We recently talked about a credit card that helps you pay your rent, but what about a card that helps you pay your student loan? There’s a new card that will do just that—offering 2% cash back on purchases which can be applied to an array of student loan servicers. Here’s a look at whether it’s a good card for you.
‘Student Loans Cashback’ can be a good option if you’re laser-focused on student debt
The Laurel Road Student Loan Cashback Card (it’s a mouthful) stands out from other cashback and travel rewards cards by helping you stay exclusively focused on paying off your student loan. It’s not the first card that does that (Sally Mae’s line of cards is one example), but it certainly is the most flexible, as Laurel Road claims that you can pay off loans for 95% of student loan lenders (a list can be found in an answer to one of their FAQs here). Here’s a look at the key features and benefits for the card:
- 2% student loan cashback with eligible servicers or 1% cashback statement credit
- A $500 student loan cashback welcome bonus or a $250 statement credit after spending $5,000 within 90 days of opening a new card
- No interest for the first year
- $0 annual fee
- 0% foreign transaction fees
Is a student loan cashback card worth it?
Yes, but only if you’re planning to use this card to pay off a student loan. The 2% that goes back against your student loan is a competitive rate, but the 1% cashback as a statement credit isn’t all that great. And the welcome bonus is pretty decent for a cashback card, although the spending goal of $5,000 is a relatively high compared to other cashback cards.
Plus, the zero-interest offer for 12 months (if you transfer your balance from another card) is a perfect option if you’re looking to simplify your credit card habits and need a fresh start. After that, the variable APR jumps to 13.99% to 22.99%, depending on your creditworthiness.
There are better cashback cards out there, but this card works well if you’re committed to paying down your student loan as quickly as you can. The added benefit is that you won’t get bogged down by rewards that can inadvertently lead to more spending. For example, you might get a free hotel or flight from a travel rewards card, but you’ll probably end up spending more overall on food, shopping, or activities when on vacation. This card, on the other hand, is comparatively spartan with its rewards—but that’s the point, it’s meant to be simple.