Credit card rebates help build college fund

Credit card rebate programs allow parents, friends and relatives to save money for a child's college education by shopping at designated retailers.

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With programs such as Upromise and BabyMint, the more purchases you make, the more money gets tucked away for college. Both are free and allow you to transfer the dollars you save with rebates into 529 college savings plans, but there may be some fees associated with 529 plans..

The aim is to help families get a jump on college costs by stashing small cash rebates for several years.

"Upromise has helped over six million families save toward their child's college education," says Matthew Parillo, director of marketing and communications at Upromise.

Buyer benefits
Upromise members can earn rebates ranging from 1 percent to as much as 25 percent per purchase from several thousand restaurants, retail stores and online merchants.

Members can register their credit cards and debit cards, as well as grocery and drug store loyalty cards, to begin earning rebates that are directed into a 529 plan.

Sample rebates include a 1-percent rebate when you shop online at Bed Bath & Beyond, a 3-percent rebate from Barnes & Noble.com and 4-percent rebates for online purchases at Target.com and Walmart.com.

For each gallon of gas you pump at Exxon or Mobil, earn 1 cent for every gallon of gas you pump when you buy 20 gallons or more in a calendar month. And if you pay with the Citi Upromise card, you'll save an additional 2 percent toward your college savings.

Buy or sell a home through a participating Century 21, Coldwell Banker or ERA office, and up to $3,000 gets dumped into your Upromise account. Members also can book their travel arrangements, including flights, car rentals, vacation packages, cruises and hotel accommodations, through Expedia and earn a 1-percent rebate, or save 4 percent when they rent a car from Budget.

A grocery-shopping program is now available nationwide. Members can shop at more than 20,000 grocery and drug store locations, earning 1-percent to 5-percent rebates on more than 5,000 different everyday products, such as Huggies diapers, Tylenol, and Ivory soap. By registering your grocery store or drug store loyalty cards, you can pay by credit, debit and even cash.

Every quarter, the money in a Upromise account can be transferred to either the Upromise-administered 529 plan from Vanguard or a state-sponsored 529 plan for residents in Arkansas, New York, Iowa and Colorado.

With BabyMint, members earn rebates ranging from 1 percent up to 30 percent by shopping at more than 500 online sites, or more than 30,000 locations including restaurants and brick-and-mortar stores, as well as catalog and online retailers. This year, they have added Ruby Tuesday, Mrs. Field's Cookies, Hollywood Video and Restoration Hardware to their rebate partnerships.

While members can link any credit card or debit card to their BabyMint account, the BabyMint credit card must be used within the brick-and-mortar stores to receive the retailer's rebate. No matter where you shop with the BabyMint card, you'll earn a 1 percent rebate on your purchase. Plus the BabyMint credit card generates unlimited rebates.

A new BabyMint program is the Tuition Rewards program. Every dollar members earn in shopping rebates is matched by a dollar off of tuition at more than 150 colleges and universities across the U.S. There is no cost to participate in this program, but you must opt in. For example, let's say you spend $100 at an affiliate retailer, such as Eddie Bauer, using your BabyMint credit card. You'll earn $5 for shopping at Eddie Bauer, $1 for using your BabyMint credit card, plus receive a matching tuition credit of $6. That's a total of $12 earned in one transaction.

BabyMint members can also direct their rebates to pay down outstanding student loans.

A BabyMint account can be directly linked to any 529 plan or any savings vehicle, such as a Coverdell educational savings account, chosen by a member. Rebates of $25 or more are transferred into a 529 plan or other account on a monthly basis.