Review: Fidelity 529 Credit Card

fidelity-529-visaThe Fidelity Investments Visa Signature Card is the Fidelity credit card that now acts as the 529 rewards card of old. While the 529 name is no longer attached to the card, this card actually expands the ways you can use your rewards, including depositing into a Fidelity 529 plan. For purposes of this article, we are going to focus only on the 529 rewards aspect.

This Visa Signature Card offers you the opportunity to earn rewards that go toward your children’s (or grandchildren’s or nieces’ and nephews’, etc.) 529 education plan. And it’s a generous reward — 2% of all your purchases with the card can go into your Fidelity 529 plan account.

This is a very good credit card if you want to beef up a child’s college savings. Obviously, there are a few things to consider, such as what a 529 plan actually is, how the account is handled, etc. So, let’s talk it out step by step. (Even if you already know some of this.)

A 529 education plan allows you to put money away for a child’s college tuition and expenses tax free. 529 contributions can generally be written off on your state taxes, the money in the account is allowed to grow tax free, and the money is not taxed if it is is used as intended — for college expenses. 529 plans are good stuff. (We are not accountants, so check to be sure before you start writing things off of your taxes, OK?)

The Fidelity Visa can add to your 529 contributions through its 2% back reward. You must open a Fidelity 529 account in order to get the rewards, BUT you do not have to make this Fidelity 529 account your only 529 account (although we’re not saying you shouldn’t either). You can have multiple 529 accounts if you choose, with other plans outside of Fidelity, and of course you can make contributions to any 529 plan beyond the 2% that Fidelity is giving you when you use the credit card.

Bottom line: the 2% rebate that the Fidelity Visa offers is very generous for any credit card, so if you are already saving in a 529 plan or were thinking about it (or should be thinking about it), this is a good way to increase the college savings of a child. Go here to apply online.