Credit cards that help you build a nest egg
No matter your age, it’s never too early to start padding your nest egg for retirement or college tuition.
And while savings accounts and 401(k) plans are popular ways to do just that, credit cards that offer rewards are also a viable option -- especially since investments can be risky and employers aren’t matching 401(k) funds like they once did.
These credit cards are for people who never carry a balance because interest charges quickly wipe out whatever you've earned in rebates.
Here’s a look at three credit cards that can help you build your savings:
Fidelity Rewards American Express Card
For this card to be an option, you must have an eligible Fidelity account. If you do, you’ll earn 2% of your everyday purchases, which will be transferred to that eligible account.
Not sure if you’re eligible? Some accounts that aren’t eligible include employer-sponsored accounts. The program guidelines outline all the eligibility rules, so read those carefully before signing up to understand account eligibility. (personal.fidelity.com)
Details: This card has a variable 13.99% APR (prime rate of 3.25% plus 10.74%) and no annual fee.
Fidelity Investments 529 College Rewards American Express Card
Wondering how you’re going to foot the bill for your kid’s college? This card can help.
It’s similar to Fidelity Investment Rewards American Express Card, so you get 2% on your purchases. But with this card, the rewards can be transferred to your Fidelity-managed 529 account in order to contribute to college.
Which means well-wishing family members can also sign up and contribute to college funds.
One bonus is 529 college saving plan earnings aren’t subject to federal tax and, in some cases, state tax as long as you don’t withdraw the funds early for anything other than college.
There is a catch: There are restrictions on who can qualify and how much you can contribute each year.
Details: This card offers a variable 13.99% APR and no annual fee.
Upromise World MasterCard
The first step to carrying this card is joining Upromise (www.upromise.com), which is free.
Then this card issued by Bank of America (www.bankofamerica.com) lets you transfer credit card rewards to your Upromise account. There’s also an option to invest in a high-yield savings account or a tax-deferred 529 plan.
And, if your first purchase is made within 90 days of getting the card, you’ll receive a $25 college savings bonus. Rewards include 1% on every purchase, 2% on eligible online purchases through Upromise and 10% extra at participating Upromise restaurants, grocery and drug stores.
Details: This card boasts a 0% introductory APR for the first 12 billing cycles. After that, there’s a variable APR of between 12.99% and 20.99% and no annual fee.
Compare these cards with the rewards credit card offers in our extensive database.
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