Upromise Credit Card Review
As you probably know, Upromise is a savings program that helps parents save for their kids’ college. It’s a great concept, but they do have their critics. Check out this Upromise credit card review to find out the pros and cons:
For starters, here are the two different credit cards they offer:
(1) Upromise MasterCard w/ grocery and dining rewards
This card gives back 1% on all purchases (which are deposited into the 529 savings account) so essentially, it’s like a 1% cash back credit card.
On purchases from Upromise restaurants, the card gives a 10% extra. They do the same thing on participating grocery and drugstore items.
(2) Upromise MasterCard w/ grocery and gas rewards
This Upromise credit card also gives 1% on all purchases.
Like the card above, it also gives the 10% match on eligible grocery and drugstore items.
For gas purchased from Exxon or Mobil stations it does 2%. This is extremely disappointing for three reasons (1) you need to buy 20+ gallons per month (2) it only applies to Exxon and Mobil stations, which tend to cost a lot anyway, and (3) the standard rewards at these stations are only 1 penny per gallon.
Citi used to be involved with Upromise credit cards but Bank of America took over in 2009 and now issues/manages them. This is a turnoff for many people, since we all know B of A isn’t exactly known for stellar service.
Are either of the Upromise cards worth it?
At first glance, the 10% sound exciting. But you have to realize that is only on eligible items. For most people only a small percentage of their shopping would qualify.
For example, let’s say you spent $100 at the grocery store and among that was $5 in eligible Upromise items (and those participating items gave 1%). Your total rewards would break down as follows:
1% back on all credit card purchases = $1
1% back on Upromise items = $0.05
10% extra on Upromise items = $0.50
Total Rewards: $1.55 for spending $100
As you can see the Upromise credit card rewards in actuality aren’t too exciting. Furthermore, since Upromise participating items are usually more expensive name brand items anyway, you almost always would be saving more simply buying a store or generic brand instead.
Is there a better option?
Of course you should use your Upromise account to rake up savings, but the added rewards from the Upromise credit card are far from impressive. A better option would be to get a higher cash back credit card and then deposit that money yourself into your 529 savings plan.
I have the Upromise card, and when you couple it with their promotions, it can add up nicely – such as when we needed a new A/C unit – we bought thru Upromise, which was offering 11% cash back at Sears at the time when using the card, so we got about $30 cash back on it, Sears has a rewards program too, so we received points on the purchase for Sears as well. I don’t use Upromise exclusively and pay it off in full each month, but you can also withdraw whats in your account and have them cut you a check, which they do quarterly. I would do this each year before Christmas and usually got about $100 each time.
I recently opened the Sallie Mae savings account, and they give you a bonus each year (which is a percentage of your Upromise earnings). This past year, I got about $11 bonus to my Sallie Mae account, and that’s not horrible considering they have a competitive rate, and it really was no extra work on my part. The $11 was the equivalent of about 2 mths. of interest since interest rates are so low, but every little bit helps.
Been a member for 10 years. Always pay off the credit card. However, it is not our main card. Have saved over 3300 on Upromise.
My wife spends a lot of $$ at HSN, QVC, and Shop NBC–always go thru the Upromise website when she buys, those 3% or 4% add up. When I am shopping on line, renting a car, or planning a vacation; I always go thru Upromise.
I’ve been enrolled since May 2011 (now Sept 2011). I’m using the program to help pay off my existing student loan quicker rather than saving up for a child’s education. I simply can’t see a way to complain about free money. I am earning money three ways: 1) the credit card, which gives me 1% back on all (all!) purchases. I used to have a reward card that paid me 1% toward a certain large online retailer, and that was fun, but I much prefer paying down my loan than buying something new that I probably don’t even need. 2) credits via grocery store (etc) loyalty cards. I don’t get much here, just 30 cents here or there, but I’ll take it. and 3) using the online portal (with the TurboSaver application that makes it convenient) which basically seems like an affiliate scheme that lets you in on some of the deal. I am careful not to buy anything I wouldn’t buy anyway, and of course never carry a balance on the card. I’ve never come across a single fee. Every 3 months I get a transfer directly into my Sallie Mae account. While I was shy about getting family and friends involved, I recently told my mother about it and she has registered her loyalty cards and signed up for the credit card, because she really wants to help. I imagine that’s going to double my rewards right there. I know a lot of people feel entitled but I simply cannot complain about the $70 just transferred to my account last week, or the future quarterly payments that might be even bigger.
If you link a 529 plan to Upromise than the money is transferred quarterly to said 529 plan.
We have the upromise credit card, and have saved 358.00 since jan 2011, we too pay off our credit card every month so the interest has no bearing on us. but i will say that the bonus for opening a credit card was 50.00 on the first time use of the card was a night mail I have had to write and call at least 10 times and finally received the fifty dollars aug 13 2011 and this was a total fight. the call center is in India and the understanding barrier is a nightmare. i have received lies saying that it was deposited by one person then told it would be deposited and wasn’t. I have kept an updated account on the money that is owed and i continue to have to fight for small amounts like .55 but this is my money and not theirs. so i will continue to be diligent on this. Since the grocery coupon data base changed it is always after 90 days when it disappears from account then it never hits the deposit. so be careful they tend to slipping on every penny that is owed.
frakes74 is right. The money does not go into a 529 plan. You can take the money out and use it for anything you want. Anything at all. Of course the smart thing to do is invest it in some way for your children, I have had the account since 2006 and have received just over $3,000 from Upromise. We pay it off every month, so the interest rate does not mean anything to us either. Upromise works for us!
The money DOESN’T go into a 529 plan…try again and research a bit more. I have been a memeber for 8 years and this is in no way shape or form a 529 plan. Upromise is not a savings account.
Really…it is just a better way to shop. It all adds up in time. I will be able to pay for both of my childrens textbooks during their first two years of college.
Take the upromise money and invest it into a high interest savings account, CD or 529 plan. This is what I do and it is simple.
Also if you pay for everything that you would normally pay with cash and pay your credit balance off at the end of every month then you won’t have to worry about paying any interest. I have done this for years and it has worked out to my advantage. It is about will power…
Check out the interest rates on the Upromise credit card:
0% Introductory APR for the first 7 or 10 statement Closing Dates following the opening of your account, based on your creditworthiness. See footnote 1 for explanation.
After that, your Standard APR will be 12.99% to 20.99%, based on your creditworthiness when you open your account. This APR will vary with the market based on the Prime Rate as set out in the Variable-Rate Information section of your Agreement.
Let’s see…1% back with 20% interest. Think that’s a way to save for college?