Paying for tuition out of pocket options

[CAPS4SAMMEH]

I'm 20, about to start my third year of college and up until now I've gotten grants to completely cover tuition, books and all that jazz. But this year I'm only getting half the tuition I normally get. I looked over my term bill and was hoping the grant would at least cover tuition and I would only have to pay for books. But turns out I owe them $487 by Wednesday. I refuse to sign up for student loans, I work part-time throughout the year so I can afford payments. This way I also get to avoid a hefty interest rate.

My school offers 3 different kinds of payment plans;
7 Bi-weekly payments = $61~
8 Bi-weekly payments = $69~
4 monthly payments = $121~

I'm torn over which payment plan to sign up for. I'm leaning towards the monthly option, but I wanted some advice. I get paid bi-weekly, $285 a paycheck, around $570 a month. I have other bills to pay otherwise I would probably just make a full payment. My monthly bills add up to about $157 a month (phone, car insurance, pet insurance), but I also pay for my own clothes/toiletries/some food. I have a pet rabbit, I pay for everything when it comes to him. And I also pay for my own gas, I'm 100% responsible for my car, anything goes wrong with it, I fix it. Same goes for the rabbit.

Again, I'm leaning towards the monthly option, but wanted some advice on it. As far as I can tell it doesn't really make a difference which plan I choose, roughly the same amount of money paid every month and it'll all be paid off at roughly the same time.

I'll also have to pay for books at the end of the month. Now, I don't know if this is a dumb idea or what. But I was thinking about signing up for a credit card. Using that to make a full payment, then paying off the credit card. I have no credit cards and probably no real credit history. I thought it might be a good opportunity to build some credit. This would also help me pay for textbooks. But then I have interest fees

So what payment plan should I sign up for? Or should I just get a credit card? The $487 is due by Wednesday, today is Saturday. I was also planning on getting a second job, hopefully on campus. I'm worried about emergencies, if something goes wrong with me, my rabbit or my car I'm kinda screwed.

[disneysteve]

Welcome.

First, absolutely do not get or ever use a credit card if you will not be able to pay the bill in full every single month. It's perfectly fine to charge things on a CC but only if you already have the money to pay the bill in its entirety. Never carry a balance.

The 3 payment options you listed are:
7 payments of $61 - total of $427
8 payments of $69 - total of $552
4 payments of $121 - total of $484

Based on that alone, the 7-pyament plan is the best deal. I'd go with that one since it saves you the most money.

[disneysteve]

As for building credit, could you take the 7-payment plan and still make that payment with a credit card for no additional fee? If so, that would be okay. Charge the payment and then pay the bill in full each month (or even send the payment to the CC company right after you pay the college bill).

As long as you don't carry a balance month to month on the credit card.

[CAPS4SAMMEH]

No the total I owe is $487. All the payment plans would end up being $487. I didn't add the change amount. So the 7 bi weekly, 8 biweekly and monthly plan all end up being $487 in the end. I was just wondering which would be the easiest for me to stick with. And I'm thinking the monthly plan is the way to go.

I may have to put off the credit card idea, since the first payment is due by Wednesday. Though I don't really know anything about credit cards, so if I do decide to get one and use it for tuition or books at some point, what should I be looking for? Everyone in my family has a terrible credit history. My parents have filed for bankruptcy twice, they're really bad with money. So I don't exactly trust their advice. Credit card recommendations would be cool. Thanks

[Jsteinkruger]

So they offer a payment plan, but instead you rather pay the full amount on a credit card? Better off using their payment plan. If you think a one time use of a credit card is going to make a big difference on your credit score, it won't. It is the continual use and paying it off in full every month that builds your credit.

Also, you yourself says your family has bad luck with financials including credit cards, so you want a recommendation on a card because it would be cool? Sounds like you want one just to have one.

Also, I just reread through your payment plans, are you sure you even understand the payment plans? You owe $487 but one of the payment plans makes you pay $552, but you will only end up paying $487? This obviously doesn't make sense.

[disneysteve]

No the total I owe is $487. All the payment plans would end up being $487.

That's not what the numbers you posted indicate. Double check the details just to be sure all of the options have the same total payment.

I'm thinking the monthly plan is the way to go.

Why are you leaning toward the monthly option? If all 3 options are the same, the only advantage of the monthly payment is writing fewer checks, which I understand. Just curious if you are thinking of some other reason.

if I do decide to get one and use it for tuition or books at some point, what should I be looking for?

You should be looking for a card with no annual fee. That's pretty much the main thing. Don't worry about the interest rate because you are NEVER, EVER, EVER to carry a balance so the rate is irrelevant.

You may be able to qualify for some type of reward card. My daughter got her first (and only) credit card last year before she started college, so she was 18. She was able to get a card from Bank of America that gives her a $35 bonus every quarter as long as she uses the card at least once each month regardless of the amount she charges. It's great. She makes one purchase per month and they pay her $35 every 3 months.

[CAPS4SAMMEH]

My mom is always nagging me about my lack of a credit score, so I was just wondering if this was a decent opportunity to build some credit. If I did sign up for a credit card I would rarely use it. Probably only emergencies. I'm responsible and incredibly cheap so I plan out nearly every expense.

I didn't put the exact amount of each payment, I just rounded them down. The 7 Biweekly payments would actually be $69.57, 8 bi weekly would be $60.87 and the monthly would be $121.75. There's also a $40 non-refundable fee to start a payment plan. Which is another reason for contemplating a credit card. I was hoping to avoid paying that.

[disneysteve]

I was just wondering if this was a decent opportunity to build some credit. If I did sign up for a credit card I would rarely use it.

If your goal is to build credit, you'd want to use the card. Just be sure to pay it off in full every month. It makes no sense to pay interest.

The 7 Biweekly payments would actually be $69.57, 8 bi weekly would be $60.87 and the monthly would be $121.75.

You reversed the 7 and 8 payment numbers, which was part of the confusion.