About the Sallie Mae Visa Signature Card
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The SLM Corporation is usually known by the more delightful name, Sallie Mae, which is derived from its original name, the Student Loan Marketing Association. SLM was created in 1972 as a government sponsored enterprise, but it was ultimately privatized by 2004. Today it offers a range of banking and insurance products in addition to student loans. Sallie Mae also has a Visa Signature credit card offer with a surprisingly competitive rate of cash back rewards.
How This Card Works
Cardholders will receive two points per dollar spent on most purchases, with no limit or expiration date. Cardmembers can redeem their points for cash back, statement credits, or merchandise. The value of each point redeemed for cash back or statement credits depends on the quantity of points redeemed at one time. For example, redeeming 2,500 points will earn cardholders a rebate of $16.25, or .65 cents per point. 10,000 points can be redeemed for .85 cents each, or 25,000 points can be redeemed for one cent each. Therefore, the most that customers can expect to earn is 2% cash back on all of their purchases, but only after spending at least $12,500 before redeeming.
New cardholders will receive 10,000 points, worth as much as $100, after spending $500 within the first 90 days of opening an account. Sallie Mae also offers a 0% promotional balance transfer offer that is valid for 12 months, although there is a 5% fee on balance transfer offers. The Standard APR for this card is equal to the prime rate plus 10.74%, 12.74%, or 14.74%, depending on the applicant’s credit worthiness. There is no annual fee for this card, but there is a foreign transaction fee of 3%.
By offering cash back rates of up to 2% on all purchases, with no annual fee, this card competes well against other market leading cash back credit card reward products such as the Fidelity Rewards cards that also offer 2% cash back on all purchases.
The sliding scale of cash back rates will not be much of a concern to those who will use this card to spend tens of thousands of dollars a year. However, those with more modest spending needs will find that they will either be redeeming their cash back less frequently, or will be receiving less than 2% cash back. Also, the fact that Sallie Mae uses a point system rather than more simple cash back terms implies that they could change the rate of exchange between points and cash at some later date, and retroactively reduce the cash back expected by cardholders who have already earned thousands of points. For example, these kind of point devaluations are common in travel industry loyalty programs. Finally, the high balance transfer fee and foreign transaction fees make this a poor card for those who need to transfer a balance or those who travel internationally.
Who This Card Is For
This is a great card for those who have no interest in travel rewards and prefer cash back. Unfortunately, this card is only best for those who will spend at least $20,000 a year so that they can frequently redeem points at the maximum rate. Sallie Mae has come a long way since the days when it only offered student loans, and this card seems to hint at its competitive future in the credit card industry.