Don’t let the cost of college get any higher than it is.  College is already expensive with the current prices and tuition increasing at a rate of 5% to 15% this year.  The use of credit cards to pay for college tuition is on the rise.  You may be adding another 25% on top of that college bill by using credit cards. 

College Bills Too High!

Look at this scenario.  You receive a notice saying your tuition is past due and you have less than a week before you’re purged from the system.  That low interest loan you’re waiting on still hasn’t come in.  You pull out that credit card or write one of the handy convenience checks to pay for tuition.  Your tuition has been paid!  Next month that credit card bill comes in and you find out your payment is a lot higher than it normally is.  You look a little further and notice that the the interest rate has jumped up from 6.99% to 14.99% or you see an interest rate of 24.99% next to the amount of that convenience check.  So what happened?  We’ll go over these actual occurences, what steps to take, and their resolution.

In the first case, the interest rate went up from 6.99% to 14.99% and the account was not past due or over the limit.  So what happened?  In the previous month’s bill there was a note in the body of the bill that said “Important Information About Your Account: Please see the enclosed Notice of Change In Terms and Right to Opt Out for Important Changes to your Card Agreement.“  This note was in the middle of the statement where you normally see advertising for holiday specials, 10% off, or receiving extra credit card dollars.  So what should you do in this situation.  The key is not to ignore it.  Call up the credit card company and talk to one of the representatives.  Be polite and calm when talking to the representative.  When you approach calls this way you have a better chance of getting results.  At the same time, it’s not the representative who is charging you an exorbitant rate.  Many of them understand the situation you’re in.  Ask what is the reason for the increase in the interest rate.  In this case, the Opt Out paperwork had to be submitted and if it wasn’t you were subject to the new conditions.  What’s the best way to resolve the problem.  The representative said the original contract arrangement could be retained through the expiration date of the card.  She said the interest rate will be adjusted to 6.24% and they will be refunding the difference in charges from the higher interest rate.  Surprised!

In the next scenario a convenience check was used.  There were a variety of offers from the credit card company about the zero % interest rate using the convenience checks.  In a phone conversation with the credit card representative they wanted to add an additional month to the zero % offer if a balance transfer was made at that time.  In this case some expenses came up and the convenience check was used.  It won’t be a problem since it’s at zero interest.  So what happened when the next credit card statement came out.  There was an interest rate of 24.99% posted to the amount of the convenience check and the monthly payment tripled!  What steps were taken next.  The credit card company was called and representative took a look at the charge.  They said this was one of the regular checks which have a 24.99% interest rate attached to it.  How can it work this way when a month earlier the interest rate was zero %?  The next thing to do was ask the question-How can you help out?  They looked into it further and said they would be able to reverse this transaction and adjust the interest rate.  The end result was the interest rate was changed to zero %.  It took some work but the calls paid off.  Be sure to react quickly when these changes occur. 

The first rule and lesson to take away from this is to avoid using a credit card.  In the event you do, keep your college costs down by addressing changes in payments and interest rates immediately.

Tags: Cost of College, Credit cards, Financial Aid, High interest credit cards, Lowering your interest rate, Paying For College, Paying for college with credit cards, Student Loans, Tuition Increases