Shop and Save for College: UPromise vs. BabyMint
I have joined both UPromise and BabyMint and have accumulated more than $400 of rebates with UPromise since 2004 when I actually started to use my Citi UPromise card regularly though I had the card and joined the program in 2002. I didn’t use BabyMint a lot, not because UPromise is better (well, in some areas, yes), but I started with UPromise much earlier than with BabyMint. Generally, I feel that both programs can provide some extra help when it comes to saving for college, and when started early and used wisely (especially the investing part), the savings can make a big difference 18 years later when my children go to colleges.
The followings are my experience with these two shop and save for college programs.
How they work
Both programs are free to join and work in almost identical way: join the program online (join BabyMint or UPromise), earn cashbacks by either shopping at their respective network merchants or in store using their respective credit cards, save and invest the rewards for future college education.
How to earn rebates
Both UPromise and BabyMint have their own network of merchants and, if you browse through them, you will find companies are likely to be in both networks. So if there’s no difference between network member merchants, how about the rebates one can earn to shop through them. That will depend on what you are looking for. Since I do most of my electronic shopping online, here are some the rebates offered by UPromise and BabyMint for some sites I used most often:
- CircuitCity: UPromise – 3%*; BabyMint – 1.5%
- CompUSA: UPromise – 1%; BabyMint – 2%
- Staples: UPromise – 4%*; BabyMint – 2.5%
- Buy.com: UPromise – 1%; BabyMint – 1%
- BestBuy: UPromise – 2%; BabyMint – 1%
From my experience, BabyMint offers slightly higher rebates, but UPromise has a wider selection and, from time to time, it runs promotions with extra rebates (they are currently offering extra 2%* rebates through March 31, 2007).
The two programs also offer their own credit cards for members to shop in-store and earn cashbacks. However, the BabyMint College Savings Credit Card, issued by MBNA, appears to be terminated as I am not able to find any active link to the card. On the other hand, the UPromise MasterCard from Citi is still available, which basically gives 1% back for every eligible purchase and 2% cashback for filling up your car at Exxon Mobil station. In addition, there are additional 10% savings when you buy items with “UPromise” sign at grocery and drug stores.
How cashbacks are credited
The cashback you earned either by shopping online or off-line through these programs won’t be available immediately. In fact, there are some lengthy delays before you notice the credits on your statement and that delay could be as long as two months. For example, I made a purchase on July 28, 2006 at Buy.com through BabyMint and the cashback was credited to my account on September 22, 2006. At UPromise, rebates for a transaction on January 31, 2007 was posted on March 6, 2007. However, at UPromise, a transaction made through the network shows up immediately with a “pending” status.
How to save for college tuition
What I like the most about these programs is that the cashback I earned can be automatically invested in a college savings account that’s linked to my UPromise or BabyMint account.
Every quarter, the cashback in the UPromise account can be transferred to either a UPromise College Fund managed by Vanguard or a state-sponsored 529 plan (Arkansas, New York, Iowa, Missouri, North Carolina, North Dakota, Pennsylvania, and Colorado). Similarly, rebates of $25 or more in a BabyMint account can be invested in any 529 plan or a Coverdell educational savings account linked to the account on a monthly basis. As you can see, BabyMint offers more investment choices (any 529 plan) with more flexible schedule (monthly). BabyMint, together with SAGE Scholars, also has a Tuition Rewards program that allows members to double their savings by redeeming the cashbacks as tuition credits at over 175 colleges and universities
In addition, cashbacks can also be used to pay off outstanding student loans.
How to save more
BabyMint has a referral programs that let members to save more by spreading the word. At BabyMint, every referral will receive 5 BabyMint Bucks when joining and after they accumulate at least $25 in their BabyMint account, you will receive 5 BabyMint Bucks as well. At UPromise, members can invite friends and family to join the program and allocate a portion of their cashbacks to your children’s savings account.
While both BabyMint and UPromise offer rebates when shopping through their member merchants, we should always look for the best price instead of having how much rebates we can earn as the first priority. After all, we don’t want to shop just for the sake of getting the cashbacks. Also, saving and investing for future college is a long-term project, and as any long-term investment plan, we should look beyond the returns to find the right plan. Other factors, mainly fees, are also critical in selecting a 529 plan (check out Morningstar’s best and worst 529 plans). It’s nice and convenient that BabyMint and UPromise allow us to transfer cashbacks to a linked college savings account, but that shouldn’t be the only criterion.
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