Radius Bank located in Boston has partnered with Gradifi, the student debt-repayment platform to launch their debit card that is dedicated to paying down account holders’ student loans. Gradifi, start-up located in Boston is known for its services like the Employer Student Loan Paydown Plan (SLP) to help people chip away their student loans balance.
Radius and Gradifi are all about debt reduction and pitching that to young Americans as a plan to capitalize on the nation’s nearly $1.4 trillion student loan tab. Radius Bank has only one location in Boston with $655 million in deposits. According to Bloomberg, nearly 42 million borrowers with government backed student loans owe $30,100 on average. The federal Consumer Financial Protection Bureau said in September that one in four borrowers, or about 10 million Americans, was either delinquent or in default on student debt.
Bloomberg spoke with Gradifi founder and CEO Tim DeMello, who indicated that“what millennials really want is for someone to create a rewards program for them and put all that money in their student loan accounts,” said Tim DeMello, Gradifi founder and chief executive officer. He said the idea was the most popular of about eight choices presented to focus group participants last autumn. Gradifi chose debit cards, rather than credit cards, because the company’s goal is to reduce Americans’ debt loads.”
The Gradifi MasterCard® Debit Card with Apple Pay™ will be released in the fall. According to KSWO-TV, cardholders will earn 1% unlimited rewards on all debit card purchases. The rewards will be applied directly toward any student loan via Gradifi’s secure payment processing platform. To get a card you have to sign up for a free checking account with Radius. Cardholders receive other convenient features such as unlimited ATM rebates.