Personal Finance > College
Shop your way to college
Two loyalty programs promise higher-education rewards for doing what we do best -- spending money.
February 5, 2003: 1:29 PM EST
By Sarah Max, CNN/Money Staff Writer

New York (CNN/Money) - Americans are often said to be better spenders than savers. Not so good for our bank accounts, but thanks to two college savings programs, Upromise and BabyMint, even spendthrifts may be able to sock some coins away for their children's education.

The details of each program are slightly different, but the idea is the same: Spend money with affiliated companies, and in exchange for your business they'll kick back a small percentage of your purchases into your college kitty.

Your spending alone probably won't put your kids through four years of school, but at the very least it may help pay for books.

(Click here to calculate how much you'll need to save for college.)


Launched in April, 2001, Upromise has teamed with thousands of companies, including, American Airlines, AT&T, General Motors and Toys "R" Us, and attracted more than 2.5 million members to its program, which is free to join.

To earn rewards, you'll want to register your credit cards with the program so that awards are automatically accrued when you use one of your cards at participating companies. Purchases of products like Huggies or Skippy Peanut Butter, for example, can be tracked through your grocery store or drug store loyalty card. Upromise also has its own rewards card, issued by Citibank, with which you'll also get 1 percent back in college money on all charges.

You can choose to let the money accrue in your Upromise account, or have rebates deposited in a participating 529 savings program.

The savings add up. If you have a newborn and invest all of your rebates in an account that returns 7 percent a year, by the time he or she is ready for college you'll have quite a bit to show for your everyday expenses. Under this scenario, charging $700 a month on Upromise's credit card and spending $400 a month on goods and services f rom participating vendors could beef up your college savings by more than $13,000.

To further expand your savings, you can ask Grandma and Grandpa, or anyone for that matter, to register with the program and link their rewards to your account.

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A similar program, BabyMint was also born in 2001 and now has nearly a million members. As with Upromise, membership is free, and you can ask friends and family members to sign up and help you earn rewards.

The list of participating companies is smaller, but online partners include the likes of Wal-Mart, Macys, Gap and Marriott. Also, in many cases the rewards are higher. For example, you earn 4 percent back when you shop at Mimi Maternity's Web site and 7 percent with Orvis online.

One nice feature unique to BabyMint, is that you can direct your rebates to most any existing investment account, be it a 529 savings plan or taxable account. You're not limited to the financial services firms that have their own arrangements with BabyMint.

(Click here to see 529 plans by state.)

But because you don't register your credit cards under this program, it may take a little more work getting your rebates unless you sign up for BabyMint's credit card, which is issued by MBNA, earns 1 percent in rebates and automatically tracks eligible purchases.

To accrue rebates with participating online retailers, you need to first go to BabyMint and visit the sites from there. To earn rebates offline, in most cases you'll need to print out coupons from the Web site and present them at the register.

Both BabyMint and Upromise say they will not share your personal information without your permission. Still, when you register for the programs pay attention to what boxes are checked and unchecked so as not to invite unwanted solicitations.

If you can spare the few minutes it takes to register with the programs, you may even want to sign up for both. When college rolls around, you'll be happy for every extra bit of college cash you can get your hands on.  Top of page

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