[Editor's Note: I've now been blogging long enough that I'm starting to have partners who began reading my stuff before coming to work with me. One didn't realize who I was until after we were working together. The author of this guest post, David Swenson, MD, realized who I was en route to his interview here. He was reading my book on the plane and had me sign it at his interview! At any rate, we have no financial relationship, except for the fact that technically he's my employee for another year and we're likely to be joined at the hip financially for the next two or three decades. Prior to last week, I had no relationship with UPromise and I have never had a relationship with Sallie Mae (thank goodness.) But as you'll read at the end of the post, I signed up for UPromise's affiliate program just for fun. So if you sign-up for UPromise through links on this page, I get $2. Enjoy the post!]
How to pay your loans off faster without even thinking about it!
Ok, maybe it isn’t quite that simple, but it’s pretty close. When I told Jim about a website I’ve used for a number of years, he invited me to write a guest post about it. Before starting medical school, I was already trying to figure out ways to reduce my future debt and joined an online program called UPromise, a service run by Sallie Mae. It gives cash back for purchases that can be applied to currently active student loans or deposited into 529 accounts for those who are putting money in a college savings account for themselves, a family member, or a friend. The website is fairly easy to navigate and explore, but I’ll summarize the key benefits here.
Before we begin, please note that this is in no way an endorsement to go online and rack up tons of debt in credit card expenses because the best way out of debt is to avoid cards altogether. Rather, if you are going to be making online purchases with a debit or credit card anyway, it is nice to get a little extra cash back that would have otherwise gone unclaimed. Also, before applying for any new credit card, consider the impact credit card applications may have on your credit score if you are planning on making an additional major purchase in the near future, e.g. home, car, boat, etc. [Editor's Note: Please don't buy cars or boats on credit.]
Only one way to that boat
Getting started
UPromise is an online service that provides cash back on purchases. You start by signing up online, which is straightforward and costs nothing. Next, you “register” your cards by entering in the debit/credit card numbers you want to have associated with your account. Then, you choose a beneficiary for the cash back (e.g. your own student loans, a 529 account, etc.) and that’s about it.
How to Earn Money
The primary way to earn money is to purchase items online, which will earn you anywhere from 1% to 40% (most are 5%) of your total purchase amount in rewards. It works like most online rewards sites which, if you’re not familiar with them, aren’t terribly complicated. You log on to UPromise, go the list of online merchants, and then click on the link for the merchant to get to their website. Any purchase you make after going to the merchant’s website from UPromise will then register your purchase at UPromise and you’ll earn the specified reward. Buying flowers for someone? 10% cash back from 1-800 Flowers. DIY’er with a home project in mind? 5% back at Lowes. New office furniture? 5% from Office Depot. Big into outdoors? 5% from Cabela’s or Backcountry. Traveling? Orbitz, Expedia, Travelocity, Priceline, and many others participate.
A second way to earn money via UPromise is through their restaurant program. By eating at a restaurant and paying with any card registered on UPromise, the rewards will automatically be applied to your account. This one is so simple, you don’t even have to know the restaurant is a participating member and it would still give you 5% cash back off your entire bill, taxes and tip included! If your choice in dining is McDonald’s this won’t help you much, but enter your zip code on the website to find participating restaurants and you probably won’t be disappointed in the participating locations for your area.
How to earn even more money
To boost money saving even more, you can get a UPromise Mastercard. By purchasing items through the online merchant catalog or using the card at participating restaurants, you get the reward you would have otherwise earned PLUS an additional 5%. Now all the lumber and hardware for your DIY project will earn you 10% at Lowes. Also, by using it as an “everyday” credit card, it will give you 2% back at department stores and movie theaters, and 1% on everything else, no annual maximum limit. There is no annual fee and no rotating reward categories.
What if I already have a cash back card?
Good. Keep using it. My family has 2 cash back cards that we use for all our purchases (we pay the balance every month) and we get rewards on these cards in addition to the rewards from UPromise. The camping gear from Cabela’s earns us 5% at UPromise plus the usual 2% on our credit card that we get from any other purchase.
Summary
UPromise lets you earn money toward student loans/college savings and it’s pretty pain-free. Will an individual purchase make a huge difference toward your total loan burden? With average medical student indebtedness over $160k probably not, but if someone offered to put $50 toward my student loans, I wouldn’t turn them down.
