Students can get higher cash back rates when they put in a little leg work to activate rotating quarterly categories.
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Bottom line
This card is one of the top student-focused credit cards on the market, due to its $0 annual fee, competitive cash back rewards rate, first-year cash back match and user-friendly terms. This card’s rotating cash back categories offer students on a budget a great variety and opportunity to recoup value on everyday expenses.
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If you’re a student in the market for a starter credit card, the Discover it® Student Cash Back offers perhaps the highest rewards rate you’re likely to find on a card for applicants with no credit history.
Having the cash back power of the full-fledged Discover it® Cash Back card plus Discover’s unique low fees makes this card a leader among student credit cards. Unless you’re considering a card with a simpler rewards program, this Discover student card should make your short list.
Strong variety of bonus spending categories with 5 percent cash back on activated rotating category purchases (up to $1,500 in purchases each quarter, then 1 percent) and 1 percent on all other purchases.
This card does not charge fees: no annual fee, foreign transaction fees or penalty APR and the first late payment fee is waived (up to $41 thereafter).
The issuer matches all cash back earned at the end of your first year.
Rotating categories might be high maintenance for students new to credit cards.
This card offers no purchase or travel protection benefits.
The intro APR offers on purchases and balance transfers are short, so it’s best to avoid carrying a balance when possible.
Discover matches all the cash back you earn at the end of your first year. It’s rare to find a student card that comes with a sign-up bonus, especially one this valuable.
The first-year cash back match offer differs from the typical cash back sign-up bonus you’d receive upfront after meeting a spending requirement within a set time frame. Instead, this style of welcome offer could be to a student’s advantage. This structure allows students to focus on building credit instead of overspending for a bonus since there isn’t a limited-time spending requirement.
Perhaps one of the main reasons that cash back matching is a great incentive is because many starter cards simply don’t carry welcome offers. Outside of Discover’s cards, the most popular student-centric offer is the Deserve® EDU Mastercard for Students card’s one year of Amazon Prime Student subscription reimbursement after spending $500 on purchases within your first three months of card membership.
In fact, if you spend more than $4,000 in your first year across your 5 percent rotating categories, you’ll earn more cash back than the biggest student intro bonus on the market: the Bank of America® Cash Rewards credit card for Students‘ $200 cash bonus after spending $1,000 within the first 90 days.
The Discover it Student Cash Back card is a rotating category card, meaning it earns higher cash back rates in bonus spending categories that cycle each quarter. In exchange for higher reward rates, your combined category purchases are capped at a $1,500 quarterly limit.
If juggling these category restrictions and remembering to activate your categories each quarter doesn’t sound appealing, the Discover it® Student chrome card and its year-round bonus categories, though less rewarding, might be a bit easier to handle.
Upon activation, you’ll earn 5 percent cash back within the Discover 2023 cash back calendar bonus categories up to $1,500 on combined purchases (then 1 percent back). You’ll also collect 1 percent cash back on all other purchases, which is a good deal for student cards. After all, several such cards earn a maximum of 1 percent back.
Usually, there will be two to three cash back categories each quarter that fit with each period’s popular expenses. For example, you might earn bonus cash back at drugstores and pharmacies in Q1 (January to March) and at online shopping retailers in Q4 (October to December).
Discover used to announce its full bonus categories for the year ahead of time, but it now releases its bonus category calendar on a quarterly schedule.
Right now, you’ll earn 5 percent back on up to $1,500 in purchases for grocery stores, drug stores and select streaming services. Next quarter’s bonus categories will be released soon.
Discover offers several ways to redeem your rewards. You can receive cash back as a direct deposit into your bank account or as a statement credit. You can also choose to donate your rewards to charity, pay with your rewards at Amazon.com or redeem for gift cards.
Like other cash back programs, each percentage point of your rewards rate will net you 1 cent back of your total purchase. For instance, 1 percent of a $100 purchase will net you $1 and 5 percent would earn $5 back.
Converting cash back into gift cards or using them for online retailer merchandise usually means stomaching a drop in reward value, but Discover guarantees all redemption options will yield at least a 1:1 value. Redeeming for a gift card with Discover is one of the few times it might be a wise move if you have a specific purchase in mind. Depending on the merchant, cardmembers that select a gift card (ranging from $5 to $200) can have 5 percent to 20 percent in extra value added to the balance.
