increase in November.
- transfer what’s left on credit card B to credit card A in December. Card A has 0% on balance transfers as well as purchases for 12 months. There is a small fee that in no way equals what a private loan would incur.
I do not recommend this to anyone unless you have good control of your finances. A week ago this wasn’t a possibility because I didn’t have a way to make the monthly payments on the cards. Since I just got two on-campus jobs, this plan is now feasible.
This is basically a reminder to look at all your options. Don’t simply jump into private loans that have terrible interest rates if you don’t need to.
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