Budget-Friendly Payments: Which Methods Save College Students the Most?
The life of a college student balances studying, partying, and paying bills—while the first two are mostly fun, the latter can be tedious and, at times, heartbreaking. You’re probably paying way more than you need to for everyday essentials.
Here’s a look at what you’re likely spending your money on, and how to make some smarter payment choices and reduce some of those hidden charges you might not see.
Hidden Costs You Might Not Know You’re Paying
Every time you pay for a service or goods, you could be paying credit card or delivery fees, or other bank fees. Here are some things that you’re probably spending money on, but paying more than you should:
Tuition Fees
School fees need to be paid, and that’s a non-negotiable, but how you pay them might be costing more than you think.
You (or your parents) might think putting it all on the credit card is easiest, and it might be, but you’re getting hit with an expensive transaction fee. The average fee US colleges charge for credit card payments is 2.65%.
Take the average tuition fee of $11,610, and the 2.65% credit card surcharge is $307.66. How many meals in the food hall could you buy with that?
Food Delivery
Speaking of eating, food delivery apps are probably on your phone’s home screen. The average college student spends $210 per month on delivery apps before delivery fees and markups—and those extra charges add up.
What you may not know is that you’re paying more than if you went to the shop. Item prices are often increased by 20%–30%, so vendors can recoup some of their app commission.
Minimum order fees round orders under $10 up to $10—meaning you might be paying $2–$3 for absolutely nothing. Then there are delivery fees.
DoorDash has a 10%–15% fee, and Uber Eats is a flat 15%. If the store is over five miles from your campus, then mileage fees kick in as well. Eating at the campus food hall is likely a more budget-oriented option.
ATM Fees
How often do you withdraw from the ATM on campus? Depending on your bank, you may be paying more fees than are necessary. For example, if the ATM on campus is operated by Bank of America, but your account is with Citibank, you’ll get charged an out-of-network fee.
Also, if you opened your account in your hometown, but you’re studying out of state, you could get hit with an out-of-area fee too.
These add up to just under $5 per transaction. If you’re withdrawing money twice a week, that’s nearly $10 you’re spending needlessly.
Where else are you spending money excessively?
Subscriptions to Student Tools
Tuition, delivery, and ATM fees are only the tip of the iceberg. You’re probably paying for a VPN, a necessary part of student life, but are you paying more than you should? A VPN subscription ranges from $2–$20 a month. The solution? Change to yearly. An annual plan is typically 25%–50% cheaper. That’s a significant saving.
Many students choose an AI platform to help with their writing, with Grammarly being one of the most widely used. Grammarly Premium is $30 a month or $144 a year. That’s a 60% saving.
An even better offer is the one for Microsoft 365. US students with a .edu email account get the first year—that’s right, a year—free and then $5 per month after that. Non-students pay nearly double at $9.99.
What have you learned here? Always check for student pricing first, then look at how much you’d save if you switched to an annual plan. Ok, now that the necessary school stuff is out of the way, let’s look at how you might be spending too much on extracurricular activities.
Lifestyle Subscriptions
What student doesn’t use music to zone out from their hectic life? Spotify is the granddaddy of music streaming, and you’ve probably got a subscription, but are you on the student plan?
Did you even know there was one? Regular subscribers pay $11.99 a month, but students pay $5.99 and get Hulu thrown in as a bonus.
Streaming TV shows, movies, and videos are also popular during your downtime, but if you’re subscribing to Netflix, Amazon Prime, and Disney+, you’re overspending. Narrow it down to one—or better yet, stick to Hulu only as part of your Spotify subscription.
Other Ways to Minimize Spending
We talked earlier about wasting over $300 by paying your tuition fee by credit card. Instead, you can pay by Automated Clearing House (ACH) bank transfers.
Colleges in the US don’t charge any fees to pay this way. In fact, most colleges will allow you to pay them monthly and not in a lump sum, and they won’t charge you any interest.
That way, you avoid a huge outlay at the start of every semester. The only catch: miss an installment, and your payment plan may get cancelled, with interest charged on the balance. This option is ideal for those who are great with and can stick to a budget.
Ditch the credit card, and pay by debit card, Apple Pay, or Samsung Pay instead. There are no fees for consumers to use these options at checkout. They can be used at supermarkets, gas stations, and online for subscription payments, food delivery, gaming platforms, and even online casinos.
Remember those excessive ATM fees we mentioned earlier? There’s a way around them, too: open a bank account at the branch on campus. That way, you’re using that bank’s ATM within their network, eliminating those $5 charges.
Minimizing excessive payments and fees isn’t difficult—take stock of what you’re spending and use our tips to reduce where you can.
Changing to annual subscriptions can save you hundreds a year. Consider paying your tuition in installments, so you’re not out of pocket at the start of a semester. Finally, switch to online payments and open an account on campus. Do all this and watch your savings rise.