My wife just received a letter from BYU stating that, starting in 2006, BYU will no longer accept VISA for tuition, fees, insurance premiums, and loans. American Express, Discover, and MasterCard usage will now require a 2.75 percent service charge. In true Mormon superlative speech, let me just say that this is the dumbest thing in the world.
The letter explains that the University and “its sponsoring Church” will save more than $1 million annually. The letter also suggests that families using credit cards to finance tuition costs should contact the University for other less-costly options. And then, get this, the letter says, “In addition to the significant cost savings, BYU is now able to provide a free electronic check option and a number of enhanced features making internet payments safer and more convenient.”
So let me get this straight, something that wasn’t free in the past is free now because a bunch of money isn’t being spent somewhere else. So wait, how much is the Church saving again? Surely not all of the “more than $1 million” if it is only because of this savings that some other undefined expense is now free to all students. And how exactly can these new services be “in addition to” rather than “because of” cost savings? Hmm…
I have three reasons why I think this is a bad idea, some potentially specific to me and others more universal:
1) As the world moves toward flexibility and convenience with money (in a good way is what I mean, not in the overused-in-General-Conference bad way), BYU decides to be less accommodating to its students while hiding behind “Church savings.” From a business standpoint, this can be a big faux pas. If, as a company or organization, you need to save money, you have big problems if the not-accepting-credit-card-payments option is what you come up with. It’s just better for a price increase to happen with value and/or services staying the same (or improving) rather than the price staying the same and value and/or services being taken away. You can almost always raise prices. But don’t mess with taking away something a consumer has already valued! BYU has chosen the first option every year anyway, so why the sudden change? Speculation time: Is there a bigger message? Are credit cards evil? Should we destroy the fire that we can’t control?
2) I have flown to Eastern Europe a couple of times free of charge because of airline points which I have earned via credit cards. Many of these points have come from tuition payments charged throughout the past few years (none of which accrued any interest, why is it that any talk of credit cards is followed by interest and poorly chosen financing? Am I the only one who uses credit cards for practically everything while paying no interest?). I know this is probably my weakest point, but I was seriously looking forward to the Hilton points we were going to earn in January from my wife’s last semester tuition (we’re so close to the week-free package in Hawaii).
3) While the above is a perk that I and many others could live without, a more serious issue not addressed in the letter was that of tuition reimbursements. I’m talking of employer sponsored programs, which help finance many students’ education. I, for one, have worked for an employer for the past five years that has given me $1,500 toward tuition twice a year. The reason BYU’s change is a problem is because, as the name implies, a reimbursement comes after a payment. So students who need to make a payment before receiving a reimbursement will have to pay the 2.75 percent charge or somehow come up with thousands of dollars in their checking account temporarily.
While I’m all for the Church saving money, if we were to have a post called “The Top Ten Ways The Church Could Save Money,” would this change make the list? Not in my book.