University of Calgary Stopping Payment via Credit Card
March 21st, 2008 by Mike
The University of Calgary is canceling the use of paying tuition via credit cards. The Calgary Herald is reporting that students are outraged since they were never consulted before the decision was made. I think the students have a right to be upset however in my opinion this decision is in the best interests of the student. Here’s why:
1. The University pays around a million dollars every year in service charges to the credit card companies. These savings go to student interests such as scholarships, rather than to the profits of credit card companies.
2. The University of Toronto, Ryerson, and the University of Lethbridge are already doing this, I assume to save money on these fees as well.
3. Some students are arguing that this decision will make it tough to finance their education. Let’s face it, nobody finances their education by credit card. If they did they would never get out of debt at the interest rate they charge! I think the real reason why some students are upset (in addition to not being consulted) is because they won’t be able to collect some serious air miles. Can’t blame them as when I was in school I always paid with a MasterCard for this exact reason. Can’t say it did much for me though as my rewards were so small in comparison to the money I put on it over the years!
4. The Herald also says that some students use credit cards to pay off their debt as their student loans may not arrive in time. Well if a student is worried about this they can bring in their notice of assessment from the government to show that even though the money hasn’t arrived the loan has been approved. The University can then put up a deferral of fees on the student’s account which will prevent any late fees from being charged. Furthermore, the University only charges 1% per month on overdue fees, this pales in comparison to the rates credit cards charge should payment be late.
5. Some students say that can pay online using their cards making credit cards convenient as they wouldn’t have to wait in line to pay at the school. This is definitely true however there is a drop box at the fees office where students can drop off payments by cheque and so they would never have to wait in line to make a payment. They can also pay through their online banking as well.
What do you think? Feel free to let you thoughts be known in the comment section below this post.
Possibly related:
-Credit Cards, What Are They Good For?
-How to find good credit offers
-Money, Money, Money!!!
-Student Loans - Parent Plus Student Loan
-Cheap Long Distance India Phone Cards
Posted: March 21st, 2008 under McKinlay Musings.
Comments: 12
Good article Mike and well written! You showed the negatives and positives and actually had info that is useful to many students!!
Daddy
Thanks Daddy!
Here’s a thought… why not pass the service charges on to the students? That way, they can still use their credit cards, they just have to pay a bit more to do so. Simple.
Good point Nick and I know they’ve considered that. However I think that if the students have a choice between paying an extra 2.5%(at least) and getting points, they will not pay by credit card cause it just isn’t worth it.
I’m sure the school did this for two reasons and, regardless of whether the students appreciate it, it could be better for them in the long run.
The credit card fees are pretty stupid. Back in Canada, any place that I worked at that would accept credit cards would pass on the 1.9 to 2.9% surcharge on to the customer, and we would often confirm with the customer if they really wanted to pay by credit card before putting it through. Some people decided that cash or debit was better after hearing about a 2.9% fee being added to a $4000 purchase.
Although it doesn’t sound like much initially, these fees do add up over time.
Another reason would be the number of students that are essentially financing their education with poor credit options. I’m the first to admit that when it comes to paying the ridiculous tuition rates, many students are hard pressed to come up with the cash and need to take out a loan. Heck, I racked up just short of $30,000 in student loans before earning a piece of paper that I couldn’t use for seven years.
I don’t want to paint the kettle black but, most students can’t handle money properly and get themselves into serious credit debt before finishing post-secondary. By preventing students from using credit cards to pay for tuition or books, students will be forced to use the student loan system or ask their parents for the cash. That said, I can see it being a bit of a problem for the parents that are putting their kids through school.
There are, of course, several ways to “get around” this. Some credit card companies allow their customers to write cheques off their card. I could do this with my Bank of Montreal MasterCard, and my CapitalOne MasterCard. Although the money comes off the card, it’s technically a payment by cheque.
Either way, it’s all good. At the end of the day, accepting or denying credit card payments are the privelige of the business. In this case, the business is a post-secondary institution. If the students aren’t happy with it, perhaps they can “shop” somewhere else.
– I wonder how many of these outraged students have an idea of how different the world was 25 years ago. With a little bit of perspective, perhaps they’ll realize that their options aren’t quite as limited as they seem, nor is their life any less convenienced by this once-a-semester activity.
Excellent points Jason!
I am glad to have read all of the comments. I only saw it from one side so now i can see some of the alternatives and perhaps it isn’t as inconvenient as I thought it would be. It is too bad that they didn’t talk to the admissions department first before the media since this will impact the admissions department.
Balance way explaining the good and bad thoughts regarding credit cards. Your article is really nice mike. Keep it up!
I’m glad you enjoyed it.
Credit cards are bad mmmkay?
Yes they are… mmmmmkaaay!
Your site is great and I really appreciate it! I have always enjoyed reading your site.