Pay Off Student Loans ... by Spending More
New Visa debit card has rather strange idea for borrowers
By Evann Gastaldo,  Newser Staff
Posted Apr 8, 2012 10:59 AM CDT
Loan company SimpleTuition.com says its new Visa debit card can help students repay their loans.   (AP Photo/LM Otero, File)

(Newser) – Struggling with student loan debt? The SmarterBank Visa debit card can help you pay it off … by spending more money on other stuff. The card, launched by student loan comparison company SimpleTuition.com, offers rewards from 0.5% (for purchases under $100) to 1% (for purchases over $100), which go toward student loan balances. But experts are, not surprisingly, concerned at the amount borrowers would have to spend before getting any sort of significant reward.

For example, if you swipe and sign for $1,000 worth of purchases each month, you'll only get a maximum of $10 in rewards. The company behind the card says even that small reward amount could help you repay a 10-year loan of $8,500 at 6.8% interest 16 months sooner, and would save you $1,500. But SmartMoney notes that for most students with loans, $10 per month in rewards would shorten their repayment period by just five months.