Discover cards are typically light on benefits, but luckily the features are a bit meatier in the student card landscape.
Besides value, customer service and security are two of Discover’s founding principles. Its high caliber of credit card customer service has landed Discover a top spot in the renowned J.D. Power Credit Card Satisfaction Survey for five of the past seven years.
You’ll receive 24/7 U.S.-based customer service, a free FICO Credit Scorecard, spending summary reports and in-depth credit monitoring that even scours the dark web for your Social Security number. Credit monitoring services like this normally require a third-party subscription, but the Discover card automatically provides it at no charge.
The Discover it Student Cash Back card has the potential to be a low-cost alternative to other credit-building options for students, such as credit-builder loans and starter credit cards. There are no annual fees or foreign transaction fees, which can come in handy while studying abroad. Plus, your first late payment fee is waived (up to $41 thereafter) and you won’t be charged a penalty APR. This element gives you a safety net while you’re learning the credit card ropes.
You’ll also get a fantastic chance to water down any interest you might accumulate in the case of an emergency, thanks to the card’s six-month 0 percent intro purchase APR. There’s also a reduced 10.99 percent intro APR for balance transfers for the first six months. Even after this intro period, the ongoing 17.49 percent to 26.49 percent variable APR could be below the current average interest rate. That’s a blessing considering starter cards are notorious for their high interest rates.
While the Discover it® Student Cash Back is among the leaders in its category, there is a variety of options from other issuers for students looking to build credit while earning rewards.
These cards are typically forgiving to new credit card users and offer student-centric rewards, allowing students to recoup value on popular spending categories and focus on building their credit profile.
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Both Discover student credit cards offer the same solid rewards, benefits and rates, but they have different cash back programs. Instead of rotating 5 percent bonus categories, the Discover it® Student chrome card earns 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1 percent cash back on all other purchases.
The Discover it® Student chrome might be a better choice for students that don’t want to dive into the rewards deep end and track activation periods and several quarterly bonus categories. But unless you’ve done the math and your budget would earn more cash back from year-round 2 percent gas station and restaurant categories, the Discover it® Student Cash Back card is the stronger card thanks to its higher rewards rate and higher quarterly bonus spending cap.
The Capital One SavorOne Student Cash Rewards Card has the potential to be more rewarding than the Discover it® Student Cash Back — and is much easier to use. For no annual fee, you’ll earn a whopping unlimited 3 percent cash back on popular categories that students can take advantage of nearly every day, such as dining, entertainment, popular streaming services and grocery stores (excluding superstores like Walmart and Target). What’s more, you’ll also get an entire 8 percent cash back on Capital One Entertainment purchases.
Since it’s probably hard to maximize rotating categories on a student’s budget, the SavorOne Student is likely more rewarding than the Discover it® Student Cash Back, but it’s a close call. Based on the $15,900 average yearly spend (courtesy of the Bureau of Labor Statistics) and assuming you can maximize your Discover card’s 5 percent categories’ quarterly spending limits (up to $1,500 each quarter, activation required), the Discover it® Student Cash Back only earns $29 more per year in rewards than the SavorOne Student card.
However, the Discover it® Student Cash Back has a big leg up on the student SavorOne card if you think you may carry a balance. The SavorOne Student poses a higher 19.24 percent to 29.24 percent (variable) APR with no zero-interest offers to shield you from interest, so the Discover it® Student Cash Back would be far more cost-effective if you think you may ever need some time to pay off any student or emergency expenses that pop up.
Since you’re just starting on your credit journey, it’s crucial to focus on building good credit habits and eventually upgrading to a non-student card instead of chasing rewards. Applying for a second credit card this early might not be the best use of your time, but a cash back card that can earn a flat rate higher than 1 percent back — like the Capital One Quicksilver Student card — could earn more rewards on purchases outside your 5 percent categories or their quarterly spending limit.
The Discover it® Student Cash Back is one of the few student credit cards that offer rewards on par with its issuer’s signature card. Its rotating category cash back is hard to beat, plus the first-year cash back match is outstanding considering this card’s low ongoing rates and fees.
The information about the Bank of America® Cash Rewards credit card for Students has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Bank of America® Customized Cash Rewards credit card last updated on 3.3.23
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