Students with good grades interested in a credit card with great rewards might want to check out the Discover it® Student Cash Back credit card. It includes cash back rewards and there’s no annual fee. Students can take advantage of reward perks like minimal fees and free FICO scores. They can even receive forgiveness if they’re late on their first payment. Discover will waive the first late fee. This is important as students work to build credit and learn about ways to be responsible when managing new credit accounts.
Other perks include statement credits for having a good GPA, and students won’t have to worry about not being eligible for the Discover it® Student Cash Back card. Discover knows that students need to build their credit. So, FICO history isn’t necessary when applying for this card.
The Essentials of the Discover it® Student Cash Back card
- Introductory Offer: 0% APR for six months and a 10.99% APR for balance transfers from another card in the first six months. After the promotion ends, the APR switches to a variable APR of 19.49% Variable.
- Annual Fee: There is no annual fee.
- Primary Feature: Annual bonuses total about $85 if students spend an average of $300 each month.
- Introductory Bonus Offer: Cardholders must enroll every quarter to receive a 5% cash-back reward in specific categories every 3 months. This reward is for purchases of up to $1,500 quarterly. They will then receive 1% cash-back rewards on general purchases when they reach the quarterly maximum of $1,500.
What’s Interesting about the Discover it® Student Cash Back card
The Discover it® Student Cash Back card appeals to students and rewards those with a 3.0 GPA with a $20 statement credit annually. This is applicable for up to 5 years. There is a waived penalty if students are late on their first payments. After that, there is a fee of up to $39. Students can also freeze and unfreeze their credit accounts to prevent unauthorized use.
One enticing reward is Discover’s cash-back offer. They will match the full cash-back rewards that students earn throughout the year, and there’s no limit. Cardholders must enroll every quarter to receive a 5% cash-back reward in specific categories every 3 months. This reward is for purchases of up to $1,500 quarterly. They will then receive 1% cash-back rewards on general purchases when they reach the quarterly maximum of $1,500. For example, January to March might include all purchases through Amazon or PayPal. The next quarter might include all restaurants, gas stations and grocery stores. There’s also no foreign transaction fee if students use their cards overseas.
Students can apply and get approved for a Discover it® Student Cash Back card
even if they have student loans. The approval rate isn’t currently available to the public, but students with no credit or limited credit are usually approved. They only need to verify their two- or four-year college. Employment isn’t required with the loan application, but it asks students to list a source of income.
Things to Consider
The Discover it® Student Cash Back card has a few fees students should know about. For example, the maximum late fee is $39. There’s also a fee for balance transfers. Students will pay an introductory 3% fee that can go up to 5% for future balance transfer requests.
Another concern is that while the approval process is simple, students need to be responsible when opening credit accounts as this is a form of debt. When they start making payments, their minimum payment each month is about 2% of their balance plus interest and any late fees. The other options are that they can pay a slightly higher amount or pay the full balance.
Other concerns include the condition that students have to sign up for reward categories every quarter. Popular categories like grocery stores and gas stations might not be included year-round. Another thing to know is that cash-back matching is only for the first year. While it can add up to $300, students learning about credit may not tap into the full rewards benefits.
How to Get the Most from This Card
To maximize the value in the Discover it® Student Cash Back card, students need to outline the categories available throughout the year. They might want to set up alerts or reminders so they don’t forget. Discover also lets them sign up early for the following quarter’s promotion categories.
Students can use their Discover it® Student Cash Back card as a go-to card if a particular category is offering promotions so they can earn cash-back rewards. For example, if Amazon and grocery stores are the eligible categories, students need to read the exclusions. Amazon Fresh might not be in the promotion, but supermarkets may be eligible. Hence, students need to check category inclusions and exclusions to benefit from the rewards offered.
Other Card Options That Might Interest You
Other credit cards that students might want to explore include the Discover it® Secured card. Students will need to make a cash deposit of $200 and there’s no annual fee with this card. Discover reports to all 3 credit bureaus. This can help students build credit so they can eventually switch to an unsecured credit card. If they make payments on time, they are usually eligible for unsecured accounts after eight months of consistent payments.
Another alternative is the OpenSky® Secured Visa® Card. There’s no credit check when applying for this type of card. Cardholders also don’t need to have a checking account. Another benefit is that the annual fee is only $35. Cardholders can also pay their monthly balances by money order or they can make a money transfer payment.
The Final Word
The Discover it® Student Cash Back card is a great starter credit card for students. Most receive approval and there’s no annual fee. Card perks include a $20 statement annually for good grades, cash-back matching, and a potentially lucrative 5% cash-back reward.
A concern is that students need to keep track of reward categories. The cash-back matching program can give students up to $300 cash back in the first year. However, they need to sign up for the specific categories to access the rewards. Students who sign up early for reward categories and know which purchases are eligible can enjoy cash-back rewards.
Between cash-back rewards, no annual fee and flexible terms, students can learn how to build credit over time. This introduction to credit is helpful as they finish school and prepare for graduation and future responsibilities.