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Over the past five months, new entrants to the rewards credit card landscape have entered the arena with a different value proposition: Instead of racking up points and miles to spend, your card should put you on the line. the way to saving and growing your wealth.
New names like BlockFi, Gemini, and Unifimoney have revealed products that earn rewards from cryptocurrency, gold, and stocks. Now the new Laurel Road Student Loan Cashback Credit Card is part of the age of credit card disruption with a slightly different premise: Paying off debt is just as rewarding as earning points or taking a stake in an asset that may appreciate.
Learn more: The Best Credit Cards for Turning Rewards of Daily Spending into Investments
If you are not familiar with Laurel Road, it is a loan division of KeyBank and it is starting to expand into other areas to meet standard banking needs.
Laurel Road Student Loan Repayment Card Details
the Laurel Road Student Loan Discount Card has a simple structure:
- No annual fee
- No foreign transaction fees
- No interest for the first year
- $ 500 student loan cash back bonus if you spend $ 5,000 in the first 90 days
- 2% cash back to use on your student loan payments
- 1% cash back for all other redemptions
Paying off your student loans with the rewards from your card is very easy. The platform integrates seamlessly with 95% of student loan providers – the list is here in the FAQ section, so you can make sure your vendor is included – and you can choose the amount of money to grab that 2x rewards rate.
While there are other offers in the banking world that allow you to pay off part of your student loans, most of them are limited to one provider, so the ability to choose from as many different lenders. is a differentiator.
“The way the cardholder should view this is an additional tool to help them reduce their student loan debt, not a tool to help them pay their minimum payment each month,” Kaitlin Walsh-Epstein, vice president of marketing and growth at Laurel Road, told Insider. “It encourages the behavior of paying above and beyond their automatic minimum.”
Comparison: Laurel Road Student Loan Cashback Card vs Other Cash Back Credit Cards
Reward smart behavior rather than spending habits
Ultimately, this behavioral component is the backbone of this map. If you are looking for a new payment option for your wallet, you can find many attractive credit cards that will earn you over 2% in certain spending categories – 5x while traveling, 3x at drugstores, 2x at restaurants, etc. at. Take a look at one of the best credit card deals around today and you’ll find payouts that at first glance can seem just as, if not more, attractive than a 2% stock.
Read more: The best cash back credit cards of 2021
However, if you’re swimming in student loan debt, an incentive to spend on travel this summer or eat out tomorrow night encourages behavior that won’t help you in the long run. Walsh-Epstein says the card was designed with “the understanding that most of our traditional members have a top priority in paying off their student debt.”
This priority makes a lot of sense. According to Federal Reserve data, the country currently has a staggering nearly $ 1.6 trillion in student loans. In fact, the average borrower graduates from college with approximately $ 29,000 in debt to their name.
With these numbers, every penny makes a significant difference to your future. Walsh-Epstein says many of the typical Laurel Road borrowers are medical graduates with debt that climbs into the six-figure range.
“If you think of a doctor or a dentist with a debt of $ 200,000,” she says, “that’s absolutely insane”.
“So many credit card programs are about miles or points,” adds Walsh-Epstein, “but we really wanted to design a more ambitious product that rewards people based on their financial goals.”
In the traditional reward world, there is nothing more “ambitious” than cashing in a chunk of points to sit first class on the way to anywhere, but Walsh-Epstein’s perspective has makes sense: if you’re sitting in a trainer with just a few more months until your student loan balance hits zero (or even if you’re sitting at home), you’re going to feel pretty good.
Read more: The beauty of cash back credit cards is that you can use your rewards for just about anything – here’s how 4 people used their cash back to pay off their student loans
If you are currently paying off your student loans, a convenient way to dedicate your rewards to those payments is great. But what about the long term? If you’ve paid off your college debt, this isn’t the card to use: 1% cash back isn’t anything special. However, it appears there are plans to position this card to grow with cardholders.
“This is our first credit card that we offer to our members,” says Walsh-Epstein. “What’s the next step? We are constantly looking to evolve our products according to the needs of our members.”
David McMillin has written on credit cards, mortgages, banking, taxes and travel for the past 10 years. Its goal is simple: to help readers understand how to minimize fees and maximize rewards.