Author Topic: Problems With This Idea?  (Read 2734 times)

Gatzbie

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Problems With This Idea?
« on: December 19, 2016, 12:26:24 PM »
Problems With This Idea?

Every college semester, my bill is over 4,000 a semester.  I like the idea of using my credit card to pay it off to get 2% cash back ($80).  Credit cards offer even more when you sign up for new ones.  Iíve seen one offer $500 for signing up and spending $4,000 in the first 3 months.  Supposedly, it hurts my credit when I apply for credit cards and use them a great amount?  I donít understand why considering that I pay them off immediately and only use them for the cash back bonuses.

Also, I would just cancel this credit card once Iím done using it for the semester bill Iím not sure if that is bad for my credit either.

Thoughts?
« Last Edit: December 19, 2016, 12:28:00 PM by Gatzbie »

ender

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Re: Problems With This Idea?
« Reply #1 on: December 19, 2016, 12:56:08 PM »
A lot of colleges charge a fee to pay with credit cards.

Otherwise, your credit will probably take a short term hit if you apply for a bunch but otherwise won't be too badly affected.

There are many credit cards you can get that provide cash back bonuses (or even better travel bonuses). This past year I applied for three cards that were worth $550, $1600, and ~$800 in cash back.

You can sometimes change your card to a free version (rather than the paid versions) which also helps your credit score.

overwhelmed

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Re: Problems With This Idea?
« Reply #2 on: December 19, 2016, 01:04:52 PM »

I was just starting to ask if you were sure that you can pay by credit card. For my child's undergrad & my grad school tuition at 2 different schools, no credit card option, not even with a fee added.

Tay_CPA

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Re: Problems With This Idea?
« Reply #3 on: December 19, 2016, 01:12:57 PM »
You should check out the link on the MMM Recommends credit cards page! Has info about cash back cards along with cards that are great for travel rewards (which is what I get them for). http://www.mrmoneymustache.com/credit-cards/

Also provides tips about which cards to get, how beneficial they are, and possibly some discussion about timing of applying for cards and how that affects your credit, etc. My boyfriend runs the page for MMM and is really knowledgeable about this stuff. Feel free to contact him if you have questions!

With such a large expense each semester, you could get several different travel cards, easily meet the minimum spend, and rack up plenty of travel points/miles. Or you could find the best cash back cards as well.

tonysemail

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Re: Problems With This Idea?
« Reply #4 on: December 19, 2016, 01:16:39 PM »
do the issuers approve applications by college students who don't have good income history?
I would have thought that premium travel cards are harder to get.

plog

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Re: Problems With This Idea?
« Reply #5 on: December 19, 2016, 01:29:44 PM »
It's amazing to me the hoops people will go thru to game an algorithm that has no impact on their life.  Especially in what amounts to really insignificant ways. 

Look, if you are going to apply for a clown car or will be purchasing a house within the next 12 months, then by all means try and pad your credit score to get a lower interest rate.  But if neither of those are on the horizon, then you are just playing a weird self-esteem mind game with yourself trying to marginally improve a rating nobody will see nor really use.   

Worry about charge-offs, bankruptcies and repos effecting your credit score.  Don't sweat the small things unless you are going to use your credit for a major purchase in the next year. 

ender

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Re: Problems With This Idea?
« Reply #6 on: December 19, 2016, 01:34:18 PM »
It's amazing to me the hoops people will go thru to game an algorithm that has no impact on their life.  Especially in what amounts to really insignificant ways. 

Look, if you are going to apply for a clown car or will be purchasing a house within the next 12 months, then by all means try and pad your credit score to get a lower interest rate.  But if neither of those are on the horizon, then you are just playing a weird self-esteem mind game with yourself trying to marginally improve a rating nobody will see nor really use.   

Worry about charge-offs, bankruptcies and repos effecting your credit score.  Don't sweat the small things unless you are going to use your credit for a major purchase in the next year.

This is so misinformed.

