How To Earn Points and Miles By Paying Tuition

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It's tough to think of a more significant life expense than tuition. If you have young children, the preschool bill can be hard to swallow. With tweens and teens vying for the best private schools, your hope for their future is met with the anxiety of what these opportunities cost. When it's time for college, whether it be your own or your children's degree, the tuition and additional expenses seem to be ever lingering.

Today, let's look at the opportunity such a large expense yields when it comes to earning credit card points and airline miles — a silver lining I actually look forward to when it comes time to pay for school.

College Students

Why Pay With a Card?

Credit card rewards far surpass what you may be familiar with from even a few years ago. Transferable bank points like Chase Ultimate Rewards or American Express Membership Rewards can yield an unbelievable value. These aren't your 1% cash back rewards from the 1990's; they're points that can book business and first-class flights, hotel suites, or economy flights to Europe for an entire family. The amount of tuition you have to pay can realistically earn you rebates in the form of credit card rewards to the tune of 5-10% back.


Payment Avenues

Paying tuition with a credit card may or may not be a foreign concept for you. Those familiar with the idea cite the convenience fee or processing fees many schools charge when using a card. These fees are what the school is charged by the credit card issuers and typically range anywhere from 1-3%.

The fee can negate the value of any rewards you would earn from your credit card, making many parents decline to pay the fee and forego using a card. If the school didn't pass the fees along, they'd be out the percentage themselves. The good news is there are ways to overcome these fees and still come out ahead when using a credit card.

First, there are some schools who still do not charge a convenience fee for paying tuition with a credit card. Money magazine compiled a list of 18 such schools in 2016; I called a couple of them to confirm there still is no fee. I spoke with Auburn University's Billing Receivables Department, listed in the Money article, who confirmed there is still no fee to pay the school directly online with a credit card. As one of the largest universities in the South, I was pretty surprised to hear this. I asked if the school included the credit card issuer's fee in the prices they charge or if they negotiated their rate with the card issuers to a significantly lower rate — a possibility considering the transaction volume the school processes on an annual basis. The representative declined to elaborate on how this was done, but said they were pleased they could offer the service at no fee to their students.

Make sure you call your school's billing department and ask about the convenience fee. There may even be a smaller fee for paying with a card in person rather than online, as some schools contract their payment processing to third-party systems which make money by adding their fee on top of what the credit card issuer charges. If you pay in the school's office, you may be able to reduce the fee.

As an alternative to paying the school directly, there are third-party payment processors which allow you pay almost any bill with your credit card. In return for a processing fee, services like Plastiq will accept payment from your credit card and mail your debtor a check which they deposit as if you wrote a personal check. Make sure you spread your referral link for these services around your friends, family, and coworkers so you can build up your payments which you can send fee-free.

Editor's Note: Plastiq increased its processing fee from 2.5% to  2.85% on July 1, 2020. It's a good idea to reevaluate the bills you pay to make sure the rewards you earn still justify the higher cost.

Plastiq logo

Value Proposition

Let's look at the potential returns a credit card can earn you when paying tuition. I'm going to use $20,000 a year in tuition payments — on the low end for private universities and grad school; on the high end for private high schools, community colleges, and state schools. Four years (fingers crossed we aren't on the five-year plan) will cost you $80,000 for the piece of paper that puts a check in a block to open doors. $80,000 in credit card spend, not including welcome bonuses, could earn you the following rewards:

When you combine the above rewards with welcome bonuses over four years, you can quickly compound your earnings into a very sizable loyalty portfolio. Consider the average card welcome bonus right now is 50,000-100,000 miles or points, and even just one new card a year in addition to $20,000 in spend a year would net a minimum of 280,000 points or miles, most likely closer to or exceeding 400,000. All at the same time expanding and building a stronger credit portfolio, something you've likely neglected; having available credit is a good thing and will help you increase your credit scores!

