lobbythis wrote:Exactly. I always thought this card was geared towards low income students and the reward limits are incredibly low. I'll never understand the hype of this card nor why it's difficult to get. I'm surprised it's even offered in anything other than a Platinum.
It's not a well-known card outside of the credit geek world, so I think it's fair to assume that a lot of people who have the Sallie Mae have a bunch of other cards. Most of them are probably going to have a card that gives something better than 1% cash back on off-category purchases. That means the Sallie Mae won't be used often in situations where it only earns 1%.
Probably 90%-95% of my spending on the card has been on a 5% cash back category. And if even a small share of customers are like me, then it must be hard for Barclaycard to make money when they are paying out so much cash on a small revenue base. I don't know how many Sallie Mae cardholders pay interest, but if most people PIF, then Barclaycard would need very high credit standards.
The reward limits are low, I absolutely agree. But with no annual fee, and a customer base consisting of a bunch of credit geeks who generally spend within the caps, Barclaycard's margins must be tiny.
You don't really have average credit card customers (non-geeks) getting Sallie Maes the way they go Freedoms and QuickSilvers. Barclaycard doesn't advertise the card on their website, either, so I think my assessment of the customer base is reasonable.