Reader Question: How to pay for son’s tuition with a credit card?

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I love receiving emails from readers with questions about the best way to earn miles and points while going about their daily life.  I received this question from someone in my community who I haven’t had the pleasure of meeting in person… yet!  She’s looking to pay her son’s private school tuition with a credit card, but they don’t accept Visa credit cards.

 

Reader Question

Hi, I have seen you and your posts on the Anaheim Hills Buzz.  I have even subscribed to your blog.  So, I have a question.  I want to use my Capital One Venture card to charge my sons private school tuition on.  I will get double points, essentially 13500 points when done.  However, the FACTS tuition website doesn’t take visa! grrr.  I don’t want to miss this point opportunity, is there a way to do this where I can still use the card?  They only take MC, Discover, and Amex. What ideas do you have for me?

 

My Initial Thoughts

It is frustrating when a vendor won’t accept your preferred method of payment.  I’ve actually encountered the same issue when paying for my wife’s MBA tuition.  I’m not sure what vendors have against Visa.  This totally flies in the face of Visa’a “It’s everywhere you want to be” advertising campaign from a few years ago.

More importantly, this reinforces the point that you need to have diversity in your wallet.  Different cards provide different benefits.  For example, I like saving money buying gas at Costco, but they only accept American Express.  I’ve seen special discounts and benefits for Visa Signature cards, like complimentary wine tasting at multiple wineries in Sonoma county.

 

My Response

Hi Laura, thank you for writing and for following my blog.  If you want to use your Capital One Venture card, the best way would be to buy MasterCard or Amex gift cards in $500 increments from CVS or a grocery store, then pay the tuition with those gift cards.  Unfortunately, you would have to pay approx $4.95 per $500 gift card.

I wouldn’t do it that way due to the costs associated with the gift cards.  I’ll show you a better and easier way that will get you way better benefits.
Depending upon your timing of when you need to pay your tuition, you are better off getting a couple of new credit cards that are of the MasterCard or Amex variety to maximize the points you will earn.
Here’s why I suggest this.  Capital One’s Venture card will provide you 13,500 points for paying for the $6,750 tuition bill.  When you go to redeem those points, that is only $135 worth of airfare based upon a 1% redemption value.
In that scenario, you are much better off using a card like Fidelity’s Investment Rewards card which pays you 1.5%-2% in cash on your purchases.  Then, you can spend your money however you like, not just travel.
Fidelity Investment Rewards
If you did an App Party, you could net well over 100,000 miles with a few cards and meet the minimum spend very easily with the tuition payment.  An App Party is where you apply for multiple credit cards across several banks to earn mega amounts of miles and points.  A good rule of thumb is to only apply for 1 card from each bank… although you can get a personal and a business card from each bank during the App Party, which I often do.
Barclays FICO 2014-03-28
I do an App Party every 4-6 months and my credit score is still great!  Currently, it is at 823 according to the free FICO score I receive from Barclay because I have a couple of their credit cards.

Suggested cards to apply for:

 

Barclaycard Arrival Mastercard
Barclaycard Arrival Mastercard – 40,000 points when you spend $3,000 within 90 days (similar to Capital One Venture where 40,000 points = $400 in travel)
There is a no-fee version of the Barclaycard Arrival Mastercard as well, but you only receive 20,000 points.
Citibank American Airlines Platinum Mastercard
Citibank American Airlines Mastercard – 50,000 miles when you spend $3,000 within 90 days.  50,000 miles are good for 2 domestic MileSAAver round-trip tickets or a MileSAAver round-trip to Japan (10/1 – 4/30).  40,000 miles is an economy ticket to Europe in off-peak (10/15 – 5/15).  (http://www.aa.com/i18n/disclaimers/free-ticket-award-chart.jsp)
American Express Gold Delta SkyMiles Credit Card
American Express Gold Delta SkyMiles – 30,000 miles when you spend $1,000 within 90 days.  25,000 miles is good for a domestic US economy ticket.

Conclusion

With these 3 cards, you’ll earn 120,000 miles and points for $7,000 in credit card spend.  Your travel using these miles and points could be worth well over $1,500, depending upon where you want to fly… which would be more than 10x better than if you used the Capital One Venture card.
I hope that this helps!  If it does, please share with your friends.  I would love to help them make their travel dreams a reality as well!!!
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