Discover it® Student Cash Back review

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Garrett Yarbrough  in  Student How we rate our cards  | 

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Best student cash back card

Annual Fee:
$0
Purchase Intro APR:
0% for 6 months
Balance Transfer Intro APR:
10.99% for 6 months
Regular APR:
12.99% - 21.99% Variable
Terms and Restrictions Apply | Rates and Fees

Bankrate Rating

 

Best for student cash back

  • Rewards rate: 5 percent cash back on each quarter’s activated rotating categories (on up to $1,500 in combined purchases, then 1 percent) and 1 percent on all other purchases
  • Welcome offer: All cash back earned within the first 12 months will be matched
  • Annual fee: $0
  • Purchase intro APR: 0 percent for six months
  • Balance transfer intro APR: 10.99 percent for six months
  • Regular APR: 12.99 percent to 21.99 percent variable

If you’re a student in the market for a starter credit card, the Discover it® Student Cash Back card offers some of the best rewards 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 Good Grade Reward annual bonus makes this 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.

Current welcome offer

As with the issuer’s cards for those with good credit and above, Discover will match all the cash back you earn during your first 12 months as a Discover it Student Cash Back cardholder.

While the first-year cash back match offer differs from the typical cash back sign-up bonus—which you’d receive upfront after meeting a spending requirement within a set time frame— this style of welcome offer could be to a student’s advantage. This 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, two of the most popular student-centric offers are 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, and the Journey Student Rewards from Capital One card’s $5 monthly statement credit on select streaming subscriptions for up to 12 months, available after each on-time monthly payment.

Cash back

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 seems intimidating for an entry-level card, the Discover it® Student chrome card and its year-round bonus categories, though less rewarding, might be a bit easier to handle.

Earning cash back

Upon activation, you’ll earn 5 percent cash back within the Discover 2021 cash back calendar bonus categories up to $1,500 on combined purchases (then 1 percent back). Usually, there will be two to three bonus categories each quarter that fit with each period’s popular expenses. For example, you’ll typically earn bonus cash back at drugstores and pharmacies in Q1 (January to March) and at online shopping retailers in Q4 (October to December).

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.

Redeeming cash back

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 via PayPal or redeem for gift cards.

How much are your rewards worth?

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.

Benefits

Discover cards are typically light on benefits, but luckily the features are a bit meatier in the student card landscape.

Good Grades Reward

This credit card rewards you for building your GPA while you build your credit score. You can get a $20 statement credit each school year your GPA is 3.0 or above (for up to the next five years).

24/7 U.S.-based customer service

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 free of cost.

Rates and fees

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 $40 thereafter) and you won’t be charged a penalty APR. This 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, the ongoing 12.99 percent to 21.99 percent variable APR could be well below the current average interest rate. That’s a blessing considering starter cards are notorious for their high interest rates.

How the Discover it Student Cash Back compares to other student cards

Except for the welcome bonuses mentioned above and any perks that you might find useful, it’s hard for flat-rate student cards to compete since the Discover it Student Cash Back card also earns 1 percent cash back on all purchases. The Journey Student Rewards from Capital One can earn up to 1.25 percent cash back on all purchases if you make on-time payments each month and the Deserve® EDU Mastercard for Students offers up to $600 of cellphone protection when you pay your cellphone bill with your card, but these perks might not be persuasive enough to give up the Discover Student Cash Back card’s features.

The Bank of America® Cash Rewards credit card for Students might be the Discover it Student Cash Back card’s biggest competition. It also translates the rewards power of its non-student sibling, the Bank of America® Cash Rewards credit card, into an entry-level card—minus the boosted rewards if you’re a Bank of America Preferred Rewards member.

Card name Rewards rate Annual fee Welcome bonus
Bank of America® Cash Rewards credit card for Students
  • 3 percent cash back on a category of choice: gas, online shopping, dining, travel, drugstores or home improvement/furnishings
  • 2 percent cash back at grocery stores and wholesale clubs (up to $2,500 per quarter in combined 2 and 3 percent category purchases, then 1 percent back)
  • 1 percent cash back on all other purchases
$0 $200 cash rewards bonus after spending $1,000 in purchases within the first 90 days.
Journey Student Rewards from Capital One
  • 1 percent back on all purchases. Increases to 1.25 percent for that month if the card is paid on time
$0 Up to $60 streaming subscription credit: $5 per month for 12 months if the card is paid on time (*Exclusions apply).
Deserve® EDU Mastercard for Students
  • 1 percent cash back on all purchases
$0 Receive a one-year subscription reimbursement  of Amazon Prime Student on Deserve after spending $500 in purchases within the first three months of card membership.

Best cards to pair the Discover it Student Cash Back card with

Since you’re just starting on your credit journey, it’s crucial to focus on building good credit habits and eventually upgrading to a full-grade 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 Journey Student Rewards card—could earn more rewards on purchases outside your 5 percent categories or their quarterly spending limit.

Bankrate’s Take—Is the Discover it Student Cash Back card worth it?

The Discover it Student Cash Back card 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 and Good Grade Reward bonuses are outstanding considering this card’s low ongoing rates and fees.

Pros

  • 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
  • No annual fee, foreign transaction fees or penalty APR and the first late payment fee is waived (up to $40 thereafter)
  • Matches all cash back earned in your first 12 months
  • $20 statement credit for each academic year your GPA is 3.0 or higher (for up to five years)

Cons

  • Rotating categories might be high maintenance for students new to credit cards
  • No purchase or travel protection benefits

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.