[Editor's Note: Okay, I'm sitting here editing this post and saying to myself, “Self, why aren't you doing this? You have 529s. You're leaving some free money on the table. And while you're at it, why don't you see if UPromise has an affiliate program for bloggers.” Well, it turns out that Upromise won't make payments into my Utah 529. You have to use one of fifteen 529s (run by Ascensus). One of those is in my neighboring state of Nevada, well-known for its excellent 529. However, the plan that Ascensus runs isn't the famous Nevada 529 Plan run by Vanguard. The funds in it are mostly “SPDRs” and you can get the S&P 500 portfolio for 0.35% per year, plus $20 a year if you don't have a Nevada address. You also get hit with a $20 fee every time you do a rollover out of the plan. Not terrible as 529s go, but not great, especially for the tiny account I would probably have there. The downsides made it so this wasn't quite worth the hassle to me to open a new 529 and sign up with UPromise, but you may feel differently. And if you do, well, sign-up through my affiliate links on this page and I'll get $2. I think I would probably do it if I had student loans with Sallie Mae. If enough of you sign-up, I'll even buy Dave lunch at the hospital cafeteria!]
What do you think? Do you participate in UPromise? Would you consider signing up for it? Why or why not? Comment below!
What is the disadvantage of using this and the savings account and then just withdrawing the money from the savings account? I dont see anything that says withdrawals must be spent on college.
I had registered for UPromise. At the time, it really was ineffectual. Even though the cards were registered, nothing we bought seemed to apply. And I was NOT about to buy things just for UPromise money. Why spend $6 on a particular orange juice to get a percentage back, when I could spend $3? (and so on and so forth).
While we had everything in, I think overall, we got something like $2.25! That was it. We just didn’t use the service. Furthermore, we HATED Sallie Mae. The customer service, the rates… everything about it. Fellow residences were (forgive me, trying to find a politer way of saying it but I can’t) “screwed over” by them.
We had high interest rates. The best thing we did was get all our loans out of there. We currently have DRB, but there seems to be a nice price war between them and So-Fi. We’ve gotten better offers from So-Fi, but don’t want to keep going back and forth and our rates are good. We saved plenty of money by just getting out of Sallie. No UPromise needed.
We have lower rates, better service, and can just do our normal deals when shopping. And we get further deals because we play the credit card game. (No we don’t carry debt, that would be dumb if you can afford to pay off cards, do it!) We have 4 cards. One for 3% off gas, one for groceries, one for travel (my family lives a 3hr plane ride away and my inlaws are a 5hr drive … so we do travel for family), etc.
In theory, UPromise is good. Certainly if you have Sallie Mae it makes sense to enroll, but personally, I’d be passive in using it.. don’t spend money to save money. But my advice would be get out of Sallie and don’t worry about UPromise.
+1
Sallie Mae is among the worst companies I have ever dealt. And I have dealt with several other loan servicers. They are amazingly incompetent and their customer service is atrocious. I could go on but I am so glad I refinanced with SoFi.
My husband signed us up years ago as he does more online shopping than I do. We also have the Upromise MC as one of our three credit cards. I set up the money to go straight into one of our 529’s. Little amounts add up over years. We’ve been doing this at least seven years. Might as well get money back for spending you do anyway as long as you resist the overspending trap you can get into with cc. For me, spending is painful enough that cc help. And WCI, yes I have put cars on cc! Dealerships let us put $2000 on them per car. We paid all college tuition and plan to pay med school tuition on them also. The big purchases add to the kitty faster. We are now pulling money from the 529’s for our older kids to pay off the credit card bills for their tuition. The new Upromise money gets deposited into our youngest’s 529. It easy to set up and then just forget about.
Nice post David. Hope to see more from you. Enjoy your new job. Best wishes!
Weird about the limited investment options. I set up a Vanguard 529 in my usual account portal (through Nevada) and linked it to Upromise. Upromise dumps money into it every quarter. I get back about $300/yr–not life changing, but better than a stick in the eye. Mother’s day flowers, dog food from Petco, gear from REI…the biggest is hotels.com…cheap rate, 5% back, and still get reward points. You can also give a link for family, but we didn’t have much success with that.
Well that’s interesting and different from what I saw. I’m much more interested if I can use the Nevada Vanguard 529 instead of the other one. I’d be A LOT more interested if I could link it to the Utah 529.
I think its a great idea to put big purchases on CC as long as you pay them at the end of the month. W my chase freedom I get 1.5% cash back or my wife Fidelity Amex gives 2% into Fidelity 529. CC companies pay us to use their card. Hopefully people who are not paying their bills are subsidizing us.
