Here’s a six-step plan that will help you get money for college by maximizing 529 rewards:

1. Select the 529 Rewards Card Paying the Highest Rebate on All Purchases
For most families the clear choice at this time is the Fidelity/MBNA card which, with a 2% rebate level, will likely be the main rewards generator in your program. Second choice is the BabyMint credit card which carries just a 1% rebate, but has no limit on reward earnings and provides more flexibility for investing rewards. BabyMint may also be the better choice for very high-spending users (e.g. over $150,000 per year) since there is no rewards cap.


2. Use the 529 Rewards Card as Your Principal Method of Payment
Your aim should be to keep spending at current levels (i.e. within your income) but to replace checks, cash, and other credit/debit cards with the 529 rewards card as your principal method of payment.


3. Maximize Use of the Credit Card But Always With a Goal of Paying the Balance in Full Each Month
Credit card acceptance is more universal each day. This means new opportunities to earn 529 rewards – e.g. car and homeowners insurance payments, municipal water and tax bills, groceries, tuition, etc.
For each $1,000 of monthly costs that you can shift to the 529 rewards card, you’ll earn $20 of free cash for future college expenses.

Use the credit card as an intermediary payment vehicle for large purchases. For example, if you borrow to make home improvements, pay contractors first with the 529 rewards card and then pay the credit card with your home equity loan. This will earn you additional points.

4. Use the Free Upromise and BabyMint 529 Savings Clubs
Chances are that you frequent some of the grocery and drugstores included in the Upromise network and that you already buy products offering Upromise rewards. Since participation costs you nothing, there is no reason not to participate and earn additional 529 rewards.

Sign-up for “loyalty cards” offered by grocery stores and drug stores you use. Register these cards on Upromise and then use them every time you shop!

The amount you earn will depend on your family’s product preferences. As an example, Coke products earn Upromise rewards while Pepsi products do not. Resist becoming too loyal to brands just because of the Upromise rewards. If either Coke or Pepsi can satisfy your tastes, and Pepsi is on sale, it may be the better buy despite the lure of Coke’s Upromise rewards.

The BabyMint merchant network is not as extensive as Upromise. Still, the program is free and there may be significant opportunities (especially for on-line shopping) to enhance your 529 savings.

5. Recruit Other Family Members and Friends
Following a strategy like the one outlined here, you can earn significant 529 rewards on your own. But building a network of family and friends willing to direct 529 rewards to your child’s account can greatly accelerate your college savings program.

According to Finaid.org, 60% of grandparents say that they would contribute to a section 529 plan if asked, especially since they know the money will be spent on the child’s education.

Ideally, grandparents and others will also use a 529 rewards credit card and direct reward earnings to your 529 account. However, with the large number of other credit card reward programs available, you may not feel comfortable asking them to give up frequent flier miles to put additional cash in your child’s account.

On the other hand, registering family and friends grocery/drugstore loyalty cards through Upromise will cost them nothing. Typically, the card user will get in-store discounts for buying select items. Behind the scenes, Upromise rebates accrue, but there are no alternative uses for these rewards. Often, the use of loyalty cards also generates rewards for churches or charitable organizations designated by the cardholder. This should be pointed out as encouragement to use the cards.

6. Assess Whether the Edexpress Program is Right for Your Family
Unlike Upromise and BabyMint, the Edexpress savings club charges an annual fee of $24.95 to access their merchant network and earn 529 rewards. Edexpress claims its members receive larger rewards since 100% of the merchant reward is passed on to the member with the annual fee going to cover Edexpress’ operating costs. Edexpress does not currently offer a free-trial to let prospective members try for themselves. Still, the Edexpress network of (mostly on-line) merchants is impressive. It is worth researching their website to determine whether your family would use the network merchants enough to offset the annual fee.

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