Pick the Right Card(s)

There are two main factors you need to consider when deciding on a credit card to use for tuition: the associated welcome bonus and the rewards earned per dollar. Tuition does not qualify for any bonus categories on credit card spend, so you need to pick cards that have a strong base earning rate and a valuable welcome offer. Here are our top recommend cards to use when paying tuition:

  • The Amex EveryDay® Preferred Credit Card from American Express — You'll earn one point/$ on tuition spend but also earn 50% bonus points on all monthly spend for any statement period where you have at least 30 transactions with the card. The welcome offer is 15,000 Membership Rewards points after meeting the minimum spend, so make sure to keep an eye on the card.
  • Bank of America® Premium Rewards® Credit Card — If you hold $100,000 in assets with Bank of America and/or Merrill investment accounts, you qualify for Platinum Honors Preferred Rewards from Bank of America. This means with a Bank of America Premium Rewards credit card, you'll earn 2.625% cash back on all purchases.

Don't forget, if you have a spouse or partner and you're trying to keep your expenses separated, they can pick up their own cards and pay tuition with them, potentially doubling the values I have listed above. Regardless of the path you take, be aware of the Chase 5/24 rule and new account requirements across the banks.

Bottom Line

Even if your school charges a convenience fee for using a credit card or if you use a service like Plastiq, once you include an associated welcome bonus from a new credit card, you are still going to come out way ahead with the rewards you earn. Hopefully, you're lucky enough to attend a school that is fee free.

Most importantly, you need to pay credit cards off in full every month so you are not charged interest on any balances. If you carry a balance with interest rates near 20%, using a credit card is a losing proposition. Make sure to join our Facebook Community Award Travel 101, where you can chat all things credit card rewards and ask further questions on maximizing your tuition expense.

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  • I thought this was going to be one of those posts about “accidentally” over-paying tuition and then requesting a refund. 😉

  • Federico says:

    Or move to a country where there is no college tuition and use the money you save to travel and earn more miles!

  • @Rachel Arreola says: “I agree with Howard. Don’t knock it. Sometimes a small fee or a few dollars is worth the peace of mind that it is paid and out of the way. Using checks and trusting the USPS is falling by the wayside IMO”

    Yes, but Howard’s point was that it was worth it because of the math making sense.

  • Credit card fees are not banned in the EU. Trying buying an airline ticket online for a flight within the EU on the website of several EU airlines…

  • In the U.K. and across the EU credit card fees are banned and I use a credit card Amex MasterCard or Visa for everything. Every transaction gets me miles or hotel points and I have paid private education costs with no fees.

  • The American University mentions that “Convenience Fees are not charged for enrollment deposits (tuition deposits and housing deposits).” What do tuition deposits mean specifically in this instance?

  • I wish I knew about this before Med school…..oh the possibilities that could have been.

  • Bill from Maine says:

    @Rachel A-Why blame credit cards for a persons lack of discipline in spending and payment habits. Credit card companies are in business to make money and this blog always, always tells a person that if they do not have the ability to pay a credit card off when the balance comes due, than this is not the hobby for them. It seems our world today blames corporations for every social woe rather than actually looking in the mirror and laying the blame where it belongs.
    No one spends over their means unless they make a decision to do so.

  • I never thought of that! I have years before I have to worry about that. But I will really have to think about this later and probably take advantage of this. Oh the sign up bonuses that I could benefit from! lol!

  • charles j says:

    For a fee of about 1.87%, you can pay your federal taxes, and some states also provide for credit card payments for state taxes, and you can gain similar benefits.

  • Bill from Maine says:

    One other comment…wouldn’t using the AMEX Business Blue card give you 160K MR points ($20K per year X 2 points per $ X 4 years = 160K) plus no annual fee be a better value than the AMEX Platinum Business?

