The new Laurel Road Student Loan Cashback Credit Card gives you 2% cash back to pay down your college debt, plus a $500 sign-up bonus

• The Laurel Road Student Loan Cashback Card is worth a look if you have student loan debt.
• There is no annual fee and a $500 bonus offer for spending $5,000 in the first 90 days.
• The card only offers a competitive earning rate for those who are still paying back college debt.
• Read Insider's guide to the best rewards credit cards.

Over the past five months, new entrants to the rewards credit card landscape have arrived on the scene with a different value proposition: Instead of racking up points and miles to spend, your card should put you on a path toward saving and growing your wealth.

New names like BlockFi, Gemini, and Unifimoney have revealed products that earn cryptocurrency rewards, gold, and stocks. Now, the new Student Loan Cashback Credit Card from Laurel Road is part of the era of credit card disruption with a slightly different premise: Paying down your debt is just as rewarding as earning points or gaining a stake in an asset that may appreciate.

Read more: The best credit cards to turn rewards from everyday spending into investments

If you aren't familiar with Laurel Road, it has been a lending division of KeyBank, and it's starting to expand into other areas to serve standard banking needs.

Laurel Road Student Loan Cashback Card details

The Laurel Road Student Loan Cashback Card has a straightforward structure:

• No annual fee
• No foreign transaction fees
• No interest for the first year
• $500 student loan cashback bonus if you spend $5,000 within the first 90 days
• 2% cash back to redeem on your student loan payments
• 1% cash back for all other redemptions

Paying down your student loans with the rewards from your card is super simple. The platform seamlessly integrates with 95% of student loan providers — the list is here in the FAQ section, so you can make sure your provider is included — and you can pick the amount of cash to pick up that 2x rewards rate.

While there are other offerings in the banking world that allow you to pay off a portion of your student loans, most of them are limited to one provider, so the ability to choose from so many different lenders is a differentiator.

"How the cardholder should look at this is as an additional tool to help them chip away at their student loan debt, not as a tool to help them pay their minimum payment each month," Kaitlin Walsh-Epstein, vice president of marketing and growth at Laurel Road, told Insider. "It encourages the behavior of paying above and beyond their automatic minimum."

Comparison: Laurel Road Student Loan Cashback Card vs other cash-back credit cards

Rewarding smart behavior rather than spending habits

Ultimately, that behavioral component is the backbone of this card. If you're looking for a new payment option for your wallet, you can find plenty of attractive rewards credit cards that will pay you more than 2% in certain spending categories — 5x on travel, 3x at drugstores, 2x on dining, and so on. Take a look at any of the best current credit card offers, and you'll find payouts that, on the surface, may look equally, if not more, appealing than a 2% headline.

Read more: The best cash-back credit cards of 2021

However, if you're swimming in student loan debt, an incentive to spend on travel this summer or go out to eat tomorrow night encourages behavior that won't help you in the long run. Walsh-Epstein says the card was designed with "the understanding that most of our traditional members have a top priority to pay off their student debt."

That priority makes plenty of sense. According to data from the Federal Reserve, the country currently has a staggering load of nearly $1.6 trillion of student loan debt. In fact, the average borrower finishes their academic studies with somewhere in the neighborhood of $29,000 worth of debt to their name.

With those figures, every penny makes a meaningful difference for your future. Walsh-Epstein says that a lot of the typical Laurel Road borrowers are medical school graduates with debt that climbs into the six-figure range. 

"If you think about a doctor or a dentist with $200,000 of debt," she says, "it's absolutely insane."

"So many credit card programs are centered around miles or points," Walsh-Epstein adds, "but we really wanted to design a more aspirational product that rewards people based on their financial goals."

In the traditional world of rewards, there is nothing more "aspirational" than cashing in a chunk of points to sit in first-class on your way to anywhere, but Walsh-Epstein's perspective makes sense: If you're sitting in coach with just a few more months to go until your student loan balance hits zero (or even if you're sitting at home), you're going to feel pretty good.

Read more: The beauty of cash-back credit cards is that you can use your rewards for just about anything — here's how 4 people used their cash back to pay down student loans

If you're currently paying back your student loans, a convenient way to dedicate your rewards to those payments is great. But what about the long run? If you have paid off your college debt, this is not the card to use: 1% cash back isn't anything to write home about. However, it sounds like there may be plans to position this card to grow with cardholders.

"This is our first credit card we're offering our members," Walsh-Epstein says. "What's next? We're constantly looking to evolve our products based on our member needs."

David McMillin has written about credit cards, mortgages, banking, taxes, and travel for the past 10 years. His goal is simple: help readers figure out how to minimize fees and maximize rewards.

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