Paying part of my tuition with BCP! Help!!

[jenn_bar]

Good morning!

I unfortunately just found out that I was only granted $10,500 for my first and second semesters this school year for law school (full year=$20,500). Unfortunately in order to graduate with no summer school, I need to take out an additional $3,500/semester this year.

Now, instead of taking out another loan at a greater interest rate (>6.8%), I thought of a better plan and just want to verify that it's probably the best idea for this.

I recently got a BCP in July, which has no interest for 15 months. I was thinking that I could buy $3,500 of reloads at CVS, put them into my bluebird account, and pay the school. I could pay directly with my credit card, but it would be an additional $75, instead of $28 in reload fees. If you are unfamiliar with manufactured spending, don't worry, not really my question, I am very comfortable with it and have been paying rent and bills with it for a while now.

I will be paying this off within 6 months by paying $600/month and paying whatever else I put on this card monthly in addition (aka groceries to get my 6%). Then, next semester I will do the same thing until the interest goes up in July, 2014. Somewhere in the middle, my parents are going to help me out, they just owe a lot of money upfront with my brothers tuition.

My main question is carrying this balance. I know it's not ideal, my score is going to slide, but I've never done this before and I guess it's why I need to make sure it's the best option. I am not planning on apping, grabbing a mortgage or car loan anytime soon, so I see this as ideal and a one time thing. I just worried about AMEX, but it's the only card I have with no interest, as I've had my Freedom for more than a year.

Thanks for any and all advice!

[longtimelurker]

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@jenn_bar wrote:
Good morning!

I unfortunately just found out that I was only granted $10,500 for my first and second semesters this school year for law school (full year=$20,500). Unfortunately in order to graduate with no summer school, I need to take out an additional $3,500/semester this year.

Now, instead of taking out another loan at a greater interest rate (>6.8%), I thought of a better plan and just want to verify that it's probably the best idea for this.

I recently got a BCP in July, which has no interest for 15 months. I was thinking that I could buy $3,500 of reloads at CVS, put them into my bluebird account, and pay the school. I could pay directly with my credit card, but it would be an additional $75, instead of $28 in reload fees. If you are unfamiliar with manufactured spending, don't worry, not really my question, I am very comfortable with it and have been paying rent and bills with it for a while now.

I will be paying this off within 6 months by paying $600/month and paying whatever else I put on this card monthly in addition (aka groceries to get my 6%). Then, next semester I will do the same thing until the interest goes up in July, 2014. Somewhere in the middle, my parents are going to help me out, they just owe a lot of money upfront with my brothers tuition.

My main question is carrying this balance. I know it's not ideal, my score is going to slide, but I've never done this before and I guess it's why I need to make sure it's the best option. I am not planning on apping, grabbing a mortgage or car loan anytime soon, so I see this as ideal and a one time thing. I just worried about AMEX, but it's the only card I have with no interest, as I've had my Freedom for more than a year.

Thanks for any and all advice!

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A few questions!  If the only issue is $75 vs $28, I probably wouldn't risk it, just in case Amex objects.

Also, will you spend $6K (or most of it) on groceries?   If not, since the BCP gives no special discount at CVS, I would buy Visa/MC gift cards at a supermarket and load them on to Bluebird at a Walmart (providing you are near one!)  Athough these cost a little more, you would get 6% rather than 1%

For $47 though, probably not worth the risk IMO.

[jenn_bar]

Sorry about the random blank post! On an iPad while my MacBook is at the apple hotel!

It will be $3,500 now and paid off by December and then another $3,500 in January.

Anyway, I was hoping to do the 6% but I have never used the visa/mc gift cards so I was unsure if they work. I usually do vanilla reloads when Freedom has 5% off pharmacies or buy online for free currently through Chase while they waive fees. I would definitely be down to do the visa/mc through my grocery stores if they for sure have pins and work with BB. Which cards are they? The gold ones?

I have thought about the $50 difference, which isn't a big deal and easily explainable to amex if they questioned me because it would be labeled as my school instead of a grocery or pharmacy store. With that said, $210 back for each $3,500 is great especially cause I won't use the rest of the max $6,000 by the end of the calendar year.


On the other hand, I have thought about balance transfer. Due to the fact that the Chase gift card debits are still available without a fee, I was thinking that I could purchase them with my Freedom, pay it down half-way until November (when interest goes up) and then transfer the balance to the BCP. Is this possible or just something I'm dreaming of? Or would it incur another fee?

[jenn_bar]

I just got off the phone with amex and they said that it would not be a big deal if I paid it off in 6 months. The only reason they would flag my account would be if I was paying the minimum each month, which will not happen.

I had him out a note in my account that there would be a large grocery purchase soon so hopefully this will calm things. However, something doesn't tell me amex is going to be easy-going with a $3,535 charge to the grocery store!

[longtimelurker]

When Pins were first mandated, there seemed to be teething issues, and some were not able to be loaded at Walmart.  Now most of these issues are resolved.  However, see the thread

http://www.flyertalk.com/forum/manufactured-spending/1455542-pin-available-now-visa-mc-prepaid-debit... You can read all 147 pages!  Or just look at the Wikipost at the top, where they name one MC that seems to always give problems (US Bank Celebrate) so avoid that.   Since you never know when glitches occur, I would buy one card first and try it out ($500 if you are confident you can use that for purchases if it doesn't load at Walmart, or a smaller amount if you are not.)

The good thing is that this isn't obviously bad manufactured spend, you are just trying to get rewards for a bill that you have to pay. (Amex doesn't need to know that you could pay the bill directly, in many cases you can't!)

[jenn_bar]

Haha I was just reading that forum! I love FT except I find that people are often nicer here than there. I've learned most of my knowledge about BB there, so I will definitely look into it.

That seems the best way. It looks like alex should not give me any issues since it will be paid within 6 months and it was clearly my best credit card option with the 0% interest. No need to drain my bank account or take out another loan.

Thank you!

[longtimelurker]

Yes, should be fine.  Wish I could pay my daughter's tuition ($29K per semester) with a credit card, but they don't take them and BB max is $10K

[youngandcreditwrthy]

Keep your util low and you'll be fine.
Ive keept my util below 30% with Amex in the 0% period and have gotten two 3xclis in the mean time. Amex doesnt mind revolving a bal as long as your payments are proportional.

[jenn_bar]

All is good to go! Went to Kroger and bought a $500 US Bank issued visa prepaid card for $5.95, loaded to BB to make sure all went well, and then went back and bought $3,000 more + fees. Hope to have the check out to my school Tuesday night!

And, believe me, my parents are wishing the same. I just taught them about BB and proper credit cards last week while I was home and boy was it eye-opening for them. They've been wasting so much money in the sense of only getting 1x1 with their delta skymiles and the rest with Costco amex. One day BB will extend their limits I hope!

[longtimelurker]

Great!  

For your parents: with more effort you can find cards which aren't capped like the BCP, but are capped in time (1 year, 6 months, 90 days).   With a thick credit file, usually worth getting and using for whatever time period they allow, and create a lot of spend!