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Best way to pay tuition via credit card

mdcisspmdcissp Registered User Posts: 2,494 Senior Member
I think it was Groovy Geek (thanks so much) who posted last year that the best way to pay the USC tuition bill was via American Express Blue credit card for the 5% cash back. I called Am. Express Blue last night and was told that I have to charge $6,500 in tuition money to qualify for the 5% cash back and future charges qualify for the 5% cash back. I am not sure -- I think the first $6,500. is 1% cash back and then the 5% cash back kicks in beyond $6,500 in one category (tuition). No annual fee. If anyone else knows of a better deal, please post. Hope this helps as the cash back is considerable given the amount many of us have to pay.
Post edited by mdcissp on

Replies to: Best way to pay tuition via credit card

  • Columbia_StudentColumbia_Student Registered User Posts: 5,046 Senior Member
    We pay about $30K a year so this card works out better for us.
    Fidelity Investments
    Fidelity Rewards American Express® Cards
    Invest in your future with everyday purchases.
    Turn 2% of purchases into a deposit in your Fidelity account 1
    No limits on cash rewards
    No annual fee
    With this card you can automatically contribute to virtually any Fidelity account, including a Fidelity IRA, or a Fidelity 529 account.

    I hope my math below is correct.

    $30K X .02 = $600

    $6.5K X .05 = $235
    $23.5k X .01 = $325
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    I think you earn more interest with American Express Blue:

    $23,,500 X .05 = $1,175

    $6,500 X .01 = $65.00

    Total interest = $1, 240.00

    Plus additional charges for the year become accrued at 5% rather than 2%.

    Let me know if my math is wrong. Thanks.
  • 3togo3togo Registered User Posts: 5,233 Senior Member
    edited July 2009
    my daughter's college charges a surcharge if we pay the tuition bill with a credit card which essentially wipes out the advantage of using the credit card ... you may want to check to see if USC also charges for credit card payments
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    Good question. Does anyone know if USC charges a surcharge to use a credit card to pay the tuition bill? I have not heard of this fee.
  • War ChantWar Chant Registered User Posts: 2,341 Senior Member
    There isn't a surcharge, I've paid with a credit card before without any additional fees.
  • Columbia_StudentColumbia_Student Registered User Posts: 5,046 Senior Member
    mdcisp, I misread your post. I thought they only pay 5% up to $6500.
    BTW, USC charges $40 to set up for monthly credit card payment.
  • FauxNomFauxNom Registered User Posts: 1,220 Senior Member
    mdcissp - thanks for the post! We've always gone for the airline miles, but this Amex card seems like a good deal.

    I'm wondering if tuition actually qualifies for the Blue Cash 5% rebate, though. Has anyone had any experience with that? As I read the offer, it looks like the 5% level is available only for "everyday purchases," which the website describes this way:

    Earn up to 5% cash back at supermarkets, gas stations, and drugstores, plus up to 1.25% cash back for all your other purchases.
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    Many thanks to the parents who took the time to check into AMEX credit card for paying the tuition bill. I called again and now my understanding is the following, using AMEX BLUE credit card:

    First $6,500 for groceries, gas and pharmacy = 1 % cash rebate

    If you are under the $6,500 ceiling before better rebate kicks in, then:

    half percent rebate.

    After charging $6,500, the above grocery rebate =5% cash rebate, and 1.25% for other such as tuition.

    Please call AMEX BLUE if you are thinking of using this credit card to double check the details and to check how much you have charged to see if you meet the $6,500.

    Now, I am not keen on airline miles because the airfares are low with advance purchase.
  • GroovyGeekGroovyGeek Registered User Posts: 889 Member
    Did not see this in time to respond, but mdcissp is correct. AMEX Blue has a variable scale and is best for heavy spenders. A month of USC-related charges more or less puts you above the $6.5k threshold where the goodies kick in. While there are other cards that offer slightly higher percentage of rebates, when I did the math the meaty 5% rebate in our second-highest spending category (food+gas) made AMEX Blue more attractive. Being the cheapskate that I am, I supplemented AMEX Blue with a Chase Freedom Visa which used to have "dynamic" rewards categories --- i.e., every month you got the highest rebate percentage in the 2-3 categories you spent the most. I had funneled all utilities, cell phone, cable and internet bills there. They did away with dynamic categories a few months ago, which means they are about to loose me as a customer. I am what the credit card industry refers to as a "deadbeat" --- they have never made a dime off me in interest and never will, yet I try to extract maximum benefit from them in the form of rebates, extended warranties, and miles (my wife is on her fourth AA/Citibank credit card, and has received 20k miles every time she "signs up" only to cancel it a year later when they start charging annual fees). I have no pity and no guilt --- the credit card companies suck off 2% of my purchases every time I use their cards, and we spend quite a bit.

