I Saved $500 For College Tuition At Upromise But Be Wary Of Hidden Fees.
Sep 27, 2003 (Updated Oct 18, 2005)
|Effort vs. Reward:
I have been member of Upromise for over two years. I first signed up because of the promise that it would help me save for college. To date, I have earned about $300. Additionally, friends and family have deposited another $200 in our account. Of course, this is free money, so I can't complain. However, $500 split between two kids will probably buy a couple of textbooks at most when it is finally time for them to go to college. Upromise is hardly a means to pay a large amount of tuition. However, it is relatively easy to earn money and it makes sense for people who have certain types of investment accounts set up for their children.
THE KEY TO SAVING MONEY ON UPROMISE IS THAT YOU NEED A CERTAIN TYPE OF SAVINGS ACCOUNT SET UP FOR EACH CHILD
You must have a "529" savings plan open for each child that you intend to register in the Upromise program. If you don't have a "529" plan, you will never be able to get your money out of Upromise.
"529 Plans" are a very specific kind of investment tool. They allow you to deposit after tax money into an account that will then be tax free when the child is in college. These accounts may not be the right choice for everyone. You can't control the types of investments in a 529 plan - generally you can only pick from a very limited choice of stock funds.
Also, most "529 Plans" require you to deposit a certain amount monthly. Typically, this amount is at least $50 per month. This is in addition to anything Upromise will deposit. Also, many plans have fees. The Upromise 529 Plan offered on the site charges a $20 per year annual fee. Some 529 Plans charge enrollment fees.
We have had 529 Plans open for our two children through Fidelity Investments because Fidelity does not charge a fee (yet). We opened them in the middle of 2000 and with the poor performance of the stock market, each one has lost money. As I said, these plans are not for everyone. Upromise no longer links to Fidelity 529 plans, so in order to get our money from Upromise, we would need to roll the money into a 529 plan through another bank that Upromise links to or we would need to open new 529 plans.
The bottom line is that you have to make a decision first about whether you want to open a 529 Plan. If you think this is the right decision for you, then you should definitely start a Upromise account because Upromise is like icing on the cake. It will make a small deposit in the 529 Plan account every six months or so. However, Upromise is completely worthless unless you plan to commit to one of these accounts.
GETTING STARTED ON THE SITE
Of course, you need to enter your name and address. The next thing you should do is enter your credit cards so you can receive certain rebates. Then, if you live in certain areas, you can enter your shopping and drugstore customer card numbers. You should also scan the site to see if there are other programs you want to particiapte in. I discuss these programs more below. Finally, you must enter your 529 Plan information in order to receive the money. This can be done later, after money has accrued, but ** you will not get any money unless you have an active 529 Plan and have entered the information.**
Set up time is somewhat lengthy. It takes a while to compile the information and enter it. It may also take the site several days to process the information before it becomes active. You can set up your account over time.
HOW TO SAVE MONEY IN YOUR UPROMISE ACCOUNT
Over the last two years, a lot of companies have joined or left Upromise. How you earn rebates is continually changing and you must check with the site frequently to be kept up to date.
Online shopping: Upromise has agreements with many online stores. If you shop through a link on the Upromise page, you will be credited back 1-8% and even up to 25% in a few limited cases of your purchase price. Many online stores participate in this program and if you shop on line a lot, you can earn quite a bit here.
Restaurants: You can get a 10% rebate if you eat in certain restaurants, sometimes during slow periods only such as weekdays, and you pay for the meal using a credit card registered on the site. Not all areas have restaurants enrolled with Upromise and this program has changed quite a bit since we started on the site. Currently, there are no restaurants listed for the Boston area.
Grocery Shopping: You can get a teeny rebate on certain items, such as Coke or Kellogg's cereals, you buy in the grocery store by using a customer card at certain grocery stores only. This is a nice feature of Upromise, however we only usually earn a few pennies each trip to the grocery store so these amounts add up very slowly.
Stores: Some local stores give rebates, such as dry cleaners, florists or mechanics, if you buy the product using a credit card registered with Upromise. Sometimes large chains, such as Bed, Bath and Beyond offer discounts.
AT&T: Donates a percentage of your long distance bill to Upromise.
