529 Plan Credit Cards help you to follow the 529 plan, which is a savings plan that is used for saving towards future college costs. The plan offers a variety of tax-advantages over other forms of savings. Families who want their children to go for college use credit cards with rewards that are tied into 529 plans. The credit card owner uses the 529 rewards card to make all of their purchases, and as a result, the rebates drop into the 529-college savings account.
Considerations for 529 Rewards Credit Cards
There are some conditions that you should consider before opting for this kind of credit card. You will not be able to get any benefit from a 529 rewards credit card if you are unable to pay off your entire monthly balance each month. And in this case, if you carry a balance from one month to the next, then the interest you pay on the card will almost always be higher than the amount of rebates you earn.
Some of the 529 rewards credit cards require that you link your credit card account with a specific 529 plan. Others allow cardholders to designate any investment account to have rebates deposited. In case you don’t have children now, or you are not sure if your child would want to attend college, you might decide to have rebates deposited into another form of investment account.
Most Popular 529 Rewards Credit Cards With No Annual Fees
Fidelity 529 College Rewards Card
This credit card is issued through MBNA and provides a 2% rebate on all purchases. It is possible to earn a maximum amount of $1,500 each year with this card. Your card rebates will automatically be deposited into a 529 plan that is managed by Fidelity. People living in New Hampshire, Delaware, Arizona and Massachusetts are currently eligible for the Fidelity 529 College Rewards Card.
Citi Upromise Credit Card
This credit card is issued through Citi Bank, and provides a 1% rebate on all general purchases. You can earn upto $300 each year with this card. This card has other advantages too such as, if you use the Citi Upromise card at specific locations, including Mobil and Exxon, you’ll get 2% of your purchases in rebates, with no annual maximum; and a full 10% on grocery and drug store purchases without annual maximum rebates. Any 529 plan that is managed by Upromise Investments Inc can be linked to your Citi Upromise credit card.
GHESP/Futuretrust MasterCard
This card is issued through Juniper Bank and managed by TIAA-CREF. A rebate of 1% on all general purchases with no annual maximum rebates is offered through this card. Most people link their cards to a Georgia 529 plan, but you can also use Futuretrust’s self branded credit card and link it to almost any investment or bank account to receive your rebates.
BabyMint College Savings Card
Issued from MBNA, a 1% rebate and no maximum limits are provided by this credit card. You can have the rebates automatically deposited by linking your credit card with any 529 plan or investment account.
In today’s economy, it has become necessary for almost everyone to get a credit card. If you are in a good financial position, have some discipline and can pay your balance off in full each month, then it is a great idea to use one of these 529 or investment plan rebate credit cards to help you. You are going to spend money anyway; you may as well use a credit card that’s going to help you deposit money into an investment or 529 plan.
The good news is that rebates from credit cards that are placed in your 529 plans are not going to cause you any trouble, meaning you can count them as a gift when it comes to taxes. You can deposit up to an amount of $12,000 annually into a 529 plan, so having the rebates from credit cards deposited doesn’t pose a problem for most families.
