MasterCard Deposits College Savings Rewards
Saving for college may have gotten a little bit easier thanks to a MasterCard and Upromise initiative that lets consumers earn college savings dollars while making everyday debit card purchases.
Consumers who have MasterCard debit cards issued by four financial institutions—BancorpSouth, BankAtlantic, BECU and Provident Bank—and hold a Upromise account can take advantage of the savings opportunity. Upromise allows families to save for college education though 529 plans (similar to the way families save for retirement with 401(k) plans).
Customers automatically earn bonus college savings contributions when using their debit cards at more than 23,000 grocery and drug stores, 14,000 gas stations, 8,000 restaurants, and thousands of retail store locations. Merchants and brands include ExxonMobil, Eddie Bauer, McDonald’s, Coca-Cola and Tide. The bonus contributions, which will be equal to 1% to 3% of the price of eligible purchases, will be automatically deposited into a member’s Upromise account. Cardholders will then have the option of having the funds put into participating 529 college savings plans.
“We expect that our customers and merchants that are in the Upromise program will all experience increased levels of customer spending and loyalty,” said Patricia Preston, senior VP, MasterCard Worldwide. “Participating debit MasterCard cardholders will receive a truly meaningful reward for card usage while building a better life for their family and friends.”
MasterCard and its partners may be tapping into a growing concern for parents looking to save money for their children’s college tuition. According to a November 2005 report from economic consulting firm Sebago Associates, average college tuition increased roughly 160% from the academic years of 1977-1978 to 2004-2005, while real average family income over the same time period rose only 33%.
MasterCard and Upromise will provide the four financial institutions with marketing collateral and ongoing support for a period of one year, after which the companies will evaluate whether to expand the offering to additional customers, MasterCard said.
