This is an in-depth review of the Upromise Mastercard. See if this card is right for you and your family.
The United States is in the midst of a student loan crisis. The average graduate leaves college with a debt load of $30,301 according to the latest data by the National Center for Education Statistics.
As such, it’s more important than ever for parents to include college savings in their family’s financial plan.
The best way to do that is through a 529 plan because it offers tax-free growth, and some states offer tax deductions and credits on contributions.
While saving in a 529 plan isn’t easy when you have other financial obligations and goals, the new Upromise Mastercard makes it much easier.
About the Upromise Mastercard
Credit card rewards are often viewed as something to take advantage of now. But with the Upromise Mastercard by Barclays, it’s more lucrative to use your cashback to plan for the future.
Upromise Mastercard Rewards program
The card’s rewards rate isn’t great compared with other top cashback credit cards.
We developed that 15% bonus to encourage families to save for college because we know from our partners at Upromise that that’s the best way they can do it.”
But the way the card’s rewards program is structured can make it worth considering, especially if education savings is one of your primary financial goals.
Specifically, the card offers 1.25% cash back on every purchase you make.
But if you link your Upromise Program account to an eligible 529 plan, you’ll get an extra 15%, giving you an effective rewards rate of 1.4375%.
All the cash back you earn with the card will automatically be transferred to your Upromise Program account, where you can invest it in your 529 plan.
“We developed that 15% bonus to encourage families to save for college,” says Mike Bolmer, vice president of travel, entertainment and affinity partnerships at Barclays, “because we know from our partners at Upromise that that’s the best way they can do it.”
Opt-in to get more cash back
To further encourage cardholders to save for their children’s future, the Upromise Mastercard has a round-up feature.
This means that if you opt-in, every time you use the card, it will round up the transaction to the nearest dollar and include the difference in the cash back transferred to your Upromise Program account.
You’ll even get the 15% bonus on the rounded-up cash.
“The round-up piece is an easy way to allow families to enhance their savings,” says Bolmer. “They don’t have to think about it. They can even set a maximum for what their monthly round-up savings will be.”
So let’s say you spend $2,500 on your credit card and average $40 in roundups each month, and you get the 15% bonus. Over a year, you’ll have $911.25 to set aside in a 529 plan that you didn’t need to plan for.
And if you continue to use the card each year and invest your 529 plan funds, you’ll see incredible growth by the time your child will be a freshman in college.
Upromise Mastercard — Other benefits
In addition to providing parents with an easy way to save more for their kids’ education, the Upromise Mastercard has a few other tricks up its sleeve.
For starters, you’ll get an introductory 0% APR promotion on balance transfers when you first get the card. This gives you more than a year to pay off high-interest credit card debt.
Just keep in mind that there’s a balance transfer fee. There’s no foreign transaction fee, though.
So, you can take the card with you when you travel abroad and save 3%, which is the typical foreign transaction fee on most credit cards.
And finally, you won’t pay an annual fee.
Is the Upromise Mastercard right for you?
The Upromise Mastercard doesn’t have a great rewards rate and its lack of sign-up bonus could be a deal-breaker for some. After all, you can invest your cashback earned with other great cashback credit cards in your 529 plan, too.
But what makes the Upromise Mastercard so special is that it does the work for you. Just link your 529 plan to your Upromise Program account and set up the round-up feature.
By doing so, you won’t have to figure out where to find the money to earmark for education savings.
Also, the fact that the card is light on fees means you don’t have to wonder if you’re getting enough value out of the card to ensure it’s worth it.
And as long as you pay off your balance in full each month, you don’t have to pay the card’s interest rate.
“This credit card is best for young families who have an interest in saving for their family’s future,” says Bolmer.
But it can also be beneficial for a grandparent or other family member who wants to help their grandkids or nieces and nephews save for college.
Upromise Mastercard — The bottom line
If you’re looking to maximize your rewards, this card might not be for you. But if you want a solid credit card that can help you put your kids through college, it might be worth having in your wallet.
While student loans can help, you may not want your kids to go through what your generation is going through right now.
Ben Luthi is a personal finance writer and a credit cards expert who loves helping consumers and business owners make better financial decisions. His work has been featured in Time, MarketWatch, Yahoo! Finance, U.S. News & World Report, CNBC, Success Magazine, USA Today, The Huffington Post and many more.