Laurel Road Student Loan Cashback Card review: Pay off your student loans faster by earning 2% cash back

Credit card rewards are typically available in one of two forms — cash back or points and miles — with the former option awarded as either a statement credit or by having a check mailed to you later.

But what if you could use your credit card rewards to pay off your student loans? That's the idea behind the newly debuted Laurel Road Student Loan Cashback® Card, which lets you earn 2% cash back when the rewards are funneled straight to your eligible federal or private student loan principle (and 1% cash back if you put them toward anything else).

It's an interesting concept, but does that make it the best cash-back card available? Below, Select breaks down everything you need to know about the card, how the cash-back rewards work and how to decide if it's the best cash-back option to help you pay off your student loan debt.

• Welcome bonus
• Benefits and perks
• How the cashback rewards work
• Rates and fees
• Card comparison
• Bottom line

The Laurel Road Student Loan Cashback Card offers a solid welcome bonus to help new cardholders get started, letting you earn $300 in cash-back rewards toward any eligible student loan after you spend at least $3,000 within the first 90 days of account membership. Note that you must already be working with an eligible student loan servicer to take advantage of this perk.

Not only that, but if you opt for the 2% cash-back rewards you'll earn by using the card to be directed toward paying off your eligible student loans (see the list of loan servicer partners linked above), you'll end up with $360 in total cash back upon meeting the minimum spending requirement, which represents a respectable 12% return on your spending.

In addition to the unique cash-back rewards geared toward helping you pay off your student loans, the card also offers the following benefits:

• If you transfer your existing credit card debt to the card within the first 60 days of account opening, you will receive a 0% introductory APR for 12 months (after, 16.24% – 25.24% variable APR)
• The ability to earn 1% cash back rewards toward anything else (2% cash back if you're putting it toward your eligible student loan principle, more on that above)
• No foreign transaction fees for using the card abroad
• Extended warranty and purchase protection
• Access to Mastercard Priceless® Experiences

The best thing about this card is it gives you the ability to have your cash-back rewards put directly toward your student loan balance. That said, your student loans must already be set up with one of the eligible servicers listed here, such as Mohela – U.S. Department of Education, Earnest and SoFi.

If your loan servicer is on the list — according to the card's website, 95% of them are — the process is simple. Once you pay your monthly statement and elect for your 2% cash-back rewards to go toward an eligible balance, Laurel Road will issue the payment to your servicer within 10 business days.

While 2% cash back may not seem like much, it can definitely add up over time. For example, if you were to spend an average of $1,000 per month on your credit card and pay the statement balance in full each month, that would yield an extra $20 toward your student loans. If you did this for a year, that would net you $240 more toward paying off your student loan debt.

If, on the other hand, you were to choose the statement credit option, you would only earn 1% cash back — at that rate, you're probably better off choosing a different cash-back credit card.

The card has no annual fee. However, it does have a 16.24% to 25.24% APR for purchases.

There are no foreign transaction fees, so you can use the card outside the U.S. without incurring any additional fees.

This is the only credit card on the market that allows you to direct your 2% cash-back rewards straight toward your applicable student loans. However, there are plenty of other no-annual fee options out there that let you earn cash back so you can pay down your student loans or any other type of debt.

Laurel Road Student Loan Cashback Card vs. Citi® Double Cash Card

The Citi® Double Cash Card is a solid cash-back credit card, offering the same maximum rewards output as the Laurel Road Student Loan Cashback Card.

With the Citi card, you'll earn 2% cash back — that's 1% for all eligible purchases plus an additional 1% once you pay your credit card bill. The major difference here is you can receive these cash-back rewards as a statement credit, direct deposit or check, whereas the Laurel Road card will only let you earn 1% cash back for anything other than student loan payments.

Additionally, the Laurel Road card offers a $300 cash-back welcome bonus to go toward paying your student loans, while the Citi Double Cash Card does not have a bonus.

While the Citi card gives you more options for spending your cash-back rewards, it essentially offers the same maximum cash-back result as the Laurel Road card. That said, if you simply want to pay your rewards directly toward your student loan debt, the Laurel Road card will get you the same result with less hassle and fewer extra steps.

Laurel Road Student Loan Cashback Card vs. Capital One SavorOne Cash Rewards Credit Card

The Capital One SavorOne Cash Rewards Credit Card is another great cash-back option — especially for foodies — as it offers the following benefits:

• 3% cash back for dining, entertainment, popular streaming services and spending at grocery stores (excluding superstores like Walmart®, Target® and other superstores).
• 1% cash back for all other purchases. (See rates and fees).

If you tend to make the majority of your purchases within the 3% cash-back categories listed above, it may be more beneficial for you to go with the Capital One card and use the cash-back rewards to pay your student loans or reach other financial goals.

Note, however, that this card only has a one-time $200 cash welcome bonus — after new cardholders spend $500 within the first three months of card membership — whereas the Laurel Road card offers a $300 welcome bonus designed to go straight toward your eligible student loan balance. If you spend regularly enough within the bonus categories, you could surpass the welcome bonus difference, making the Capital One card the better option of the two.

The Laurel Road Student Loan Cashback® Card is a great choice for consumers whose student loans are being processed through one of Laurel Road's eligible lender partners. By using this card, the 2% cash back you'll earn from paying for your everyday expenses can help you get out of student debt.

However, if you desire more flexibility in how you redeem your cash back, you may be better off getting a different no-annual-fee cash-back credit.

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