Upromise Investments: "not in the 529 plans, please!"

I just got off the phone with Bill in the compliance department at Upromise Investments. Upromise Investments, as you have no reason to know, is an investment management and record-keeping firm that's used by various states to either manage 529 College Savings Plans directly, or provide record-keeping and payment processing services to investment management firms (did I get that more or less right, Bill?).

We had a long, interesting conversation, the highlights of which I'll try to capture.

Upromise Investments is aggressively engaged with Evolve Money and Evolve's payments processor

I didn't really understand this part of the conversation, but I think Bill and his colleagues decided that the easiest way to shut down so-called "inappropriate use" of 529 plans would be to cut off contributions to them. Consequently, I believe they are seeking to remove the 529 plans they are connected with from Evolve Money's list of payees, or attempting to stop Evolve's payments processor from handling those transactions (which would have the same effect).

Upromise Investments is handling this relatively calmly - so far

If you've opened a 529 plan in the last few days in a state where you're not a resident and where Upromise Investments manages the account, and if you've made a contribution through Evolve Money, Upromise Investments knows about you. If you're using the 529 plan to save for you or your relative's education, you still have nothing to worry about; that's what the plans are for (although see above: you may no longer be able to contribute through Evolve Money).

However, if you are planning on immediately making a non-qualified withdrawal, expect a call from Bill, who may very politely tell you he's closing your account and sending you your account balance.

Bill made very clear that this was a temporary courtesy he was extending to us, and that if undesirable behavior continued he would make the process much more unpleasant for future users.

Upromise Investments manages a lot of 529 plans

I've updated the 529 Reference Project with all the information Bill provided me on plans that Upromise Investments manages. I had already put some of this information on the Master List, which I had pulled from this 2011 map Upromise Investments has on their college savings website, 529.com.

Consider your own state's plan first

Bill helpfully suggested that most people would be best served by signing up for their own state's plan, in order to capture any relevant tax benefits their state offers.

The College Savings Plan Network has been informed

Upromise Investments participates in an umbrella organization called the College Savings Plan Network. Bill has made his contacts there aware of the situation. The "communications," he said, "are well underway."

Final Thoughts From Bill

Before I got off the phone with Bill, I asked him if he had any final thoughts he'd like to share with my readers. Here's what he said:

"Not in the 529 plans, please! We have state mandates to make sure they’re used appropriately which we vigorously enforce to the best of our abilities."

And now you know everything I know.

Update: no PayPal cash back for Evolve Money payments

[update 2/6/14: please see my post on Upromise Investments]

While investigating Evolve Money, one of the most lucrative possibilities I considered was that payments made using PayPal Business Debit MasterCards would earn 1% cash back. As I wrote in my initial story:

"I can confirm that the PayPal Business Debit MasterCard does work for bill payments, and these transactions are processed as signature purchases which should earn 1% cash back. My regular readers know what that means: you can load your PayPal account using PayPal My Cash cards purchased with a rewards-earning credit card, then earn 1% cash back liquidating those funds paying bills you wouldn't ordinarily be able to pay with a credit card. You'll be earning your credit card rewards – and a small profit – for transactions that wouldn't otherwise earn rewards."

Unfortunately, despite the fact that the payments are processed as signature transactions — and even have the "$" symbol next to them in my transaction history (only visible using the "old" PayPal layout) — when my cash back for January posted today I did not earn 1% cash back on Evolve Money payments. This is still a great, free way to get money out of your PayPal account, but the cash back angle did not work out. In fact on my Business Debit Card summary page, the Evolve transactions are simply not included as either "eligible" or "ineligible" transactions; the totals shown represent all my purchases using the card except those.

This doesn't bode particularly well for payments made using other rewards debit cards, although that also may vary on a case-by-case basis. If you've experimented with other rewards debit cards, leave your results in the comments.

Announcement: the 529 Reference Project

[update 2/6/14: please see my post on Upromise Investments]

I'm very excited to announce that I'm going to be trying something brand new here on the site. After I wrote up the 3 craziest ways to manufacture spend using Evolve Money, I received a lot of feedback, and the most promising of the 3 methods seems to be the third: making contributions to a 529 college savings plan, then withdrawing the contribution to your bank account. The problem is that 529 college savings plans are sponsored by the states, and there are a lot of states. Each plan is slightly different, and it would be simply overwhelming for me to attempt to catalog all 50+ plans.

That's where you come in. I have readers all over the country, some of whom have children, some of whom are using their state's 529 plan to save for their children's education. That means they have information that other readers can use!

If you look up in the top right corner on any page of the website, you'll see a new tab: the 529 Reference Project. There will only ever be one post there, the Master List of State-Sponsored 529 College Savings Plans. In that post, you will always be able to find all the information submitted so far about each state's 529 plan.