Gatzbie

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Re: Problems With This Idea?
« Reply #7 on: December 19, 2016, 01:48:35 PM »
A lot of colleges charge a fee to pay with credit cards.

Otherwise, your credit will probably take a short term hit if you apply for a bunch but otherwise won't be too badly affected.

There are many credit cards you can get that provide cash back bonuses (or even better travel bonuses). This past year I applied for three cards that were worth $550, $1600, and ~$800 in cash back.

You can sometimes change your card to a free version (rather than the paid versions) which also helps your credit score.

No fee here, short-term hit? No big deal to me. Niceeeee :)  Thanks never have heard of that before I'll check it out.

You should check out the link on the MMM Recommends credit cards page! Has info about cash back cards along with cards that are great for travel rewards (which is what I get them for). http://www.mrmoneymustache.com/credit-cards/

Also provides tips about which cards to get, how beneficial they are, and possibly some discussion about timing of applying for cards and how that affects your credit, etc. My boyfriend runs the page for MMM and is really knowledgeable about this stuff. Feel free to contact him if you have questions!

With such a large expense each semester, you could get several different travel cards, easily meet the minimum spend, and rack up plenty of travel points/miles. Or you could find the best cash back cards as well.

I've read that before, I'll check it out again to refresh my memory.  This will be my last huge semester sadly (Spring 2017), otherwise I would of been doing this earlier. Just buy getting 2% back would of been $640 back over the last 4 years if I had known. Thanks I will :)

It's amazing to me the hoops people will go thru to game an algorithm that has no impact on their life.  Especially in what amounts to really insignificant ways. 

Look, if you are going to apply for a clown car or will be purchasing a house within the next 12 months, then by all means try and pad your credit score to get a lower interest rate.  But if neither of those are on the horizon, then you are just playing a weird self-esteem mind game with yourself trying to marginally improve a rating nobody will see nor really use.   

Worry about charge-offs, bankruptcies and repos effecting your credit score.  Don't sweat the small things unless you are going to use your credit for a major purchase in the next year. 

I don't know anything about credit scores besides that its nice to have it good (I might do rental properties someday so I think it would be helpful to have a good credit score for that). Just don't want to do anything that would permanently hurt it or make it bad for the next 10 years. Don't think that by me doing this would do that though.

plog

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Re: Problems With This Idea?
« Reply #8 on: December 19, 2016, 02:06:38 PM »
Quote
This is so misinformed.

Then please inform.

ender

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Re: Problems With This Idea?
« Reply #9 on: December 19, 2016, 03:01:56 PM »
Quote
This is so misinformed.

Then please inform.

Ok, well first of all the more important reason is that credit cards offer a lot of consumer protection even ignoring cash back. We've gotten about 20-25% off everything we put on several of our cards that we got this year.

Maybe $3k or more in value is an "insignificant" benefit to you, it's not to me.

Second, a credit score is something which is trivial to make awesome and has a lot of random benefits. Job applications, rental applications, loan applications (mortgage/car), etc, all allow you significant benefit from having the best score.

And last, for $4k worth of tuition there are many cards the OP could get that immediately give them $500-$1000 in benefits. Getting 25% off tuition for an hour worth of work at most sure sounds significant to me.

plog

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Re: Problems With This Idea?
« Reply #10 on: December 19, 2016, 04:52:09 PM »
ender: it seems I wasn't misinformed, I think you just didn't read my post. 

DailyGrindFree

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Re: Problems With This Idea?
« Reply #11 on: December 20, 2016, 05:39:21 PM »
I guess we were lucky. Our son's school allowed us to use our CSRs to pay for his tuition, room and board without any additional charges. And you cannot beat the benefits and points provided by Chase Sapphire Reserved Card.

MrsPete

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Re: Problems With This Idea?
« Reply #12 on: December 20, 2016, 05:45:33 PM »
I paid every penny of Child #1's tuition with a credit card, and I'm halfway done doing the same thing with Child #2's tuition.  No negatives at all.