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Most Citibank credit cards can now be turned into a savings vehicle for college. This week Citibank joined several other top U.S. companies in a new college savings program created by Upromise Inc. Under the program, Citibank will contribute 1% of purchases made on certain enrolled Citi credit cards. Citibank is offering the program on its Citibank Gold, Platinum Select; Driver’s Edge; Dividend; Premier; Citimiles; Sony Card; Citibank VISA Signature; Jack Nicklaus Cards; and Click Citi Platinum Select. Cardholders may earn up to $300 per year for their Upromise savings accounts. The Citibank Upromise program requires a $24.95 annual fee for each enrolled Citibank card. Other companies, including AT&T, Coca-Cola, CVS/pharmacy, ExxonMobil, General Motors, McDonald’s, Toys”R”Us, AOL, Borders, Century 21, Coldwell Banker, ERA, Countrywide Home Loans, Staples, and Starwood Hotels will also contribute a percentage of a customer’s spending to an Upromise college savings account. Anyone who enrolls in Upromise, via its Web site, will have a portion of his or her spending with contributing companies deposited in their Upromise college savings account. Families can multiply Upromise college contributions by building their own savings network of parents, grandparents, aunts, uncles and friends, all directing their contributions to a child’s account. The Upromise service also offers the option of investing the contributions in a “529” college savings plan managed by Salomon Smith Barney or Fidelity Investments. Is the credit card feature of the Upromise program worth it? Assuming a cardholder charges $12,000 per year, under the Citibank Upromise program a typical household would earn $95.05. Under the Discover Platinum Bonus Cashback program the same household would earn $105 cash, while the American Express Platinum Cash Rebate program would produce $125 cash. The General Motors MasterCard program would deliver the same household a $500 rebate towards the purchase of a GM car or truck. Furthermore if the cardholder carries over a balance, continuously, on the AmEx Cash Rebate program they would earn a $60 bonus. However Citibank’s credit card interest rates are the lowest among the issuers noted. Citibank’s most common interest rate is now 13.99% compared to the 14.99% APR for the Discover Platinum Bonus Cashback program, 17.99% for the AmEx Platinum Cash Rebate and 17.99% for the GM MasterCard. Assuming a cardholder charged $12,000 per year and carried an $8000 balance the annual net cost for the Citibank Upromise program is $1,025 compared to $1,095 for the Discover Platinum Bonus Cashback, $1,255 for AmEx Platinum Cash Rebate, and $940 for the GM MasterCard. So it really depends on how you use the card. In some cases you may be better off getting a 10% no frills card and depositing the funds directly into a savings vehicle. For more information on the Upromise program dial <>.

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