No one has ever said that college is affordable. According to the National Center for Education Statistics, in 2021 the average tuition and fees for a year at a public fouryear institution was $9.400. The average cost of tuition and fees for a private four year institution was a staggering $37,600.
Many of these numbers drive us to look for extra money in our couches to pay the bills. Credit card rewards are one source that can help you get there.
Issuers offer a variety of credit cards to help students pay for college, in an apparent nod to the rising cost of higher education. Some cards allow you to funnel cash into a 529 plan, while others allow you to use rewards for student loans.
There are a few credit cards that can help with college expenses. However, we have one caveat. Credit card rewards won’t suffice. While rewards can be used to supplement a student loan payment or to boost a college savings account, they are not sustainable funding options for several years.
You don’t have to follow the rules of these cards, which make college savings easier, but you can manually deposit the rewards from any cash back card in a college savings account.
Credit Cards that help you save for college
Upromise Mastercard is the best for you.
Barclays Upromise Mastercard encourages college saving by offering a symbolic 1.529% rewards rate if you link your Upromise bank to a college savings plan. If you don’t link your Upromise account to an eligible college savings plan, the cash-back rate drops down to 1.25%. The list of eligible college savings plans is extensive, which is a good thing.
When you have earned at least $50 in rewards they can be used to cash back into your 529 plan within the first week.
You can earn an additional $250 cashback each year by purchasing gift cards from MyGiftCardsPlus.com when you use the Upromise Mastercard. A $10 bonus will be given for purchases of $50 to $149.99, and $20 for purchases over $150. The cash-back bonus is limited to one per month. However, the bonus will increase to $25 in November or December for purchases of $150 or more.
The best for flat cash-back rates: CollegeCounts 529 Rewards Visa card
The CollegeCounts 529 Rewards Card offers a 1.529% discount on all purchases, just like the Upromise Mastercard. Once you have earned at least $50, cash back will be automatically deposited to your CollegeCounts 529 Account. Although CollegeCounts 529 in Alabama is the state-sponsored plan for credit card applicants, they don’t have to be Alabama residents in order to apply for the card or enroll in a CollegeCounts529 plan.
For those who have a Fidelity plan: Rewards Visa Signature(r), Card
Purchases made with the $0 annual fee Fidelity(r] Rewards Visa Signature(r] Card earn an exceptional unlimited 2% return — but only if rewards are redeemed into eligible Fidelity accounts including a Fidelity managed 529 college savings plan account. Other redemptions will not give you the same value. You can redeem rewards at any time but must have at least 2500 points to make a deposit into your 529 account.
For those who have a Merrill 529 plan, Bank of America(r), credit cards
Cardholders can redeem rewards for credit to a qualifying 529 account with Bank of America (r). However, it must be with Merrill.
Bank of America credit cards come with a minimum $25 limit for redemptions to 529 accounts.
You can accelerate the process of earning rewards by adding your spouse/partner as an authorized user on your credit card account. You’ll both get cash back for what you spend. You should make sure that you trust the person spending responsibly. Authorized users are not legally responsible to pay credit card balances.
Student loans can be repaid with credit cards
For SoFi Loan holders: SoFi credit card
You can redeem points earned through the SoFi Credit Card for cash, which can then be applied to the balance of a SoFi student loans refinance. This redemption option is also one of the best. One SoFi Rewards Point is worth 0.5 cents when it’s used to redeem a statement credit or cash. Reward points can be redeemed for cash or any other amount at any time.
The SoFi Credit Card earns an unlimited rate of 2% and the possibility to earn 3% within the first year. The higher rate can be obtained by cardholders setting up direct deposits every month with a SoFi savings or checking account. There is no monthly fee. The maximum cash back for the 3% promotion is $360
The best for student loans with any servicer. Sallie Mae Accelerate
The Sallie Mae Accelerate card rewards can be used to repay any student loan.
Sallie Mae Accelerate’s base rewards rate is 1.5%. However, you will get an increase for redeeming rewards to repay student loans. Sallie Mae will increase your payment towards student loan balances by 33 1/3% if you choose this redemption option. Let’s say you redeem $50 in rewards for your student loan balance. Sallie Mae will add $16.67 to bring the total payment up to $67.67.
There is no minimum redemption amount, but $25 is the minimum. You can also earn as much as you like.
The best for a large sign-up bonus is the Laurel Road Student Cashback Credit Card
The rewards structure for the Laurel Road Student Loan Credit Card is similar to many others: you will get 2% when your rewards are used to pay a student loans and 1% for all other rewards. You can get both public and private loans; see the list of student loan servicers who partner with the Laurel Road cashback card.
It stands out among the rest because of its generous sign up bonus. Cardholders who spend $3,000 within the first 90-days of account opening can earn $300 towards a student loan. Reward points can be redeemed for statement credits.
Another perk of the Laurel Road student loan cashback credit card is flexible rewards redemption Cashback can be redeemed anytime for as little as one cent.