Even more importantly, in the comments to that post you can leave information about any plan you have information about. Among other things, you can leave the following information:

• Is the plan listed as a payee in Evolve Money?
• Does the plan allow non-qualified withdrawals to be made directly to a bank account?

I've added the relevant information for three plans already; the rest are up to you. So be a part of something great: leave the information for your state in the comments to that post.

Update: Evolve Money payments posting

[update 2/6/14: please see my post on Upromise Investments]

I'm happy to report that my first wave of Evolve Money payments made at the end of last week have all posted successfully to my online accounts. I added all the legitimate payees I could think of, as well as a few experiments along the lines of my "3 Insane Ways." Here are my results:

Bills

I was successfully able to make a payment to my Blue Cross Blue Shield dental insurance policy. Evolve Money promised to deliver it on January 21, but it apparently got there a little early:

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I was also able to make an early payment to my gas provider, National Grid. Since same-day payments are free until February 16, I chose the "express" version of the payee – this is a different payee in the search function. Evolve Money claims to have delivered the payment on January 20 (a federal holiday), while National Grid posted the payment on the 21st:

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Student Loans

I also made a student loan payment to "Federal Student Loans – All Servicers." Evolve Money claims to have delivered the money on January 21, and sure enough, there it is right on time:

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529 College Savings Plans

Finally, I made 2 contributions to 529 College Savings Plans: one to my "real" 529 plan, with the Utah Educational Savings Program, and the second to a new account created with USAA. Both contributions posted right on schedule.

I haven't yet been able to determine whether the USAA plan will allow me to make electronic withdrawals from the 529 savings account like my UESP account does. It may take some trial and error to find an account that is compatible with Evolve Money and allows easy online withdrawals.

Preliminary Thoughts

In short, my first salvo of Evolve Money payments was an unqualified success. I also learned a few useful tips to make sure payments are processed correctly:

• For payees with multiple addresses, use the billing address on your bill. This may seem like a no-brainer, but it was relevant in the cases of my student loan and utility bill payments. I was given a number of options for which address to send the payments to, and I selected the payee with the same mailing address, even though the biller name did not match. In the case of my student loans, my loan servicer is "FedLoan Servicing" They apparently share an address with another student loan servicer, and I made my (successful) payment to that servicer instead. Even though the names didn't match, the addresses did.
• For all the payees I used, I was able to add the bill successfully by deleting any dashes or spaces in my account numbers.

My remaining unanswered question is whether the transactions I funded using my PayPal Business Debit MasterCard will earn 1% cash back. I'm extremely confident they will, since they are processed as signature transactions, but PayPal has not yet updated my pending cash back so I can't say so with certainty yet. Whether or not that 1% cash back option exists will determine what is the best funding source for these payments: PayPal, reloadable prepaid debit cards like Visa Buxx or MyVanilla Debit cards, or one-off gift cards purchased at drug stores, grocery stores, gas stations, or office supply stores with cards that bonus purchases at those merchants.

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Connecting the dots: Chase Ink Visas back on top

[update 2/6/14: please see my post on Upromise Investments]

I mentioned a few months ago that I was planning to finally get a Chase Ink Bold card, which would allow me to earn bonus points at local convenience store locations categorized by Visa as gas stations.

Ultimately that plan was short-circuited in my impromptu January application cycle, when I jumped on a 100,000 Avios offer from the Chase British Airways Visa card.

I've had a tortured relationship with the Chase Ink Bold card: in principle, its earning rate at gas stations (2 Ultimate Rewards points per dollar) and office supply stores (5 Ultimate Rewards points per dollar) should make it one of the most lucrative cards available. In practice, every time I think I have a new source of gas station reload cards and gift cards, it's slammed shut by a register re-coding or employee re-training.

Meanwhile, while $200 Visa gift cards from office supply stores, with an activation fee of $6.95, allow you to buy Ultimate Rewards points at a cost of 0.67 cents each, liquidating those cards has traditionally required either using up valuable Bluebird reload space or buying inefficiently small money orders and bill payments.

Finally, since the United devaluation it's become increasing difficult to value Ultimate Rewards points at the 1.89 cents necessary to justify buying them for 0.67 cents each when you can buy Barclaycard Arrival miles, worth 1.11 cents, for just 0.39 cents each. (Explanation: 1.89 / 1.11 = 0.67 / 0.39).

Events have conspired to change that calculation, and again make the Chase Ink Bold Visa one of the most unimaginably lucrative cards on the market today.

