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Sallie Mae ditched Bank of America and is now shacking up with Barclaycard for its Upromise credit card.
The federal student loan provider rolled out a new Upromise World MasterCard issued by Barclaycard US, the issuer announced Wednesday. The card features 5 percent cash back on retailer purchases through Upromise.com, 4 percent back on dining, 3 percent back on gas at Exxon or Mobil stations, 2 percent back on movies and 1 percent on everything else. The cash is deposited into the cardholder's Upromise account.
There is no annual fee, no cap on cash-back earnings and no spending minimums. The annual percentage rate ranges from 12.99 percent to 20.99 percent, depending on your credit.
The card offers existing Upromise members another way to accelerate college savings aside from its traditional program.
Upromise account holders receive a percentage back on purchases when they shop at participating online stores, restaurants, supermarkets and drug stores. The kickback is deposited into an Upromise account, which then can be directed to a 529 college savings plan, used to pay down student loans or used to cover college expenses. Families can sign up friends and relatives to deposit the combined earnings into one Upromise account.
Upromise earnings don't accrue interest, but are tax-free. Account holders can also transfer the funds into other savings plans.
This isn't Sallie Mae's only credit card. The student loan provider also offers the Cash Back Visa Card that allows cardholders to earn 5 percent cash back on gas, groceries and books, up to $500 on gas and groceries and $1,000 on books. All other purchases give 1 percent back. Cardholders can choose to redeem their rewards in cash or apply the rewards toward student debt.
As with any reward credit card, the rewards are only as good as the cardholder. That means you must read the fine print to know which purchases qualify to get the most rewards. More importantly, it means: Pay your balance off every month. Otherwise, the money you pay in interest will eclipse the rewards you earn.
Is a credit card a good way to save for college?
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Do you know if Sallie Mae's banking assets (high yield savings accounts, CDs, and money market accounts) were also included in this?