My fiance Becky and I sign up for a lot of credit cards and balance all of our spending between them to maximize our rewards. Most spending goes on the latest card we obtained to meet the minimum spend requirement, while specific categories like groceries, restaurants, and travel all have a respective card that we use (not to mention those cards might change on a quarterly basis!). Add that in with keeping track of annual fees and cancelling/downgrading cards, and it’s no mystery why the average person probably has no interest in credit card churning. That doesn’t mean the average person or family can’t benefit from credit cards! Today I’m going to review a simple, no annual fee card with good bonus categories for the average person. Despite it being a great card, everyone I’ve mentioned it to in person had never even heard of it! If you’re looking for a new credit card that fits well with your usual spending, the Sallie Mae Mastercard might be the card for you.
Sallie Mae Mastercard Basics
The Sallie Mae Mastercard is issued by Barclaycard through a co-branded partnership with Sallie Mae Bank. The reason most people haven’t heard of it is that it seems to be primarily targeted at people with student loans through Sallie Mae Bank. They even highlight the fact that it “allows you to use those rewards to pay down your eligible Sallie Mae student loans.” Fortunately, the cash back earned by the card can be redeemed directly as a statement credit, so it can be applied to anything purchased on the card. The primary draw of this card are the bonus categories for groceries, gas, and “bookstores” which all return 5% each up to a certain amount per month. I put “bookstores” in quotes because items shipped and sold by Amazon.com also qualify for the 5% cash back which expands that category pretty heavily. Not only does it have good bonus categories for most people’s average spending, but it also has no annual fee and the rewards never expire. To summarize:
- No Annual Fee
- Rewards Never Expire
- 5% back on grocery purchases of up to $250 per month
- 5% back on gas purchases of up to $250 per month
- 5% back on “book” purchases of up to $750 per month
- 1% back on all other purchases
Who This Card Is Great For
The Sallie Mae Mastercard is great for someone who spends a moderate amount of money on gas and groceries every month and doesn’t want to deal with juggling multiple credit cards or dealing with annual fees. While the books category including Amazon is not an advertised feature, if you do any regular shopping on Amazon.com, the 5% back will make a big difference. If you are looking for a single card to put all of your spending on, this one will beat out a standard 2% back card as long as as least 25% of your credit card spending falls in the 5% back categories.
If the $250 on gas or groceries seems too low for your family and that family happens to consists of more than one adult, there’s no reason you can’t each get a copy of the card to extend the cap to $500 and beyond!
Who Shouldn’t Get This Card
Anyone who doesn’t mind keeping track of multiple credit cards can do better than simply using this one card for all of your spending. A simple example would be using this card in conjunction with a 2% back card like the Citi Double Cash, and choosing to use the 2% back card whenever the spend doesn’t fit in any of the Sallie Mae card’s bonus categories. Sticking with no annual fee cards, using a combination of the Chase Freedom or Discover It’s rotating 5% back categories along with the Amex Blue Cash Everyday card would most likely return more cash back to your pocket.
This card also isn’t the best if you spend a really large amount of money on groceries. I would recommend the Amex Blue Cash Preferred in that case which comes with 6% back on groceries (up to $6,000 annually) among other bonus categories, but also has an annual fee of $75. Keep in mind you can buy gift cards for any number of places at the grocery store to make sure you’re maxing out the benefit.
The reason this card doesn’t make sense for me is that I don’t mind juggling a large number of different cards while frequently signing up for new ones that have large signup bonuses. As I covered in my Getting Started With Churning series (I should write that 6th part at some point…), if you are able to constantly put your regular spending towards signup bonuses, 5% back becomes insignificant. Returns of 10%+ are common through signup bonuses (on ALL spending!) and even more so if you have a use for miles and points that can be put towards travel. This is why I haven’t yet picked up a Sallie Mae card, but in an event where I stopped churning for a period of time, it would probably be near the top of my list.
