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Is Upromise a Scam?

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There are a lot of programs out there, and you might be worried about which programs are legitimate, and which really will help you earn rewards and save money. One of the more popular programs out there is Upromise, acquired by Sallie Mae in August of 2006.

Upromise is a program designed to help you save up for college. The idea is that every day purchases can add up over time so that your child has enough to go to college. Upromise comes with the added benefit of allowing you invest your rewards money into a 529 college savings plan and help pay down your student loans.

How Does Upromise Work?

Upromise works by helping you earn money for college. You don’t need a credit card to participate. You sign up, and then you can register different shopper loyalty cards at different grocery stores, as well as debit cards. When you buy certain items (not all items will provide you with money), a few cents are put into your Upromise account.

You can speed up the process with the help of a Upromise branded credit card (currently through Bank of America) and by shopping with particular partners online. If you shop through the Upromise site, a percentage of purchases at various retailers, from Wal-Mart to Amazon, and travel sites, from airlines to aggregators like Expedia, goes into the Upromise account. If you use your credit card, you get 1% cash back into the account, plus you get the percentage of the purchase from the merchant in question.

The money accumulates over time, and you can use it for your child’s education. It’s possible to split your contributions as well; my parents split their Upromise rewards cash between their six grandchildren. It’s also possible to choose from a limited number of 529 college savings plans. You can invest the money you get from the program to help it work a little better.

The Reality of Upromise

It sounds promising, but in reality your money will add up slowly. Unless you have a strategy that involves purchasing everything with your Upromise card, and conscientiously doing most of your shopping through the Upromise web site (or using the browser plug-in to help you shop better), the amount you end up with will be quite small.

Also, you have to realize that you can lose the money you invest in the 529 plan if the markets go south. I’ve been doing Upromise since my nine-year-old son was two or three, without really thinking about it. Since I don’t have a plan, and I often use another rewards card instead of the Upromise card, in the last few years we’ve managed to save up enough to probably cover two semesters’ worth of books. But it’s better than nothing (I have a separate 529 plan, though).

Bottom Line

Upromise isn’t a scam. It’s a rewards program that can help you save up for your child’s education. However, the cash back you get for that purpose, even if you invest it in a 529 plan, isn’t likely to build to the point where you can cover four years of undergraduate education. While it might amount to a small bonus later on, you’re better off making a better plan to help your child pay for college.

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77 Responses to “Is Upromise a Scam?”

  1. Owen says:

    I have been using Upromise since its inception. My children have a little over $16,000 in the 529 accounts tied to their Upromise accounts. The total is comprised of money back through Upromise, interest on investments, and our contributions. It is not a bad supplement to your overall college savings plans. You do have to set up the 529 right away so the money goes out of the Upromise account ASAP. Upromise initially partnered with Vanguard to carry the 529 account and they offered great mutual funds, etc. to invest the money in. They are now partnered with SSgA Funds. They are offering mainly target date funds with recent inception dates. Not good. This is the problem with all 529s (and 401(k) accounts for that matter). You are forced to invest only in what they are offering. Thus, this is the reason you should not put all your eggs in one basket. This is why I also invest the maximum in a Coverdell Educational Savings Account, also known as Educational IRA. The maximun contribution has been $2,000/year per child. You can go through a company like eTrade and have access to just about every mutual fund available.

  2. Anonymous says:

    I’ve been using Upromise for years as a way to pay back student loans. Once I did that, I now have the Upromise money roll over into a savings account every month. I have complete access to the money in that account if I need it. I put everything on the Upromise card, pay it off every month, and take advantage of as many offers as possible. I’ve saved thousands, which I wouldn’t have been able to do on my own without it. I will say that I used to think the customer service was awesome at Upromise until Sallie Mae bought them. It has gone way downhill.

  3. RonN says:

    When did it become required that parents were obligated to pay for their children’s college? I worked my way through college. My parents could have paid but my Dad said I would learn about real life. He was right!

    • Matt says:

      Your parents are legally required to help you pay for college until you’re the age of 24, unless you’re emancipated. That is what a FAFSA rep told me when I asked why I needed to submit my parents tax records when applying for a Pell grant, even though my parents haven’t supported me since I was 17 years old.

      • Anonymous says:

        There is no law that parents are required to pay for you education after age 18. Do what we did and get a job and pay your own way!

  4. My experience (November 2013) with Upromise and Priceline has been very misleading if not a scam. At that time, Upromise promised 3.5% cash back on cruises booked through Priceline.

    The cruise (4 nights, 2 travelers) we booked on Priceline was $545.13 in total, and showed up as roughly $160/person + taxes when booking. At the very least, I expected to get the 3.5% cash back on the 2 x $160 = $320, which equals roughly $11.2 in cash back.

    I was quite surprised then to learn that I got only credited $4.10 in cash back. After emailing back and forth with Upromise, it turned out that our total of $545.13 was split the following way:

    Your Price: $118.00
    Taxes and Port Charges: $402.14
    Processing Fee: $24.99
    ——————————-
    Total Price: $545.13

    Thus, we ended up earning 3.5% cash back on the $118 only.

    Whether the fault for this creative accounting lies with Priceline (who have incentives to minimize their payments to Upromise), or whether the fault lies with Upromise, I cannot tell.

    However, the cash back received is clearly much less than anyone would reasonably expect when booking a cruise with a total price tag of $545.13 and 3.5% cash back.

    Since this experience, I have stayed away from Upromise and used other cash back portals instead.

    Bottom line: I only care about the cash back on my total amount and not about the cash back after creative accounting on someone else’s part. In this case, the cash back turned out to be only $4.10 on $545.13 – a mere 0.75% instead of the promised 3.5%.

    Wolf – CreditCardBonanza.com

  5. LT says:

    I have been a member of Upromise since August 2006. My credit cards are registered with them, as well as my grocery cards. The majority of my shopping for non-food items is online. I always check Upromise before making a purchase. I have only earned a little more than $200 in the past eight years. I would say that at least 50 percent of the time I do not receive credit for my purchases. Somehow there is no record of me accessing partner sites through Upromise.

  6. PW says:

    All I can say to everyone out there is that there is no cash back program that really earns you a ton of money/credits, unless of course you spend $10,000 to $100,000 a year that way.

    I have been a member since 2009 and have earned back $1,500 which I used for student loan payments. Also keep in mind that the amount is on the purchase price and not with taxes and shipping included. There are also restrictions on certain items that do not qualify even if the company is registered with UPromise. This is no better and no worse than any other card or program out there.

    When I intend to make a purchase, I look to see if UPromise deals with that vendor, if so, I will make the purchase. After all there is no harm and no foul if you don’t get the reward. For me, it is $1,500 plus interest that I did not have to pay back to Sallie Mae, and I would have bought the product regardless.

    Bottom line is, it is the buyers responsibility to determine what they are trying to accomplish, and if this program does not work for you, just walk away and fine something that does.


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