Credit provides loan alternatives
Student uses plastic to pay his college tuition
By Ashley Hopkins, staff writer
Posted on November 6, 2006

Brian Creasy graduated from JMU in 2001 after paying for three years of his undergraduate degree with a credit card.

Creasy, currently a graduate student in the psychological science program, decided to charge his tuition when he felt he would be ineligible to receive financial aid.

“I was bringing in enough money on my own by working all the time,” Creasy said.

Creasy’s story is becoming a trend in recent years, with more than half of college students owning at least one credit card, a quarter of which use their cards to pay tuition, according to MSNBC.

A July MSNBC article stated that overall, more than four in 10 student cardholders carried a credit card balance from month to month, with a median balance of $1,000, according to an American Council on Education analysis of 2003-’04 federal data.

In addition, the study showed that 55 percent of students who used their cards to pay tuition were carrying a balance, compared with 38 percent who had not charged tuition.

While financial aid and installment plans are often used to cover tuition due to their lower interest rates, there are benefits to using a credit card.

For many, credit cards are more convenient than financial aid, which often require a lot of paperwork. 

“Using a credit card was much more convenient than having to find my tax information, fill out all the financial aid paperwork, wait to receive a pin number and then fill out some more paperwork,” Creasy said.

Creasy also said he benefited from using a credit card because it allowed him to deal with payments sooner rather than later, forcing him to prioritize his time. In order to keep his balance low, he had to work more than 30 hours a week while attending classes and completing his schoolwork.

“I had heard so many horror stories about students graduating with huge student loans to pay off,” Creasy said. “One of the reasons I kept paying by credit card was that it forced me to deal with the problem in the present and not put it off until I graduated. It worked for me because I’m one of those strange individuals who actually do a better job when I’ve got more on my plate.”

Although Creasy listed the many benefits of paying tuition with credit cards, he was quick to admit that it’s not for everyone and said that he would recommend applying for financial aid.

“For those who have doubts about whether or not they may qualify for financial aid, I would suggest applying anyway,” Creasy said.

Sharon Michie, a credit counselor for AAA Alliance Credit Counseling Inc., also warned against using a credit card for large expenses.

“We as a society are ingrained that credit cards are the way to go,” she said, adding that they are quickly made available to people as soon as they turn 18. 

Despite the fact that they are readily available, Michie thinks credit cards place students at a disadvantage if they are unable to keep up payments and consistently pay on time. In cases such as these, interest goes up, which can increase debt and lead to higher payments in the future.

“In hindsight, I probably should have applied for financial aid just to have it there as a cushion in case money got tight,” Creasy said. “When I got accepted into graduate school, that is exactly what I did. I still have yet to spend a dime of it, but it’s nice to know that it’s there.”