On a daily basis I must receive an email which promises something “free.” I then ask myself the following question: What is the catch? Few things in life are actually “free.” The next best thing is “almost free,” and there are several college rebate programs that provide benefits that are just that. There are a host of such programs, but I am going to focus on one today in particular – Upromise. These programs have a few small drawbacks, but I believe their benefits compounded over several years are well worth it.
UPromise – A Promise of $$
Upromise, a Sallie Mae owned company based in Needham, MA, first began its Upromise Rewards program in 2001. The program allows individuals a couple of options for obtaining rewards: a) by linking your credit or debit card to the Upromise website OR b) by obtaining the Upromise MasterCard.
The first option requires you to sign up for a Upromise account on the Upromise website. From there, you have several options for obtaining rewards. You can earn anywhere from 2-20% cash back for any online purchases through one of the 850+ partners affiliated with the program so long as you utilize the Upromise.com portal (you can search by either product or by retailer). You can also receive rewards up to 8% if you eat at a participating restaurant – you need to utilize a credit card connected to Upromise. You can also earn rewards by shopping in the grocery aisle by connecting your store rewards card to the Upromise website, pre-load any E-coupons you expect to use in the store, and have your rewards card scanned after you have selected the products associated with the E-Coupons. Planning a trip? If you utilize one of the travel partners connected to the Upromise program, you can earn up to 5% cash back by utilizing the Upromise travel portal to book your trip; there are a variety of hotels and cruises available – this is particularly true of cruises, as all of the major cruise companies are represented on the Upromise website. There are also several additional ways to earn cash rewards, including in store offers for participating retailers, certain car rentals, certain online surveys, even having your friends and families sign up ($20 just for having others sign up and make one participating purchase!).
Another option is to apply for the Upromise MasterCard. Once approved, you will be able to use this card and receive cash back rewards depending on where you utilize the card. You will receive 5% cash back on all purchases through their portal (similar to above), 4% on all eligible restaurants associated with the program, 3% at all Exxon or Mobil gas stations, 2% at movie theaters, and 1% on all other purchases. This allows you to potentially receive double cash back, since this is on top of bonuses you have met under the first option (last paragraph)! For extra cash, there’s a sweet signup bonus: You’ll earn $100 cash after making your first purchase within 90 days.
What’s the Catch Upon Redemption?
In simple terms, there is none. Upromise allows several different avenues. You can utilize the money you earned to be linked directly to a 529 plan you have set up so that any money earned will be transferred directly to a 529 plan. If you utilize a specific Sallie Mae savings account (Sallie Mae Goal Saver), you can directly link your Upromise account so that any money swept into such account will be matched by 10% on any Upromise rewards swept into the account (interest rate of 0.85% on the account). You can also link yours or your children’s student loans directly to your Upromise account, and Upromise will give you an extra 2% of the monthly payment amount directly into your Upromise account. Note: only Sallie Mae serviced loans, Navient serviced loans & Bank of North Dakota serviced loans link directly with Upromise).
In terms of rewards, we believe strongly in linking your 529 plan to your Upromise account – this is a “set it and forget it” type of setup that will allow you to earn some extra money which will be compounded in a 529 plan. Also, if you or your children have student loans, the fact that you get an extra 2% based on your payment is an amazing benefit – based on the fine print, all you need to do is make your payments on time. Finally, if you simply want to get a check and put the money in your pocket – that works well too; there is no restriction for utilizing the money earned for anything in particular.
The biggest issue with Upromise (that is really only an issue if you make it one) is the time that is involved with the initial set up and keeping an up to date credit card linked. I have seen with our clients that they forget to keep their cards linked and years go by where they could be earning the rewards of the program. Second, you get the best “bang for your buck” by utilizing the Upromise website for any online purchases (and potentially some travel). Our clients who make best use of this “free money” are those who take the time to go to their website first to see if they are eligible for any rewards. This, of course, takes time and effort. However, if your goal is to help your children/yourself as much as possible, the effort can be well worth the reward. I read about an individual online who has saved over $15,000 through Upromise over the years. That is half a year of college that has been paid for by doing very little.
How Does Upromise Benefit?
Upromise is not helping merchants due to the goodness in their hearts. They are receiving a cut of any purchases you have made through their online programs/portals. Thus, if you utilize their portal to go to Amazon and buy something, Upromise is going to get a cut of the purchase price that outweighs the rewards they are providing you. Second, Upromise has the ability to track what you purchase, which as we have seen, is big business. I am personally of the opinion that companies are doing this regardless, so the slight loss in privacy and the fact that they are being profitable based on my purchases does not really bother me.
I have kept this somewhat high level, and with everything nowadays, there is always fine print. We have done the legwork in trying to understand the legalese in Times New Roman size 5 font, so if you have any questions or concerns (or any positive/negative outcomes utilizing this program), please feel free to reach out to Anthony or I.
Karen DeRose and Anthony DeRose are registered representatives of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. DeRose Financial Planning Group is not an affiliate of Lincoln Financial Advisors.