Among so-called “rewards” credit cards are several that are tied to 529 college savings plans. If you use one of these 529 rewards cards instead of cash, the rebates will go automatically into a 529 account. Inside the account, you’ll get tax-free earnings that eventually can be used to pay for higher education. Such cards include:
* Fidelity 529 College Rewards Card from MBNA, which gives you a 2 percent rebate on your purchases, up to a maximum annual rebate of $1,500. The rebates from this card can be deposited into any Fidelity-managed 529 plan, such as those offered in Arizona, Delaware, Massachusetts and New Hampshire.
* Citi Upromise Card offers a 1 percent rebate, with an annual maximum of $300. At some locations, the rebate is 2 percent (Exxon or Mobil stations) or 10 percent (grocery and drug stores) with no annual caps. The rebates can go to any of several 529 plans managed by Upromise Investments, including one in New York.
* BabyMint College Savings Credit Card from MBNA, which has a 1 percent rebate and no annual cap. You can set up your rebate account to have the dollars swept into the 529 plan of your choice.
