Fidelity/MBNA 529 Rewards Credit Card
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.
| Basic Rebate: 2% of Eligible Purchases | Maximum Yearly Rebate: $1,500 |
| Other Rebates: None | Grace Period: 25 Days |
| Annual Fee: None | APR (Purchases): 12.99% |
|
529 Plans: Limited to Plans Offered Through Fidelity |
Minimum Rebate Transfer: $50.00 |
| Transfer Frequency: Quarterly | Cash Withdrawals Permitted?: No |
| Can Others Direct Contributions?: Yes | Issuer: MBNA |
There are some drawbacks. One, the 12.99% APR is high compared to other 529 credit card offers. This won't be an issue, though, if you're a prudent user and pay the outstanding balance in full each month. (On the plus side, the grace period for paying balances in full without finance charges is a relatively generous 25 days.)
A second, shortcoming is the limited selection of 529 Plans for investing reward dollars. Understandably, you are required to use 529 plans offered through Fidelity Investments - the card sponsor. All three 529 options are regarded well, but more choices would be nice. You should be aware that account management fees may be assessed to your Fidelity 529 account. These fees are waived if you set up automatic contributions to the account (in addition to the rewards).
Finally, power users of Microsoft Money or Quicken will be disappointed to know that MBNA does not presently support daily download of transaction data.
Summary: Despite these shortcomings, the generous rebate terms of the Fidelity/MBNA 529 College Rewards card make it the best credit card choice for families seeking to maximize college savings.
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The 2% is just a hook to get customers to open a Fidelity account. The account charges far outweigh the 2% you’ll earn from the card. Beware.
I agree it would be nice to have more options than just the Fidelity lineup of 529 plans. But I don’t think it’s fair to say the Fidelity account charges outweigh the rewards. I have well over $3,000 in my Fidelity 529 acount comprised entirely of reward earnins and investment income thereon since early 2004. I carefully watch our spending, use the card to pay things whenever possible and pay the balance in full each month.
[…] a $20,000 home improvement, taking this extra step with a 2% rewards card will pocket you an easy $400.00. Of course, it’s critical you pay off your credit card […]
“Despite these shortcomings, the generous rebate terms of the Fidelity/MBNA 529 College Rewards card make it the best credit card choice for families seeking to maximize college savings.”
A far better way to maximize college savings, for homeowners at least, is to use a Home Equity Line of Credit (HELOC) as an interest cancellation account to accelerate their home equity:
More and more folks are using a HELOC or a business-line-of-credit (BLOC) or personal-line-of-credit (PLOC) as an interest cancellation account to accelerate their home equity and payoff their home *years* sooner than listed on their mortgage amortization schedule.
Unfortunately, today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using an Advanced Line of Credit (ALOC) to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…