I Promise if Upromise
May 1st, 2006I often get asked about various ways to save for college. One program I recently ran across is called upromise. In short, upromise has deals with lots of different companies to provide users with rewards for buying certain products or using certain services.
Basically, all you do is go there and sign up and then give them a bunch of data about your credit cards, store rewards cards, etc. Then, anytime you buy one of the items that is in the program they give you 1% back to save for college.
On the surface this seems like a great idea. After examining it further I think I will pass. Most all of the rewards are 1%. There are some higher rewards but in general one could expect only a 1% return on the money they spend. If you spent $2k per month on these products (probably much more than the average family would spend) you would only get a reward of $240 at the end of a year.
Not much money eh? Worse than that, most of the items and services are brand name things. You could easily end up spending more than 1% in premiums over and above what you might spend on generics, making the use of the program a net loss. You might also go out of your way to purchase some things or eat at certain restaurants which you otherwise would not have. That may add extra fuel costs and cut into your savings as well.
So what sounds like a good idea to me ends up being a wash. I would not do upromise for the reasons mentioned above AND the fact that I do not want to have to worry about which items to buy in order to receive my reward.
There are thousands of creative ways to save more than $250 per year. Try one of those instead of this.
"I was thrown out of college for cheating on the metaphysics exam; I looked into the soul of the boy sitting next to me."
-Woody Allen
Disclaimer: this post is for informational purposes ONLY. Please read the disclaimer before even thinking about relying on me to make a financial decision!
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Comments:
Fidelity has a credit card that rewards you 2% for all purchases on their Fidelity-branded credit card. You just need a Fidelity 529 and then you link them. If there is a maximum for charges, it's pretty high. The card is free as well. Can't beat that!
Posted by: Shawn M. - www.niagarafinancial.net
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