  • Bill from Maine says:

    Kids gone, college expenses all paid but I sure wish I thought of this when paying their bills years ago. Now I use a credit card for everything, and I mean everything. I purchase a fountain coke from a local convenience store for 75 cents everyday and it goes on a credit card. This year I rebuilt my entire kitchen and mudroom (it’s Maine slang-come up here during March and April and you’ll know what I mean) and convinced the contractor to let me pay all his bills with the supply companies he used using my credit card. Think about all the places you can use a card rather than pay cash. I did and it’s mind boggling.
    I also like Logan Fisher’s idea of contributing to a 529 plan although in my day of exploring college financing found out that the less money a family had the more generous the financial aid became. I remember a parent asking a representative from the U of ME financial aid office if emancipating a child would give them an upper hand in securing more favorable financial aid.
    Now I’m going to find out if I can fund a 529 with a credit card. That would be great.

  • I actually did this myself way back when! It is worth it when you do it to get the sign up bonus – but you have to be careful. I split my payment on two new cards to maximize benefits.

  • Why not do both a 529 and earn miles?

    Giftofcollege gift cards if you can find them are $5.95 or $4.95 for $500 card. Supposedly they will eventually come to best buy, after toysrus closed only heb grocery and freds drug store supposedly carry them…

  • I remember back then when I took some classes at the community college I was able
    To pay using a credit card at the cashiers desk without fee… hope it’s still fee less for those in school

  • @Ed. I’m with you; I rarely find it worth the 3-4% added ‘convenience’ fee for using a credit card. I understand why some merchant & institutions do it, but all it motivates me to do is find a different provider that doesn’t penalize my points-earning!

  • Rachel Arreola says:

    Howard why do you think debit card rewards went away? Like the earning of flyer miles etc with debit? To encourage the world to apply & use credit and spend over their means?

  • My oldest grandson is beginning college this year and I intend to forward the link to this article to his parents.

  • Logan Fisher says:

    For me, using a 529 plan with a solid ROI is way better than earning miles.

  • My husband is going to school and his university welcomes credit card payments… of course, I would prefer free higher education but I digress….

  • David Damsker says:

    I wish my youngest daughter’s daycare would do this. I would jump on it in 2 seconds. At $1,200 a month, that’s still not chump change.

  • Maryjane says:

    When I was still in school a few years ago, I tried to pay my tuition with my credit card as was allowed with no fees. My school wouldn’t let me because I was a “financial aid” student. (I was actually classified this way only because I was using partial GI Bill benefits. There was no other financial aid) I argued with them but they wouldn’t budge. They said that my parents could pay with a credit card. This was pretty funny at my age and after a full military career. However, I was not going to let this technicality cheat us of points…my parents paid with their credit card and I paid them back. We go to great lengths in this hobby but the rewards are worth it.

  • Rachel Arreola says:

    I agree with Howard. Don’t knock it. Sometimes a small fee or a few dollars is worth the peace of mind that it is paid and out of the way. Using checks and trusting the USPS is falling by the wayside IMO

  • Paul Ryan Wilkinson says:

    I’m usually willing to pay up 2.5% in fees, and always use my amex EDP or chase FU.

  • Sebastian says:

    I know for sure I’m more than happy to not having to pay these fees anymore – they were really high!!

    Nonetheless, a great way to earn Points on the way, i have to admit, i never used it during my time..damn!

  • we did this when our oldest daughter went to USC. earned lots of miles

  • I think American University offer tuition payments with your credit cards WITHOUT the convenience fees.

  • which card is the 3% card? @.@

  • I am glad I no longer have these expenses. I remember feeling lucky when one child’s college tuition could go on a credit card with no fees for using it. Made paying tuition feel a little less painful when receiving a bit of payback.

  • I never use my credit card to pay a bill if the convenience fee is more than a few dollars.

  • Unfortunately, few of us have kids that go to schools that don’t charge the fees. Believe me, I would have taken advantage of this if I could. For all I spent for my kid’s education, I deserved a trip. Too bad the schools didn’t think so.

    • Nice post Richard. One of my kids schools accepted credit cards without fee. There are many things families can do to reduce (hack) the cost of college! Leverage your offers! Apply for outside scholarships! Seek merit and/or need-based grants!