'Mellody's Mail': Credit Card Rewards

ByABC News
November 1, 2004, 12:42 PM

— -- QUESTION: I heard you recommend two credit cards that offer rewards. One was Nest Egg. The other was to save for college. Would you please advise where I can access the sites for these?

ANSWER: Since my segment aired, I have received many similar e-mails from viewers asking me to recap my favorite investment and education credit card reward programs. As a reminder, it is essential to read the fine print before signing up for any card as a "free" reward can quickly become quite costly if there is an annual fee or a high APR attached. That said, my favorite credit cards which reward your retirement and education savings are as follows:

1. NestEggz (www.nesteggz.com): With NestEggz, you can earn a 1 percent rebate on every purchase and when you shop within the NestEggz merchant network, your rebates are even higher ranging from 2 percent to 20 percent for each purchase. The money you earn can then be directly deposited into your retirement account (Traditional, Roth or Rollover IRA) -- balances of $25 or more are deposited monthly.

While there is no annual fee and no annual maximum on the amount you can earn, your retirement account must be enrolled in the NestEggz program to be eligible for the rebates. If you use a rewards program like NestEggz, it is critically important to keep track of the money being credited to your account as well as the money you deposit directly to ensure you do not exceed the maximum contribution limits for IRA ($3,000 in 2004).

2. BabyMint (www.babymint.com): By becoming a BabyMint member, you can earn rebates that go toward college savings by shopping at the BabyMint network of retailers (including Eddie Bauer, Sam Goody and Hickory Farms); purchasing particular products; or using the BabyMint College Savings Credit Card. Rebates range from 1 percent to 30 percent, depending on the retailer or product, and can be sent via check, directed to another BabyMint member's account or deposited into your college savings account (i.e., 529 plan or Coverdell Education Savings Account).