Sallie Mae Is Launching 3 New Credit Cards, But They’re Not the Best Options for Cash Back

If you’re like me, the name Sallie Mae makes you think of college. Not the great memories of actually being in college, though. Instead, the company might make you remember making monthly payments to pay off your student loans long after graduation. Today, due to changes in government regulations, Sallie Mae doesn’t do quite as much in the student lending space — it still offers private loans, but it no longer handles federal loans for education — so the company wants to cement its place in the consumer banking industry. This week, Doctor of Credit pointed out that Sallie Mae is gearing up to launch three new credit cards. For now, interested card holders can submit their names on a waitlist to apply for one.

Each card comes with an aspirational name — Accelerate, Evolve and Ignite — that echoes some of the marketing speak that the company used in its announcement. “Our new brand experience and identity represent those new possibilities,” Donna Vieira, the company’s executive vice president and chief marketing officer, said in a statement about Sallie Mae’s new brand identity. “Our logo illustrates that we’re all individuals, each with our own story and path. Our renewed brand and purpose will build prosperous futures for our customers and unlock value for our business along the way.”

Let’s unpack these products to determine how prosperous these can actually make you as a card holder.

Earning Potential

These are all cash-back credit cards. The Ignite offers 1% unlimited cash back on all purchases, and the Accelerate and Evolve both offer 1.25% cash back. Those rates are nothing to write home — or really, write this story — about, especially when comparing with an option like the Citi® Double Cash Card.

There are additional opportunities to increase your amount of cash back. For example, Ignite card holders will receive a 25% bonus after making six consecutive on-time payments, and Accelerate card holders get a 25% bonus on any rewards used to make student loan payments. Evolve offers a slightly more compelling offer with a 25% cash back bonus from a card holder’s top two purchase categories each month.

Other credit cards are outpacing these earning possibilities, and some include enticing introductory offers. For example, I would easily pick the Chase Freedom Unlimited over these for the chance to earn 1.5% cash back on purchases.

Additional Perks

Each card’s page highlights these additional perks:

• $600 of cell phone protection if you pay your mobile bill with your card
• Access to your FICO score for free
• Mobile app notifications to manage your credit effectively

Again, these benefits don’t put Sallie Mae in the big time. While the cell phone protection offer is good, I’m seeing quite a few cards add this feature, and calling out a free FICO score as an exclusive benefit feels misleading. This feature is available everywhere. As for notifications on managing your credit, it’s always helpful to receive tips on improving your personal finances. However, these can be discovered many places, including right here at TPG.

There are no annual fees, and the APR for each card starts at a competitive 15.24%. Those are good selling points for the company’s previous customer base of students. However, if Sallie Mae is serious about capturing more of the credit card industry, the company may need to spend some more time in the classroom studying what will make it stand out from the crowd.

Featured photo by Bloomberg / Getty Images.