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Posted

Got my first college student starting in the fall.  I have the cash side of the equation with different securities, CDs, and investments maturing on a schedule to withdraw as we go so this isn’t a saving for college question but how to best pay for it.

I want to know thoughts on how to go about maximizing the transaction between taking loans, paying with credit cards, etc.  I remember when I was a student my dad had a GMAC rewards card and with 4 boys in college at one time he earned enough to get a new truck.

I have one starting in fall 2025 and the next one in fall 2027.

How do I maximize the opportunity for things like airline miles, cash back, new cars or just floating the cash with a low interest loan and bank the spread on a higher interest CD?

 

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Posted

Are you paying any of the school with education savings accounts like a 529?  If so, you'll get a 1099-Q which you'll want to match-up with the 1098-T tuition statement from the school.  Otherwise, you might risk having to pay taxes on the growth in the 529.  I try to minimize audit risks, so I distributed the 529 payments to the kids and they paid tuition.  All of that ran through their tax returns.  If not, disregard.

 

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Posted

No. I put some in a Roth IRA but don’t think I will need to tap that. Most is coming from taxable investments like EESP or retail brokerage accounts. 

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Posted (edited)
2 hours ago, UTPhil2006 said:

There's a guy on here buying a 2/1 condo for his kid. Not the worst idea I've ever heard. And then sell or keep renting after 4-5 years 

If both kids go to the same college I might do that.

I've also thought of that when I retire.  Rent my huge house to my kids and buy a new one for me to downsize.  

Right now I have a 1% unlimited cashback card I plan to use but there has to be a better payout.

Different Capitol one cards have things like 75,000 bonus miles after spending $4000 in the first 3 months, 1.5% on all purchases and other offers.

Edited by TexasEd
Posted
6 hours ago, mchookem said:

if you're looking for travel rewards, i believe Chase Sapphire is still the most recommended. 

Yeah I think there's a thread maybe on the food forum about rewards cards. 

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Posted
14 minutes ago, Larry T. Spider said:

You would probably be spending enough to take advantage of the big sign up bonus and minimum spend requirements on 2 or 3 cards. 

Yeah, I realized this yesterday but need to do the math.  Some of the cards I saw had annual fees.  I would want to make sure of the redemption rate and cost per mile after any annual fees and figure out if I keep or shut down and cycle through a different card.  I could do 3 cards, Me, my wife and my college age kid.  Is there a restriction or can you do them all under one name?  

One of the goals is to get to Europe next summer.

I'll check food and travel again.

Posted

We use Chase Sapphire Preferred which has a $95 fee but has been well worth it. The signup bonus plus our normal spending quickly got us 2 round trip tickets to Spain with only a little additional money from us. 

Using multiple cards and getting the bonus should be easy for one person as long as they are with different companies.

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Posted

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

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Posted
3 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

my experience too. Same deal with Property Tax payment in January.

the percentage charge kills it.

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Posted
On 6/25/2025 at 1:06 PM, TexasEd said:

Got my first college student starting in the fall.  I have the cash side of the equation with different securities, CDs, and investments maturing on a schedule to withdraw as we go so this isn’t a saving for college question but how to best pay for it.

I want to know thoughts on how to go about maximizing the transaction between taking loans, paying with credit cards, etc.  I remember when I was a student my dad had a GMAC rewards card and with 4 boys in college at one time he earned enough to get a new truck.

I have one starting in fall 2025 and the next one in fall 2027.

How do I maximize the opportunity for things like airline miles, cash back, new cars or just floating the cash with a low interest loan and bank the spread on a higher interest CD?

 

Might look into Yieldmax funds like MSTY or PLTY if you have a short term horizon. They pay a high monthly dividend

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Posted
4 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

Dealing with Texas State (Yay Pac 12?)  and I don't have that information yet but is something I was concerned about.

Posted

Usually not worth using cards on transactions that effectively force you to cover the vendors credit card fees. Sign up bonuses strategies excluded, in my experience these types of transactions usually reward you 1-2% max.  I have a BoA card that I can get 1.75% on random categories but that doesn’t cover the credit card fee on my prop tax bill.  Spending 2.2% to earn 1.75% is bad math.

credit card companies got wise to some of the creative strategies used 20+ years ago. I remember when they allowed cash advances with a capped fee and an extended 0% interest. In the early 2000s, I withdrew $40k for something like a $500 fee. No interest for ~2 years. I stuck it in a 18 month CD earning about 4%. I just had to muscle up the monthly payments. The good old days of using my credit score to earn passive income.

 

Posted

Yes, realizing I will need to use it for normal purchases now.

We do about 3K per month so no issue other than moving subscriptions and autopayments for things like cell service.

Posted

So the next big thing is probably the rewards partners.  I see Chase has BA, Iberian, SouthWest and others on the web site but I cannot find the partner list for Capital One.  Are they hiding it?

Posted
23 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

This has been my experience putting two through on a 529 and the third about to start. I am always looking for credit card points, but the universities charge CC transaction fees that undermine any reward. I just do a bank draft type of payment. 

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