I am an American PhD student currently studying full-time in England.
I am a mature student, late 30's, and I have an 18 year credit
history, so I know the value of paying bills in full.
I live on student loans and due to a deal from my credit card company,
I have been putting my college tuition on my visa in order to get
double frequent flyer miles. In other words, charging my $16,000
annual tuition nets me roughly 30,000 frequent flyer miles.
Last year this worked great and I am now able to travel home for
Christmas to the US on my miles. Last year I paid the credit card bill
off in full, no problem, no interest payments, 30,000 miles.
This year, however, the US government has changed loan allocations
from one lump sum to two payments six months apart. This has
effectively cut my funding in half until March. But I still need to
I have a tuition payment due in January. With the exchange, it will be
about $5,000. Lacking the lump sum, I would not have the money evn
without credit cards. But I do have credit cards.
I cannot ask the mileage card company for a limit increase, because I
just did that last summer. So now I risk losing the nearly 10,000
frequent flyer miles I was counting on for travel home next year.
I have another credit card that could cover the balance no problem. It
has a decent balance, which I never use, but it has no miles or any
other benefits. Also, it is at 22% interest, whereas my mileage card
is at 13.99% interest.
Granted, the 22% rate would only be for about three months before I
pay it in full in March, but I still feel that is a lot of interest to
pay for no benefits.
It has been suggested to me to apply for another lower interest credit
card and pay the tuition. My credit score is very average, mid-600's,
and I'm not sure I could get a much better interest rate on a new
card. Aslo, with all my revolving student loans, I may be a huge risk.
But ther are companies I could tap. Capital One, for example, offers
airline miles and a 17.81% interest rate. I could put the tuition on
there and still get mileage and then pay it off in March. Another card
is the Marbles card, here in the UK. It has about the same options as
the Capital One, but I am not sure I can apply as a UK-resident only,
and with no income.
Okay, so that's all the tedious background info. My actual question is this:
-- Given my current situation, is it worth applying for another credit
card to reduce the interest by nearly 5% and get airline miles?
-- Or should I just bite the 22% bullet and use the credit I already
have, paying the higher rate for a limited time and then paying off
both cards in full in March?
--If the answer is to get a lower interest card, can I qualify for a
UK card as an American citizen? Wile they use my american FICO score?
Or am I required by law to only apply to a US card?
Like I said, I am a mature student, and I've outlived all the bad
student moves with my credit score (which is lowered because I have so
many student loans.) But I am very good about paying off cards and not
using them. I only use the mileage card and my bank debit card for all
transactions. But due to the high exchange rate in the UK, I just
don't have cash to cover tuition in January, plus rent,
transportation, endless VAT's, utilities, books, etc. all at a very
high exchange rate of $1.82/$1.89 per Great British Pound.