Credit Card U

Yet another University has refused to take credit card payments for tuition because the cost is too high, and they can redirect those costs towards education:

http://www.cbc.ca/consumer/story/2009/08/07/credit-cards.html

By my count, there are least 15 Canadian Universities that have done this (TWU included). This is worth many millions of dollars. When are the credit card companies going to notice and respond? This is already lost revenue for them. I think they could get some good buzz by responding and making a deal to cut the costs or make donations towards academics if these universities reversed their business decisions. Clearly, students aren’t making attendance choices based on these university decisions, so the money is getting spent regardless. The only change is the credit card companies are out their percentage.

On the positive side, students have been able to find ways to pay that have lower interest rates, albeit without the same convenience or rewards (e.g., Airmiles or some other points plan).  That’s the good story.

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4 thoughts on “Credit Card U

  1. I think that it is a good thing that universities aren’t allowing students to pay for their education with a 19.5 + percent interest. There are other borrowing options like Student Loans and lines of credit that have much lower interest rates. And, if you can get a credit card you can get a line of credit.
    Not that I wouldn’t have loved the pc points or airmiles on $15 000/yr law school, but in the end that could have been a financial disaster!

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    1. Melissa, I completely agree with you; however, many parents contact us wanting to use their credit cards to pay for their kids’ tuition. That way, they get the points/airmiles/convenience/whatever.

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  2. I’m curious whether the small institutions will follow suit, given that we compete on both price and convenience, and the credit card is just one more thing to make the experience better. I think that at a certain price point and desiring a certain customer experience will continue to do so.

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  3. Steve, When I was at Briercrest College (a small institution) we accepted credit card payments partly for convenience and customer experience, but also because it was yet another method of keeping our accounts receivables low. We didn’t have a lot of wiggle room with the bank to extend their credit to us and low AR and low collectibles was really important to us. But we also offered credit counselling in our student finances office. When our student finance officer suspected students were going into significant debt, she would meet with the students to give counsel.

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