Visa Savings Edge

Visa Savings Edge is a program that allows you to earn cash back in the form of statement credits on your account whenever you make eligible purchases at participating merchants. As Frequent Miler pointed out yesterday, Staples is one of those participating merchants. The offer reads:

Save 1% when you make a qualifying purchase of $200 or more with your enrolled Visa Business card in store or on staples.com. Save on thousands of products for your small business at Staples. From coffee to cleaning supplies and technology to business services, you’ll find everything you need to keep your business running. Now get 1% back via statement credit on all purchases at Staples® when you use your enrolled Visa® Business Card.

That means a $200 Visa gift card, rather than costing $6.95, will cost just $4.88, bringing the break-even value of Ultimate Rewards points down to 1.35.

Plink

Of course, as I mentioned yesterday in my trip report, Staples also participates in Plink, allowing you to earn $3 in Amazon credit every time you spend $60 or more at Staples. If you consider Amazon credit "as good as cash," you'll end up paying just $1.88 each time you buy a $200 Visa gift card – just 0.18 cents per Ultimate Reward point (up to 10 purchases per 30 days, per the terms of the Plink offer).

Liquidate Using Evolve Money

Finally, the last concern above, that liquidating $200 Visa gift cards is awkward, inefficient, and impractical, has been put to rest by the vast liquidation capacity of Evolve Money. If you take advantage only of the most lucrative version of this deal, combining both Visa Savings Edge and Plink, you'll have just $2,000 in gift cards to liquidate every 30 days. Since Evolve Money has plenty of legitimate payees, like utilities, insurance companies, phone companies, etc., $2,000 seems like an eminently reasonable amount to push through each month – especially when buying those gift cards is this unbelievably lucrative.

Honorable Mention: Club Carlson Business Rewards Visa

While the card itself doesn't bonus office supply store purchases, the Club Carlson Business Rewards Visa does earn 5 Club Carlson Gold Points on all purchases, which I've argued can in some cases be worth up to 1 cent each. The card can likewise be registered through Visa Savings Edge and through Plink, allowing you to pay the same 0.18 cents per point as with the Chase Ink cards.

A gift card deal too good to resist

[update 2/6/14: please see my post on Upromise Investments]

Gift card churning seems like a lot of fun for those who enjoy it. The really serious guys like Frequent Miler wait for a big opportunity to come along and then go big, turning gift cards into merchandise and then trying to liquidate the goods, generating credit card spend and – hopefully – a small profit.

Personally, I only dabble in gift cards when opportunities come along that already fit into my overall strategy. For example, I was happy to pay $7.50 for 3,500 Flexpoints last May.

Today I made an exception and strolled down to my neighborhood Staples to buy some hanging folders – and a $100 Visa gift card, which came with an activation fee of $5.95. Just to magnify the insanity, I didn't even use a card that bonuses office supply stores: I used my American Express Hilton HHonors card, which earns 3 HHonors points per dollar spent on non-bonused purchases.

American Express Offers for You

By now you've guessed where this is going: my HHonors card was targeted by Amex for the Staples "Offer for You," which reads:

Get a one-time $25 statement credit by using your enrolled Card to spend a total of $100 or more on qualifying purchases at Staples by 3/17/2014.

If you carry any American Express cards, log into your online account and see if any of them have been targeted. From the reports I've read online, most people are only receiving the offer for one of their credit cards. If you get the offer for more than one card, then use the "Multiple Browser Tabs" trick described here to register for the offer on each eligible card.

Plink

In addition to the $25 statement credit I received from American Express, I also made sure to add my Hilton HHonors card to Plink in order to earn 300 Plink points (worth $3 in Amazon credit) for spending more than $60 on my linked credit card at Staples.

Breaking: Liquidate with Evolve Money

Finally, I was excited to take advantage of this offer in order to run an experiment liquidating Visa gift cards using Evolve Money.

I'm more than happy to report that I was able to successfully add the Visa gift card to Evolve Money (after registering the gift card online), and make a bill payment to one of my utility companies.

This is extremely exciting since it effectively reduces the cost of gift card liquidation to $0. If this technique continues to work with other prepaid cards, like the One Vanilla cards sold at CVS, it will mean $28,000-$31,000 in monthly manufactured spend with no liquidation costs.

The possibilities here are truly staggering, but I'm going to refrain from any additional speculation until later this week when it becomes clearer what kinds of possibilities exist to liberate cash using Evolve Money.

3 Insane Ways to Use Evolve Money to Manufacture Spend

[update 2/6/14: please see my post on Upromise Investments]

Yesterday I broke some pretty exciting news: there's an online payment service that allows you to make bill payments – for free – using any Visa, MasterCard, or Discover debit card. I mentioned some eligible payees, one possibly lucrative use for the service, and told you folks to start experimenting.

One of the first comments on that post was from reader Alcwj, who wrote:

So... can't payoff CC = no MS

Instead of responding in the comments, I decided it would be fun to write up the 3 craziest ways I could think of to push as much spend as possible through the service (Evolve Money bill payments are limited to $1,000 per calendar day).

