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credit card rewards for college savings?

July 24th, 2009 at 03:21 pm

A while back I did something I never do: I applied for new credit cards for me and the hubby. After some serious hard thinking, I decided we could do better with our rewards. We switched from an Amazon card to a Schwab rewards card.

We liked the Amazon card, but really, did we need Amazon gift certificates? we used them, but CDs, DVDs, and books are fun but not really getting us ahead. (It had 1 percent rewards)

The Schwab card pays 2 percent rewards, in cash, into a Schwab brokerage account each month. So, instead of a CD we'd actually be getting an investable asset as a reward. Much more our speed.

Caveat:This wouldn't have made sense for us if we didn't already have all of our investment accounts at Schwab. We do.

We already have one brokerage account but decided to open one specifically for this card. It is now the auxillary college savings account for our Beans. Any money we save for college that is above the $2,000 a year per kid we can deduct from our state taxes in our state 529 goes into this account.

After some serious math, we decided we could reach our goal by socking away $4600 a year per kid total in all accounts.

Anyway, I just want to say that after several months the rewards card is working out nicely. It took more than a month for the first deposit to show up, but since then it has shown up regularly.

We charge our day to day expenses and then pay them off every pay day. So far, the card has put about $100 into that account. I deem that a $100 bonus for money we would have spent anyway.

Hopefully I can figure out a way to grow that money for my Beans' college.

3 Responses to “credit card rewards for college savings?”

  1. Thrifty Ray Says:

    I use a reward card too...and do the same with the day to day are missing a great opportunity if you dont!!! (That is if you maintain the discipline to pay it off)

    Our rewards is Alaska mileage...which really comes in handy now that the hub is a frequent flyer!!!!!

  2. Ima saver Says:

    I use a chase reward card. So far, I have earned a $50 check every month!

  3. creditcardfree Says:

    Great idea putting the rewards for college.

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