How Financial Reward Credit Cards Can Help Towards Your Savings

Financial reward credit cards or savings reward credit cards give you assistance on down-to-earth financial needs such as paying your mortgage, helping to grow a savings account or pay for a child’s college education.

Some cards will allow you to pay down a mortgage. Accumulate a certain number of points, and you receive a credit to your outstanding mortgage principal, whoever the lender is. Often there is no limit on how big a rebate you can earn each year.

Some savings reward credit cards give you a rebate on your purchases that you can put into an FDIC-insured high-yield savings account. The APY on such savings accounts can be as high as 5 percent.

Many people today are concerned about the rising costs of college education. Savings reward credit cards are available that allow you to earn money that is deposited in your college savings account. Most of these cards, which are typically offered by investment companies in conjunction with banks, offer 1 percent back on eligible purchases, although currently one card offers 2 percent back.

If you’re good at networking, you can persuade relatives such as grandparents to use the card, too, thus creating impressive contributions to your child’s college education fund.

There are also various loyalty reward programs that help build college savings by paying back a percentage of what you spend using their credit card. The largest of these programs are Upromise and BabyMint. One requirement is that you have to buy from designated retailers, although the retailer network is large so it is not usually necessary to change your shopping habits.