Save a ton of money for college just by shopping! That's the idea behind UPromise. I thought it sounded a) pretty darned good and b) maybe too good to be true. So we thought I'd do some research....
What is UPromise and how does it work?
UPromise is a corporation owned by Sallie Mae that lets members save money for college through shopping with affiliated companies and vendors. Joining the program is completely free and you get anywhere from 1% - 25% of your spending back each time you spend money with one of their affiliates.
Affiliated companies include Gap, Expedia, Barnes and Noble, Groupon, DSW Shoes, ToysRUs and Staples. You can also invite friends and family members to contribute to your savings with their purchases.
Where you have the money deposited is up to you as long as it's a Sallie Mae account. The money can be used to pay off a Sallie Mae loan, or deposited in a Sallie Mae savings account or Certificate of Deposit Account.
Wait, where's the catch?
The first is that actually making your purchases through UPromise is involves a complicated monitoring system. User reviews indicate that it's unusually difficult without a Bank of America backed UPromise credit card. Which brings us to an entirely new can of worms.
_The Bank of America UPromise Mastercard._These cards only work for gas, groceries and dining. You can use one for gas (at certain Exxon or Mobile stations) and groceries. In order to save money on dining out, you'll need to get the Dining and Groceries rewards card.
You should also remember that only specific items (often name brand and more expensive) qualify for UPromise cash back. This means that you might spend $100 at the grocery story and only $5 of the total purchase will count towards your cash back.
On the other hand.
Fortunately, the UPromise credit cards have pretty solid interest rates and offer a 0% balance transfer for the first 7 - 10 months. Rates for the Sallie Mae Savings and Certificate of Deposit accounts are also pretty competitive.
I won't deny that something about the combination of Bank of America, free money and credit cards put me on the defensive in a big way; but try as I might, the only really fishy thing I could find about UPromise is the fact that most people haven't been able to save much.
The final word from this student-loan-burdened blogger:
Unless you're good with credit cards, deposit your UPromise cash back into a Sallie Mae Savings or Certificate of Deposit account. The credit card is probably a good option if you're a parent (or fiscally responsible individual of any age) and plan to use it for the gas and groceries you would be purchasing anyway.
Learn more about UPromise on their FAQ page.