Discover it® Student Cash Back review
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Discover it® Student Cash Back Card Overview
If you’re a student in the market for a starter credit card, the Discover it® Student Cash Back card 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 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.
What are the pros and cons?
- Rotating categories might be high maintenance for students new to credit cards
- This card offers no purchase or travel protection benefits
A deeper look into the current card offer
- 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: 13.74 percent to 22.74 percent variable
Current welcome offer
As with the issuer’s cards for those with good credit and above, Discover’s rewards program matches 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.
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 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 2022 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’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). Discover’s quarterly category calendar is generally reliable from year to year since each year’s categories are announced ahead of time and the categories are pretty similar each year.
Right now you’ll earn 5 percent back on up to $1,500 in purchases from restaurant and PayPal purchases—perfect for online shopping at the beginning of the fall semester.
Discover cash back 2022 categories
|Quarterly categories||2022 Discover it categories|
|Q1: Jan. through March||
|Q2: April through June||
|Q3: July through Sept.||
|Q4: Oct. through Dec.
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.
Discover cards are typically light on benefits, but luckily the features are a bit meatier in the student card landscape.
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 at no charge.
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 $41 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 13.74 percent to 22.74 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
While the Discover it Student Cash Back credit card 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.
Discover it Student Cash Back vs. Bank of America Cash Rewards credit card
The Bank of America Cash Rewards credit card for Students might be one of the Discover it Student Cash Back card’s biggest competitors on account of its choice categories that can be swapped monthly. It also translates the rewards power of its non-student sibling, the Bank of America® Customized Cash Rewards credit card, into an entry-level card—minus the boosted rewards if you’re a Bank of America Preferred Rewards member.
While not quite the same as the Discover it Student card’s unique cash back match benefit, the Bank of America Cash Rewards for Students offers somewhat of a rarity in the student credit card space–a sign-up bonus of $200 within the first 90 days of account opening after you spend $1,000, which could be manageable for those utilizing this card for regular purchases and bills.
While the Bank of America Cash Rewards for Students is definitely worth considering if you’re a student who wants to earn rewards while building your credit score, it’s important to keep in mind that this card recommends a good to excellent credit score (670 to 850 FICO score) to apply while the Discover it Student Cash Back does not require a credit score, making it a bit more difficult to attain for those just starting out.
Discover it Student Cash Back vs. Capital One SavorOne Student Cash Rewards Card
Speaking of translating the rewards power of a full-fledged card, 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 Vivid Seats purchases if there’s a concert coming up.
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, the Discover it Student Cash Back card 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 sky-high 15.24 percent to 25.24 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.
Best cards to pair with the Discover it Student Cash Back card
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 Capital One Quicksilver Student 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 are 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 05.03.21