Cancel Student Loans

While the specific terms and conditions will vary depending on the private loan issuer, as a rule it's possible to cancel federal student loans by paying off the balance within certain time periods. If I remember correctly, the period is something like 90 days after disbursement.

So, if you or someone you know is eligible for student loans, you could have them take out the maximum possible loan, then pay off the loan using Evolve Money. Then you can use the cash from the student loan to pay off the credit card you manufactured the spend with.

Home Equity Lines of Credit

I fully confess that I'm well out of my depth here, but my understanding is that when you have a home equity line of credit, you only pay interest on the amount of money you borrow. The trick here would be to make a payment towards your HELOC, then withdraw the same amount of money the day that the payment is due to post. You won't pay any interest, and you can use the money from the HELOC to pay off the credit card you manufactured the spend with.

529 College Savings Plans

As I mentioned yesterday, Evolve Money has among its payees tons of 529 College Savings Plans. The interesting thing about these savings vehicles is that the money you contribute is taxed in the year it's earned. The account's appreciation is treated, pro rata, as earned income in any year an appreciated balance is withdrawn, unless the withdrawal is used for qualified educational expenses, in which case any appreciation is tax-free. Finally, the increased, pro rata, value of any withdrawal is subject to a 10% penalty if the withdrawal is used for non-qualified educational expenses.

However, because contributions have already been taxed, it's free to withdraw contributions as long as they have not appreciated at all. If they have, the appreciation is treated as a penalized, non-qualified withdrawal. That means you can contribute $30,000 to a 529 College Savings Plan, and as long as the account has not appreciated (you might achieve this, for example, by investing it in an FDIC-insured savings account earning little or no interest), the withdrawals will be penalty-free.

Keep in mind that I'm not a tax attorney — and I'm especially not your tax attorney. But this is my understanding of how these accounts work.

Bonus Insanity: Same-Day Payments Free Until February 16

Right on cue, Evolve Money also started a promotion today offering free same-day payments. As far as I'm concerned it's the duty of each and every reader to start experimenting with this service. Report back successes — and failures! — in the comments. I'll have a report on yesterday's test payments Tuesday or Wednesday, whenever they end up posting (or not!).

Developing: Evolve Money

[update 2/6/14: please see my post on Upromise Investments]

Hot on the heels of yesterday's exciting post on the HR Block Emerald Prepaid MasterCard, today's news is about a potentially even more lucrative product: Evolve Money. I first read about this service last night on FlyerTalk and went to bed thinking about the possibilities.

Today I looked into the service in depth and have some pretty exciting preliminary conclusions.

How Evolve Money Works

Evolve Money is a service that allows you to pay your bills online – for free – using a Visa, MasterCard, or Discover debit card, REloadit packs (available at some grocery stores), or a product called "Evolve Pay Bucks."

You can create an account to store your payees, or use the service as a guest and input your bill information each time you pay a bill.

After searching their database of payees, you select the biller you want to pay, enter your account information, then choose your payment method.

That's it. It took me a few seconds to set up an account, add my MasterCard debit card, and make a number of experimental bill payments. I'll keep my readers updated with those results.

What Payees Are Available?

There's good news and bad news on this front.

First, the bad news: as far as I can tell no bank's credit card division is listed as an eligible payee.

The good news is there are a lot of payees that are potentially lucrative. The list is incredibly long (it's free to search, so go check it out for yourself), but here are some highlights I found:

• Mortgages: Bank of America Mortgage, JP Morgan Chase Mortgage, Wells Fargo Home Mortgage, PNC Mortgage, Countrywide Home Loans, etc.;
• Student Loans: Federal Student Loans - All Servicers, Discover Private Student Loans, Citibank Loan/Private Student Loan/Line of Credit, Acs Educational Services, Great Lakes Educational Loan Services, etc.;
• Savings Accounts: Utah Educational Savings Plan, TD Ameritrade 529 College Savings Plan, Schwab 529 College Savings Plan, etc.;
• Insurance Premiums: Blue Cross Blue Shield (every state);
• Tax Payments: hundreds and hundreds of city and county revenue departments are listed.

Which Debit Cards Work?

I can confirm that the PayPal Business Debit MasterCard does work for bill payments, and these transactions are processed as signature purchases which should earn 1% cash back. My regular readers know what that means: you can load your PayPal account using PayPal My Cash cards purchased with a rewards-earning credit card, then earn 1% cash back liquidating those funds paying bills you wouldn't ordinarily be able to pay with a credit card. You'll be earning your credit card rewards – and a small profit – for transactions that wouldn't otherwise earn rewards.

If you are currently paying a mortgage or student loan using withdrawals from your bank account, take a look at the list of available payees and decide whether you can take advantage of this service instead and earn rewards on those payments.