It’s not just them doing the subsidizing. The companies you shop with are paying 2-3% to the credit card companies to allow you to pay by credit card. I suppose it could be argued that that price is being passed on to you. Not that you would avoid it by paying cash usually.
I signed on to the New York 529 for my son, which I chose for the very low fees and access to Vanguard funds. At the end, I was immediately offered the opportunity to sign up for UPromise. I agree with others that if you’re going to use a CC anyway, why not take some extra cash that comes with minimal effort? Restaurant choices can be limited based on your geographic area, but it’s basically one of those “set it and forget it” deals so it’s certainly worth it. Online shopping covers a very wide range of websites, including all the main travel ones like Expedia, Orbitz, Hotwire, Priceline, etc. as well as many department stores, including higher end ones like Neiman Marcus and Bloomingdales. Amazon offers deals on certain rotating categories as well. All of this involves one extra click–hardly an inconvenience. It adds up to some reasonable cash back for little effort. By the way, this is in addition to the rewards I receive with the Citi Double Cash card–2% cash back on all purchases.
I have used UPROMISE in the past and I also have the Utah 529 so I just request a check be mailed to me every now and then (which is an option instead of depositing to a 529 or savings account) and then make a note to add that much to the 529!
If you’re going to try to get cash back from using credit cards, why settle for only 2-3%? This is pocket change
The real money in rebates from credit cards is to sign up for credit cards affiliated with hotel loyalty programs and airline frequent flyer programs to get the sign up bonus **and then moving on to the next program** once you fulfill the $1000-$3000 spending requirements. I have received enough miles/points in the last 16 months to book 20 free round trip plane tickets and over 20 free nights at name brand hotels. Go to sites like millionmilesecrets.com to learn how to do this. (I have no financial association with them).
The issue with that approach, while there is no doubt it is the way to get the most rewards, is the hassle factor.
I’m not a multimillionaire, so I love the thousands of dollars saved.
It’s really not much of a hassle as you only use one account at a time. After I meet the spending goal, I literally put that card in a drawer
Besides, I see it as a hobby. Some people track their investment portfolios, I track my miles/points.
Finally, I love getting free money from a Big Bank instead of getting screwed by them!
As a newly-minted third year medical student, I actually see some potential with this program. That said, my monthly spending is already low, and I don’t spend a lot in categories that would get rewards (restaurants, department stores, etc.). So overall the rewards are likely to be minimal on that front. I’d happily take any free money, though.
The possible upside, I think, is from the travel deals. If I were to book a flight/hotel/rental car through the Upromise portal and used a UPromise MasterCard, the total reward would be 11% (5% from the card and 6% from the portal). That’s a much better price to reward ratio than airline credit cards or my other cash back credit card. I can see this being very useful during the upcoming residency application cycle– it’s essentially a 10+ percent off coupon on interview travel. Even more if I put the savings towards my loans before the interest capitalizes!
The reward ratio can be much better if you count the sign up bonus for the card. For example, I just paid part of my property tax bill on a new credit card that gave me $500 for the first $2500 spent, or 20% back. I got 35,000 points from Starwood which can be turned into up to 12-16 nights at a Sheraton-chain hotel. I could give many other examples. In fact, medical students should pursue this because they might need to travel a lot for residency interviews and therefore should rack up a lot of miles and hotel points in anticipation.
I have a 529 plan with Upromise. I am using the 529 plan towards my son’s medical school tuition. Correct me if I am wrong, but my accountant who I pay a lot of money to and assume knows tax structure quite well, says I can only use 529 funds toward direct educational expenses but NOT to pay off student loans.
That’s my understanding as well.
So, one I have paid spring tuition for medical school year 4, there is no benefit for a 529 plan going forward?
I’m impressed you still have money in a 529 after 4 years of college and 4 years of medical school. You can assign it to your child or another relative or take some classes in the future I suppose. But I think most people would have burned through even a big 529 by this point. I assume you have no loans?
Actually I am still funding 529 plan. My stepson’s 529 plan is also funded by biological father. Collectively, we are funding 529 with about 15k/ year. One year paid in full from 529 plan, and another year paid by 529 plan and loan. Fortunately, no undergraduate debt.
Seems silly to finish with loans and money in a 529 plan. I’d try to avoid taking out loans until the 529 was gone.
