Getting My 2% Cash Back On Everything

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I just got my check from Fidelity for cashing out my 529 plan, courtesy of my MBNA 529 College Rewards Mastercard which gives me 2% cashback on everything I buy into that 529 account. My first disbursement request was lost in the mail, but my check finally came:

Out of the $1,600 I received, I would estimate that $900 was from my own deposits, $600 was from earning 2% cashback, and $100 from the tax-free growth of my conservately-chosen 529 portfolio. Nice!

I had to put in that $900 of my own money in due to the $50 required monthly auto-deposit to avoid an annual maintenance fee. It wasn’t a big deal as it’s taken out automaticaly from my checking account and it grows tax-free (since I am in school) anyways. I actually had more than $1,700 in my account, but according to the withdrawal form if I asked for the whole amount, my account would be automatically closed. Can’t let that happen!

All in all, I’ve been really happy with this card and all the cards in my wallet. All of them have reliable rewards system that I don’t have to worry about. Since I shared all my favorite credit cards more than 8 months ago, I haven’t found another other combination that’s better for me. 5% on groceries, drugs, and gas – 2% on everything else. I now have my Citi Professional card for 3% back on restaurants, but we don’t eat out that much.

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  1. Won’t you get charged a maintenance fee now that you only have ~100 left in the fidelity account?

  2. Nope, as long as you keep up the $50 monthly auto-deposit there is no fee and no minimum balance.

  3. You mentioned you’re a student…is there a reason you chose the Citi Professional card over the MtvU Visa from Citi?

  4. You’re right! I forgot about that card!

  5. Jonathan, if I understand it correctly, the 50$ monthly deposit can be withdrawn without any penalty at anytime. Is that right? Thanks a lot!

  6. Yep. All the principal, including the 2% cash back which is simply another deposit, is able to be withdrawn without penalty. Only earning are taxable and are penalized if you do not have actual school expenses.

  7. Is there any limit to the number of withdrawls you can make in a given time period? ie, can you just withdrawl the $50 every month as soon as it transfers?

  8. No limits to withdrawals that I’m aware of. Just a 39 cent stamp + envelope each time =)

  9. Cash back credit cards are definitely a great tool to earn some extra cash. Just be aware… they usually carry higher interest ratea than standard credit cards.

    Before you apply, you should compare the amount you think you’ll earn to the amount of additional interest you’ll pay. In some cases, you may not earn enough to offset the higher interest rates (depending on your spending habits).

  10. Justin Andringa says

    You have to understand, Jonathan is probably one who pays his credit card bill in full, and on time, every single month. He doesn’t have to worry about interest charges, so the more cashback he earns, the better in his case! 🙂

  11. Justin Andringa says

    It’s essentially free money you’re earning Jonathan.

  12. I got this 529 card, to replace my Amex cash card. However, this card does NOT allow you download into Quicken like Amex does. That’s a massive inconvenience: now I’ve got to reenter every damned transaction into Quicken. And I’m a self-employed consultant, and need to keep track of all expenses for billing, etc. I need a download feature. The extra 0.5% cash back only amounts to about $375 a year (I charge about $75,000 per year), and it’ll take that much in time value to maintain this account. No thanks. I’ll stick with Amex. This card is not convenient.

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