Ever racked up credit card debt to cover school fees? You are not alone…
A recent survey of Australian families has revealed 1 in 7 are using credit card debt to fund the cost of their private school fees.
This finding is consistent right across the spectrum: those paying fees higher than $25,000 per year are just as likely to use credit card debt as those paying under $5,000 per year.
Many families are familiar with the scenario: school fee bills arrive, there isn’t quite enough cash lying around to pay them and so they end up on a credit card. The card is then (hopefully) paid down over the next few months, often just in time for the next school invoice to arrive.
Of course using a credit card to pay is not an issue on its own. Assuming the card is paid off on time, it is a clever way to get an extra 50+ days to pay and you might even earn some reward points in the process.
However, for many families (14% of those surveyed) the credit card debt is carried and instead used to help spread out payments over the year and beyond. Unfortunately, this is an extremely expensive solution.
Not only will the school charge somewhere between 1% and 3% to process the payment, interest rates upwards of 20% per annum will be charged on the debt outstanding.
It also adds stress. Managing credit card debt is a huge weight on one’s shoulders. Shuffling cash around and keeping on top of minimum payments can be an endless struggle. Often it feels like you can never quite get ahead.
Fortunately, there is a better solution.Edstart offers parents a customised long-term payment plan for school fees. We take into account specific family circumstances to offer the best way to stay on top of these costs. For example, fees for the most expensive years with multiple kids in school can be spread out over a longer term, while for others it may be best to pay within the same year of tuition.
Edstart is extremely convenient. We charge one simple payment (fortnightly or monthly on the day of your choice) to cover all school fee costs, regardless of how many different schools your children attend. Every time you get a school bill simply forward it to Edstart and everything is taken care of.
Edstart is also low cost. The underlying interest rates on our payment plans are less than half of the average credit card interest rate and cheaper than an unsecured personal loan or overdraft from a bank. There are no hidden fees, charges or early payment penalties.
Never before has a service like this been offered for school fees. We are very proud to be the first company to deliver this innovative solution and we look forward to helping eliminate school fee credit card debt right across the country.
Jack Stevens is the Founder & CEO of Edstart – a new financing solution for education fees based in Sydney, Australia.