I am a parent of an M3, and have been a user of Upromise for more than 15 years, and Have the Barclay Upromise card. We use the card mainly for online purchases. You must remember to login to Upromise portal before you begin your online shopping each time, and also to pause ad blockers and some other firewall screens, otherwise you lose the linkage from upromise to merchant. One great way to benefit is to order online for store pickup (use upromise link to buy dog food with Upromise Barclay card = combined 10% back…Walmart, Staples, Bestbuy, BJ’s, Petsmart, Kohls, Lowes, are all good prospects. Merchant percentage vary, but you almost always get some percent PLUS the 5% for putting it on the Barclays.
Like others, I have not had success getting friends and family to link to my Upromise account, and they probably would not remember to use the site anyways. That feature needs improvement.
Further, we seldom get the restaurant bonus since we can scarcely afford to dine out…we are supporting all costs of living for our student, as she is borrowing a hefty out-of-state tuition.
I used to dump the earnings into a 529, but these days I just make withdrawals when balance hits a couple hundred.
One other irksome feature of Upromise is that the hold your earnings in a “pending” status for way too long. I think that is how they gain profit, by holding your money for an extended period of more than two months in most cases. Boo! But, still, once you get the hang of it, it is tolerable and costs you nothing.
One further positive feature of Upromise is that periodically merchants offer special limited time bonuses, especially around the holidays. Amazon, Walmart, Sears and many others will offer 5 – 8% back.
Although not well publicized, you can request a check for any earnings from Upromise at any time. I’ve done this before, and I believe I was able to do so through an online form.
Did some research on the particulars of the Upromise program, and there were some revelations I did not see posted above that I feel I should relate here:
1. You can link ANY checking or savings account, not just 529 plans. I just did it with my Ally account. They state they will auto-transfer money monthly to the account if you have greater than $10 (checking/savings linked) or $50 (529 linked) in your Upromise account. Unclear why the different thresholds for transfer, and double unclear why it is lower for the non-college savings type accounts.
2. All 529 plans are supposed to qualify. Per this link with an official Upromise response: “We should have all 529 plans available.”
https://www.upromise.com/s/question/0D51I00000sNcNCSA0/if-my-529-plan-is-not-on-your-list-how-do-i-access-the-funds-that-have-accumulated
3. Ostensibly the money is for college, but there is no requirement to use it for such. Per the link with a Upromise official response, “[after you finish college] you can continue to use Upromise and use your earnings for anything.”
https://www.upromise.com/s/question/0D51I00000phXKISA2/can-i-continue-receiving-funds-from-upromise-after-college-is-finished
4. No more requesting checks. Per this link with an official Upromise response from late 2018: “We no longer issue checks.” https://www.upromise.com/s/question/0D51I00000l5ceUSAQ/how-do-you-request-a-check
I signed up today, despite some of the gripes about customer service and site revamping I came across on their forums (I never saw the old site for reference, so can’t speak to that). As far as I can tell, it is a second and free layer of rewards which stacks with any rewards card you currently have for minimal effort, and the money (though it is not well advertised) can be spent on anything.
What’s not to like?
I did some research on the particulars of the Upromise program. There were some revelations I did not see posted above that I feel I should relate here:
1. You can link ANY checking or savings account, not just 529 plans. I just did it with my Ally account. They state they will auto-transfer money monthly to the account if you have greater than $10 (checking/savings linked) or $50 (529 linked) in your Upromise account. Unclear why the different thresholds for transfer, and double unclear why it is lower for the non-college savings type accounts.
2. All 529 plans are supposed to qualify. Per this link with an official Upromise response: “We should have all 529 plans available.”
https://www.upromise.com/s/question/0D51I00000sNcNCSA0/if-my-529-plan-is-not-on-your-list-how-do-i-access-the-funds-that-have-accumulated
3. Ostensibly the money is for college, but there is no requirement to use it for such. Per the link with a Upromise official response, “[after you finish college] you can continue to use Upromise and use your earnings for anything.”
https://www.upromise.com/s/question/0D51I00000phXKISA2/can-i-continue-receiving-funds-from-upromise-after-college-is-finished
4. No more requesting checks. Per this link with an official Upromise response from late 2018: “We no longer issue checks.” https://www.upromise.com/s/question/0D51I00000l5ceUSAQ/how-do-you-request-a-check
I signed up today, despite some of the gripes about customer service and site revamping I came across on their forums (I never saw the old site for reference, so can’t speak to that). As far as I can tell, it is a second and free layer of rewards which stacks with any rewards card you currently have for minimal effort, and the money (though it is not well advertised) can be spent on anything.
What’s not to like?