Bank (Finally) Offers a Better Way to Pay Down Student Debt
It’s hard to get millennials to open bank accounts. What do they need bank accounts for with all the great prepaid cards and other options out there?
Boston-based First Trade Union Bank, already known for working with LevelUp on its payments app, annunced today that it is partnering with SmarterBucks to produce a debit card that helps pay down student loans.
That’s a rewards program millennials can get behind. Some 37 million Americans own a piece of the $1.4 trillion in outstanding student loan debt, which makes it a large addressable market for SmarterBucks/First Trade.
The First Trade-SmarterBucks debit card operates much like a cash-back rewards program. It takes 1% of purchases and applies it to the cardholder’s student debt, as assigned in the SmarterBucks system. “Even just an extra $30 a month can save $4,000 [a year],” a bank representative said. This can help pay off a loan years earlier than forecast.
SmarterBucks was launched by SimpleTuition, Inc., a student loan repayment service, in 2012. The service offers a number of ways to pay down student loan debt, such as taking surveys and buying certain items in its marketplace. Its current userbase is 140,000 members. First Trade Union Bank has $700 million in assets.
