Sallie Mae Ignite

While there are definitely credit cards with higher cash-back rates on the market, the top rewards cards are mostly for consumers with good or excellent credit profiles. The Sallie Mae Ignite, on the other hand, was created specifically for students and young adults who have yet to establish a credit history but don’t want to miss out on the world of rewards. Better still, those who can responsibly support a credit card will get a bigger return. If you prove yourself with six straight months of on-time payments, Sallie Mae will increase the cash-back rate by 25%. 

(Sallie Mae wouldn’t tell us what credit score an applicant would need to qualify, but the company did explain that several factors go into its approval decisions—including ability to repay.)

• Bigger rewards for responsible credit use: This card’s rewards-earnings rate jumps from 1% to 1.25% after you’re on time with six consecutive monthly payments. This might be the motivation you need to learn good credit habits while you maximize rewards. Plus, as student cards go, 1.25% cash back isn’t half bad. Other cards may have higher rates, but only for a limited time or on certain spending categories.
• Credit building with no annual fee and no deposit: Many people with limited credit histories turn to secured credit cards to build credit. But those require an upfront security deposit to get started, and some charge an annual fee too. This credit card doesn’t burden you with either one.
• Introductory interest-free period on purchases and balance transfers: The introductory APR of 0% applies to both purchases and balance transfers, which is unusual for a student card. And though it’s brief—just six months—it might help new cardholders meet the on-time payments requirement for earning more cash back. That said, the balance transfer offer may be too short to be really helpful as a debt retirement tool. 

• Limited redemption options: Rewards can only be redeemed for statement credits or electronic deposits into a checking or savings account, and not until your rewards balance reaches at least $25. By comparison, some credit cards for students and even some secured cards let you cash in rewards at any point, and offer gift cards, merchandise, and more. 

The Sallie Mae Ignite card lets you earn 1% cash back on every dollar you spend, with no limits. You’ll get 25% more (for a total of 1.25% back) once you’ve made at least six consecutive on-time monthly payments on your card.

To be sure, 1% or even 1.25% is by no means the highest cash-back rate available. Other cards offer better—but they also often require a good or excellent credit score. Nevertheless, with this card, if your annual credit card spending is $12,000, and you clear the on-time payment hurdle in your first six months, you’ll earn $135 in cash back in your first year and $150 every year thereafter (assuming you spend $1,000 each month and maintain that level of spending). 

The Sallie Mae Ignite card lets you redeem rewards in two ways—as a credit on your card statement or as a deposit into a checking or savings account. It’s limiting, but also simple. Just keep in mind you’ll need to have accrued at least $25 in rewards before you can redeem. 

Not only will paying your bill on time help you grab the higher rate of rewards, but it will put you on strong footing as you make your way into the world of credit. Only use your credit card for purchases you can afford to pay off monthly, and never be late with your payments, and you may see your credit score improve over time. In fact, you’ll know for sure, since Sallie Mae provides Ignite cardholders with their FICO scores for free at any time.

If you have balances on other credit card accounts, the six months of 0% interest on balance transfers can help you pay off that debt sooner, though six months is not a long time. Just remember if you take this option, you’ll pay a fee of 3% of the balance transferred. Yes, interest-free promotions can help if you carry a balance from one month to the next, but try not to make this a habit. 

The Sallie Mae Ignite card comes with one perk the editors of The Balance consider “excellent”:

• Cellphone insurance: Qualify for cellphone coverage against damage or theft when you pay your phone bill with your credit card. This coverage is good for up to $600 per claim, but a $50 deductible applies. Coverage is good for up to $1,000 in claims every 12 months. Note that this coverage is secondary to any other coverage you may have. 

Sallie Mae offers a helpful mobile app that lets you pay bills, monitor your spending, and dispute fraudulent transactions. Cardholders will also receive their FICO score for free at any time, which they can check using their online account management page or the mobile app. Unfortunately, if you want to reach customer service by phone, you’ll have to do it Monday through Friday during select hours.

The Sallie Mae mobile app lets you temporarily pause or disable your card in the event it’s lost or stolen. You can also use the app to set up customized alerts. Other security features are standard for the industry.

The fees on this card are consistent with industry standards. One to be aware of is the foreign transaction fee, which tacks on 3% to each purchase you make overseas.