Credit Cards That Help You Save for College
Upromise
The Savingforcollege Investments Reward Credit Card is not a "529 college savings card" in the strict sense. Rather, the card's main distinguishing feature is that it allows earned rewards to be directed to any type of investment account - "a savings account, a mutual fund, a 529 college savings plan, or even a money market account". Presumably, rewards could be used for retirement savings or other non-college uses. Rewards are earned at the standard rate of 1% with no cap. There is no associated merchant network where additional rebates can be earned; however, the card is affiliated with Savingforcollege.com, an excellent source of information for all types of college savings plans.
BabyMint
Understanding the MBNA credit 529 card is quite simple: Use the card and get 2% of eligible purchases automatically deposited into one of three 529 plans managed by Fidelity Investments. There are no complicated tiered rebate structures to monitor, no brand-specific rebate variations - just a flat 2% on pretty much everything you buy with the card. A few obvious exclusions (e.g. no rebates on ATM advances, balance transfers or credit card fees) do apply, but these are standard with all rebate cards.
The Fidelity/MBNA 529 Card pays this rebate on up to $75,000 of purchases ($1,500 maximum rebate) made in any 12-month period. Competing 529 reward cards typically pay 1% unless you buy from "partner" merchants in which case the reward levels are higher. The very generous 2% reward level coupled with the high annual rebate cap make this one of the best reward credit cards anywhere.
BabyCenter
Holders of Upromise college savings credit cards will see a change in March 2009: Bank of America will replace Citi Cards as the issuer of the Upromise credit card. This means that all current Upromise cardholders will be receiving new cards.
Word is that there are no substantive changes to the credit card terms or benefits planned at this time - just a change in the card issuer. Rebates earned with the Citi version of the Upromise card won’t be affected either.
Specifics on the new Bank of America Upromise credit card aren’t known at this time. Nor is it known what the card will look like.
Fidelity
Like the Savingforcollege credit card, the BabyCenter MasterCard allows earned rewards to be directed to the savings account of your choice: - "a 529 college savings plan, a mutual fund, or a money market account". Although the main pitch is to direct rewards towards college savings, it's made clear that earnings can be used for "anything else you'd like to save for." Rewards are earned at the standard 1% with no annual cap. Baby Center also has an associated Baby Center Savings Program that is a clone of the BabyMint program.
Savingforcollege
The Futuretrust 529 Credit Card is another basic 1% 529 rewards card. The card does share one important negative feature with The Education Plan card: you must have the credit card to benefit from the supplemental merchant rebates offered through Futuretrust network merchants - other credit cards cannot be used.
Other drawbacks of this card are the relatively short 20 day grace period and APR rates that are on the high side compared to the other 529 reward cards. Futuretrust APRs start at 12.74% and range as high as 16.74% depending on credit history.
Futuretrust
Some time ago we sadly reported the excellent Fidelity 529 rewards credit card had slashed the rewards benefit from 2% to 1.5%.
But good news!
As part of their unveiling of the new Fidelity Retirement Rewards credit card, Fidelity has announced that rewards for the popular 529 card will be bumped back to 2% early next year:
The Fidelity Retirement Rewards Card joins the award-winning(7) suite of credit cards offered by Fidelity that help investors save for key investment goals such as a new home or a child’s college education. With enhancements scheduled for early 2009, the new Fidelity(R) Investment Rewards(R) American Express(R) Card and the Fidelity Investments 529 College Rewards(R) American Express(R) Card will be offering a new 2 percent earn rate on retail purchases.
The Fidelity Investment Rewards Card and the 529 College Rewards Card, introduced in August 2005 and January 2003 respectively, offer Cardmembers the ability to redeem points for cash back to their eligible Fidelity account or 529 account. To date, investors using these two cards have received a combined total cash reward of more than $175 million(8).
Free College Money: Credit Cards That Help You Save for College
Welcome to 529Rewards.com.
This site is about helping parents fund their children's 529 plan using free cash from college savings reward programs. Finance experts agree that, used wisely, college savings tools such as 529 plan reward credit cards and 529 plan reward savings clubs are a great way for families to supplement college savings. The key to using these programs effectively is to resist the pitch: companies offer these programs because, in the aggregate, they know they will lead to higher spending on their products or services. Wise consumers learn to maximize their earned rewards without altering their spending habits. More about 529 rewards...