Upromise College Savings Rewards Program

Mark KantrowitzBy Mark KantrowitzBy Savingforcollege.com

The Upromise rewards credit card and college savings program automatically sweeps rewards and rebates into the family’s linked 529 college savings plans. It combines features of several savings programs, including a cash back rewards credit card, rebates from an online shopping portal and a round up savings program.

Upromise is a college savings loyalty program that was founded in 2000 and acquired by Sallie Mae in 2006. Since inception, the 17 million participants have earned total rewards of $1 billion.

How Does Upromise Work?

Upromise is like a cash back rewards credit card, but with a few unique college savings benefits.

Upromise is free to join and does not charge an annual fee. There is a 23-day grace period for avoiding interest on credit card purchases. The credit card provides free access to your FICO credit score. Monthly payments on the credit card can be automated.

Cash back. Cardholders earn 1.25% cash back on purchases made with the Upromise credit card. There are no rotating reward categories.

Bonus for linking a 529 plan. If you link your Upromise account to a participating 529 plan, you will earn a 15% bonus on your rewards. The 1.25% cash back with a 15% bonus is the equivalent of a 1.44% cash back rewards card.

Round up program. The Upromise credit card includes the option of a spare change investing program, where purchases are rounded up to the nearest whole dollar. Round ups are capped at $500 per month. Unlike apps like ChangEd, there is no fee for the round up program.

The Round Up amounts are automatically transferred to the linked 529 plan, so it is a painless way of increasing college savings. The Round Up amounts are eligible for the 1.25% cash back and 15% bonus. If you round up $25 per month, this can yield $4.31 in extra rewards a year.

Shopping portal. Upromise lets you earn rewards from online shopping made through the Upromise shopping portal, shop.upromise.com. After you login and click on a vendor’s offer on shop.upromise.com, purchases will earn rebates to your Upromise account. The prices on purchases made through the portal are the same as purchases made directly through the store’s web site. Rebates are typically 1% to 5%, but can be as high as 40% for specific vendors, especially during the holiday shopping season.

Dining rewards. You can also earn rewards by eating out. Purchases made at participating restaurants using a linked debit or credit card will earn 2.5% cash back. If you use the Upromise credit card, the Upromise dining rewards double to 5% cash back.

A key benefit of the Upromise program is the automatic transfer of rewards to a linked 529 plan. Other cash back credit cards may offer a higher percentage on purchases (e.g., the Citi Double Cash Card offers a total of 2% cash back without the extra features of the Upromise credit card), but you have to manually transfer the cash back to a 529 plan. The Upromise program makes it easier to save for college.

The Upromise MasterCard is issued by Barclays Bank. Transaction data can be automatically uploaded into Quicken, making it easier to track your spending.

How Much Can You Earn with Upromise?

The average Upromise earnings is $59 per participant.

Your personal experience will vary, depending on whether you are an active or passive participant.

I’ve been a member since 2002 and have averaged earnings of more than $200 a year.

Participants can earn hundreds or even thousands of dollars a year by routing their purchases through the Upromise shopping portal, shop.upromise.com.

How to Get the Most Out of Upromise

The Upromise credit card is best for people who do not carry a balance on their credit cards. You should always pay off your credit card balance in full each month to avoid paying interest on your credit card charges. If you carry a balance on your credit card, the interest on the credit card will likely exceed the amount of rewards you earn.

There are several steps participants can take to maximize their earnings with Upromise:

  • Link an eligible 529 college savings plan account to your Upromise account. This will qualify you for the 15% bonus, supersizing your rewards.
  • Have friends and family join Upromise and transfer their rewards to your children’s 529 plan accounts.

Review of Upromise Complaints and Compliments

Complaints about Upromise in various online forums seem to mostly concern the old Upromise program. Some participants complained about not receiving credit for all eligible purchases made with linked credit cards. Upromise retired this program except for dining at restaurants, replacing it with their online shopping portal. Some complaints are from long-time participants who prefer the old Upromise.

Other complaints concern the amount of rewards earned not matching expectations. To earn hundreds or thousands of dollars in rebates, you must actively use the Upromise shopping portal and the Upromise credit card. You must also link a 529 plan to your Upromise account. A passive approach to Upromise will yield much lower rebates.

Other complaints concern the transfer of rewards to a 529 plan account. It takes up to 60 days for the rebates to show up in the participant’s Upromise account, and then there is a threshold before rewards are automatically transferred to the linked 529 plan account.

If used properly, the Upromise program is worthwhile. Upromise is an easy, no-cost method of supplementing your college savings.

There are online testimonials from Upromise members who report much higher rebates and savings. These compliments tend to be from participants who have optimized their spending to maximize their rewards.