    Any other suggestions for this year? The Fidelity is an interesting one I will have to look at. Perhaps charge a month of USC to AMEX blue to get above $6.5k, then charge the rest to Fidelity to get the 2% rebate... See, I told you I am sneaky :-)
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    One thing to keep in mind is to call AMEX BLUE to see what is your anniversary date. The rebate is for one year from the time of your annual anniversary. If, for example, you have $1,500. in annual grocery charges by the time your USC bill comes due, I think you only have to charge $5,000 in tuition bills to reach the $6,500 for the 5% cash rebate in the grocery category. Anyone considering using AMEX BLUE to charge USC tuition bills, I recommend calling and perhaps double check with a supervisor to make sure you get the info. correct.
  • NewUSCDadNewUSCDad Registered User Posts: 4 New Member
    I just bumped into this thread by accident and feel that I have to say something.
    Credit card companys charge the retailer (i.e. USC) a certain percentage as the interchange fee (a.k.a discount rate). Unlike Mastercard and Visa which publish their interchange fee, American Express negotiates their fee with the retailers in an one-on-one basis. However, AmEx's 2007 annual report (http://library.corporate-ir.net/library/64/644/64467/items/281824/AMEX_2007_AR.pdf) reveals its discount rate, on average, was 2.56% (2007), 2.57% (2006) and 2.58% (2005), which is about 0.77% higher than the Visa interchange fee (1.79%). Any credit card companys that offer rebate % higher than this percentage means they will lose money on the transaction. So, please read the fine print carefully.
    Based on my prior experience with Discovery card few years ago, these high rebate % only applies to few "selected/participated" retailers which enjoy high profit margin, and USC is unlikely to be one of those.
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    Please call AMEX BLUE to clarify. My understanding is once you get $6,500 of charges on AMEX BLUE, the food category (and I spend a lot of money there) earns a 5% rebate. This is the best rebate I have found for food. Doesn't USC accept AMEX BLUE? I don't quite understand how USC or I would be losing money to charge the tuition bill on AMEX BLUE.
    I am sorry-I don't quite understand the gist of the last response.
  • NewUSCDadNewUSCDad Registered User Posts: 4 New Member
    When things appear too good to be true then they are typically not true. American Express charges the retailers transaction fee from 1.1% (Costco) to 3.75% (small retailers). If AmEx pays cardholders 5% rebate then they will lose money on that transaction.

    The 2% rebate Fidelity Rewards Card sounds more real to me. But, I might be wrong. Anyway, I am going to pay USC tuition with the Fidelity Rewards Card and I will post the outcome here in August. Can someone also post the result after paying with the American Express Blue Card?
    Thanks in advance.
  • mdcisspmdcissp Registered User Posts: 2,494 Senior Member
    I am not sure what your hesitation is with AMEX BLUE. If you use the Fidelity Rewards 2% rebate, it sounds (but check with Fidelity) like the entire tuition bill being charged will give you 2% rebate. If you use AMEX BLUE, the 5% rebate kicks in after you spend $6,500 and the 5% is good for the food category. You will not get 5% rebate for USC tuition. I think you get 1.25% or so for the tuition (not sure, but it is not 5%. 5% is only for a specific category such as food ). Call AMEX BLUE and do the math before you charge the bill. Groovy Geek has a good idea of charging $6,500 on AMEX BLUE and the balance on Fidelity rewards if that suits you.
  • uclaoruscuclaorusc Registered User Posts: 1 New Member
    new uscdad, will you please post the result after you paid tuition with american express fidelity creditcard which rewards 2% of total amount paid?
This discussion has been closed.