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529 E-ditorials

00-14: Buy stuff, receive a 529 account
Joe Hurley
Tuesday, July 11th 2000

I used to love my GM credit card. It promised a rebate equal to 5% of all my purchases, to be applied to my next purchase of a GM vehicle. My wife and I charged everything we could to the card, including the first cruise my family ever took (and that was discounted as well). When I finally did decide to buy a new business vehicle (a pick-up truck, because as every good tax accountant knows there are great tax advantages in buying a truck rather than a car) I decided to get a GM truck. My rebate was worth over $4,200. No gimmicks, no hassles. Just $4,200 off my negotiated price.

Alas, many good things come to an end, and the GM 5% rebate card is no longer available. In fact, it’s hard to find a credit card rewards program these days offering benefits that even come close to the deals we used to see.

Now we learn of a new effort that promises to help us save for college costs. In fact, it’s from a company called UPromise and its intentions were revealed this morning in an article in the Wall Street Journal. UPromise is gathering together consumer companies and getting them to agree to rebate a portion of your consumer purchases into – what else – your 529 plan account! As you buy cars, insurance, clothes, etc. from the participating vendors your account will continue to grow from the rebates, and from the investment earnings on those rebates. UPromise says that the average family will be able to accumulate $50,000 from this program over a period of 15 years.

The ability to turn a small slice of your everyday purchases into a tax-advantaged college savings program is an innovative idea. It’s also a daunting task for this start-up company in Boston, the brainchild of marketing entrepreneur Michael Bronner. There are 48 states currently offering or planning to offer 529 plans, and so any attempt to integrate the UPromise concept with such a wide assortment of plans will take a lot of effort. It appears that UPromise has been able to gather substantial resources – both people and financial backing – for this effort. We’ll know even more about it in the coming months as I continue to receive updates from UPromise.
Stay tuned!

» 05-4: The 529 marshals have arrived - 08/30/05
» Our 5.29th-year anniversary - 06/29/05
» 05-2: 529s and the new Bankruptcy Act - 04/28/05
» 05-1: Reform or Deform? - 02/27/05
» 04-6: Perspectives on the 529 debate - 12/28/04
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