Student loan lender Laurel Road is now offering a credit card designed specifically for student loan borrowers.
My Review: The Laurel Road Card is a surprisingly decent option for student loan borrowers. Previous student loan focused credit cards were lousy, but this one could be helpful for some borrowers. However, traditional cashback cards are still the preferred option for many borrowers.
The highlight of the Laurel Road card is the 2% cashback that can be used with the majority of student loan lenders and servicers.
Laurel Road Student Loan Cashback Credit Card Basics
The Laurel Road card is a straightforward cashback credit card. Cardholders get 2% back on all purchases that can be redeemed towards student loans with most lenders. Those that wish to redeem their rewards as a statement credit only get 1% back.
The card has no annual fee or foreign transaction fees. The Laurel Road card is on the Mastercard network, and applicants will need good to excellent credit to get approved. As a World Mastercard, the card includes ID Theft Protection, Extended Warranty Coverage, and Purchase Assurance.
Borrowers who don’t pay their balance in full each month are charged an interest rate of 13.99% to 22.99% APR. Like most other rewards credit cards, this card should only be used by those who intend not to carry a balance.
Signup Bonus and Incentives
This newer card comes with a decent signup bonus for new customers.
Laurel Road is offering $500 towards any student loan for customers who spend $5,000 or more within the first 90 days. If you opt to receive a statement credit instead, the bonus drops to $250.
Laurel Road also offers a 0% introductory APR for balance transfers made within the first 60 days of having the card. Unfortunately, if you take advantage of the 0% balance transfer, regular purchases will be charged the full interest rate unless the entire balance, including the transfer, is paid in full each month. In other words, this card only makes sense as a balance transfer card OR a reward card. Doing both at the same time will result in interest charges on new purchases.
Who Benefits from the Laurel Road Student Loan Cashback Card?
In the world of cashback credit cards, 2% is on the higher end, but most consumers can qualify for a 2% card. For example, the Citi Double Cash offers 2% back and has no annual fee.
The Laurel Road card is ideal for someone who wants to pay down their student loans but finds themselves using credit card rewards for impulse purchases. For many consumers, a credit card reward is a bonus or “free money,” so it is often easy to justify spending reward funds on non-essentials. The reward structure of the Laurel Road card provides a huge incentive to use the money towards student debt.
Avoiding a Mistake
If you carry a balance on your credit card or don’t have student loans, the Laurel Road card is a lousy option.
A 2% cashback reward doesn’t offset interest charges of 13.99% or more. Only use this card if you plan on paying your balance in full each month.
Additionally, it is essential to make sure your student loan servicer is on the list of eligible companies from Laurel Road. This list includes major servicers like CommonBond, Discover, Earnest, MyFedLoan, Great Lakes, MOHELA, Navient, Nelnet, PenFed, and Sallie Mae. Laurel Road claims they work with 95% of servicers, but this is a detail you want to verify before applying for the card.
Final Thoughts: Laurel Road Student Loan Cashback Credit Card Review
The card is a new product from Laurel Road, but as a refinance lender, Laurel Road has a solid reputation.
It would be nice if the card offered more features geared specifically towards student loan borrowers, but 2% cashback is a great start. As a result, the Laurel Road card is a reasonable option for student loan borrowers looking to repay their student loans aggressively.