Upromise Citibank Card: You can get a Upromise citibank credit card that deposits 1% of everything you spend into your account. We had a miserable experience with Citicard so I can't recommend getting one.
Other Opportunities: You can get 3% back on McDonald's certificates, a small rebate on gas you buy from Mobil and there are also deals from mortgage companies and a lot of other miscellaneous options.
How much you earn will depend on how loyal you are to seeking out Upromise rebates. I don't go out of my way to buy certain foods or eat at certain restaurants solely for the rebate. However, we still earned $300 over two years.
HOW IT WORKS
After you make a purchase, you will get a credit to your account. The credit may not show up for several weeks. Even then, the credit is not actually funded. At first, amounts show up as "pending." After several more weeks, or even months, the credit will be funded meaning it adds to the dollar total of your account. Once you have a certain dollar amount - for Fidelity it was $50 per child - at the end of a quarter, Upromise will move the money to your child's investment account. The entire process is very, very long. It may take 6 months to a year before money is actually deposited into an actual bank account.
WEB SITE PERFORMANCE
This site is very slow to load pages. There is a lot of text and links on each page but it still loads more slowly than most other sites i have used.
Navigating around the site is intuitive and easy. There are also good help areas where you can get questions answered.
FRIENDS AND FAMILY
You can ask friends and family to set up a Upromise account, enter their credit cards and shopping cards and then have the money donated to your account. We did this and it added an extra $200 over two years to our balance.
THE NUMBER OF CHILDREN YOU HAVE IMPACTS HOW MONEY IS TRANSFERRED
You can create subaccounts for individual children and then allocate your earnings among them. For example, I have two children and they each get 50% of the earnings. However, in order for a transfer to be made, you must have $50 in a child's account. Therefore, if you have two children, you will need to earn $100 before money transfers. If you are earning money very slowly, you might want to enroll only one child.
Upromise keeps good records and you can access your account on the site.
ANOTHER REBATES SITE
If you don't want to bother with a 529 plan or don't have kids or for any other reason, you can earn cash rebates on a site called Ebates.com.
I like Upromise because we had already decided to open 529 Plans. During the first two years, our plans did poorly (no fault of Upromise) but the extra $500 from Upromise did make up some of the difference. The Plans have performed better in the last few months and I think we are finally in the black. Unfortunately, Upromise dropped its affiliation with Fidelity, so we will need to move our 529 money to another bank in order to keep getting Upromise contributions.
I would recommend an account with Upromise only if you believe a 529 Plan is right for you.
DO YOU LIKE TO SHOP ON THE INTERNET? HERE ARE SOME MORE REVIEWS OF WEB STORES:
Clothing and Accessories: Talbots; The Gap; CWD Kids; Hanna Andersson; J. Jill; Tote Le Monde ; Blu Pyxie ; Miniboden; One Hanes Place; Nordstrom; Gymboree; Simple Shoes; Sierra Blue; Ebags; Shoe Dawg; Osh Kosh; Backcountry; Figleaves.
Clothing and Home Goods: Lands End; Bluefly; Soft Surroundings; Garnet Hill; Sundance; L.L. Bean.
Home and Garden: Smith & Noble; Restoration Hardware; Gardeners Supply Company; Unicahome; Homeclick; FaucetDirect; Gardens Alive; West Elm; Crate & Barrel; MyKnobs; CB2.
Books and Magazines: Amazon.com; ValueMags; Magazine Values; Dover Publications.
Office Supplies, Furniture and Services: Staples; Officemax; Topdeq; Efax.
Electronics: HP Shopping; Buy.com; ABT Electronics.
Travel: Amtrak; Hotwire; Orbitz; Hotels.com.
Discount: Overstock.com; Target; Smart Bargains.
Photo Developing: Shutterfly; Snapfish.
Baby Stuff: Babystyle; Babys Here Birth Announcements; Baby Universe; SoZo; Baby Center; Baby Age; One Step Ahead.
Miscellaneous: 1-800 contacts; Movie Tickets.com; Drugstore.com.
Rebate Sites: Ebates.
Before you start shopping, check out my tips on how to save money by shopping on the internet . I have also included some coupon codes and plan to add more as I find them.