Closing Thoughts
I haven’t mentioned it yet, but this card does come with a $25 signup bonus for using your card within 90 days of applying for it. Not a huge deal in a world of $400 and 50,000 point signup bonuses, but a nice little bonus if you decide to pick up this card. I chose to write about this card primarily because it’s so unknown to my friends and family despite it possibly being the best everyday card for them. I receive no benefit if you apply as this is just the public offer page, but here is a link to check out the card for yourself: Sallie Mae MasterCard. What card do you recommend to friends and family that have no interest in juggling multiple?
“The reason this card doesn’t make sense for me is that I don’t mind juggling a large number of different cards while frequently signing up for new ones that have large signup bonuses. ”
I don’t agree. Say you’re trying to get the signup bonus on the CSP. You’ve got two options when it comes to grocery, gas, and bookstore/Amazon spending.
1) Put that spend on the CSP. You earn 1x + get closer to completing the minimum spend requirement.
2) Put that spend on the Sallie Mae instead, and MS the same amount on the CSP. This MS may incur a fee of ~1% such as with Visa gift cards, or as often is the case with gift card churning, you’re coming out ahead.
If you buy Visa gift cards, then you’re gaining 5% from Sallie Mae and then losing 1% to MS fees. You’re still coming out ahead by 4%.
If you gift card churn, then you’re gaining 5% on top of what you get from gift card churning.
Now this argument doesn’t hold up as well when you need such a large volume of spending (the Amex Platinum may fall under this category) that you can’t MS everything you need, and hence you need to supplement your MS with normal spending. However, looking at your numbers, I don’t think you have this issue.
You make some good points, but I am already doing something fairly similar with my other cards. For groceries, I have a Blue Cash Preferred that’s still in it’s first year so that’s where all of my grocery spending goes. We hardly spend money on gas with just 1 car and often have $1 off per gallon fuel rewards, so getting the card just for the gas benefit doesn’t make sense. I also am often able to find Amazon gift cards ~10% off that I add to my account and use towards all of my Amazon purchases, so the card wouldn’t benefit us there either.
While I may have over-simplified in the post, I still don’t think this card makes sense for us at this time. Someone who doesn’t MS and has low monthly spending can be constantly putting all their spending towards signup bonuses, which is what I was going for in the post. Thanks for reading!
Your comment about getting Amazon gift cards 10% off got my attention. Is that from combining a portal bonus with a card that offers a 5% category bonus?
Thanks
I don’t have a way to consistently get 10% off, but I seem to find people selling them on ebay every so often around that rate. The last two tax seasons, it’s been possible to put a portion of your tax refund towards Amazon gift cards and get a 10% bonus so depending on how much your refund was for, this was a solid way to save ~10% on Amazon purchases.
If you shop a lot at Amazon, it’s usually possible to get the gift cards from stores that offer Amex Offers such as Lowes and Home Depot, but you’re limited by the number of Amex cards you own.
You forgot to mention that by having a Sallie Mae savings account and redeeming through Upromise, all rewards get a 10% bonus. So 5.5%.
No need to open it right away, do it in the beginning of December and the bonus will be paid in January/February for the entire 2015.
Not if you redeemed for statement credits, though.
Yeah, I should have at least mentioned the 10% bonus in my post. My goal of the post was to bring attention to a no annual fee card that may work well as a person or family’s only card. If simplicity is your goal at the expense of cash back, then signing up for Upromise and a Sallie Mae savings account probably isn’t worth that 10% bump. If you have the accounts already or have worked the Sallie Mae card into your rotation, then is definitely makes sense to utilize the extra bonus.
Thanks for the call out!
It’s zero maintenance and fees.
Link accounts once, schedule a recurring $25 monthly transfer, redeem whenever you want for Upromise credit, and c’est tout. The funds slowly roll into the account.
P.S.
In any case I find bank transfer superior to statement credit (at least for non-amex cards) .
I’ve had a Sallie Mae Account for some time (and I am not a student) and it pays a respectful 0.9% APY will look into it. Thanks.
Just saw my statement and they have stopped 5% cashback 🙁 ..and no communication at all! Bye bye Sallie Mae
Thanks for the update, most good things come to an end eventually. They really didn’t grandfather this one for very long though.