There are a number of student credit cards designed for college students who may not have a credit history or high credit scores. One such card is Discover it® Student Cash Back, which offers an excellent rewards program that allows students to receive cash back on certain purchases.
If you want to build your credit history while still on campus and be rewarded, this credit card is a good choice to consider. Here’s why (and why not).
When should I use Discover it student cashback?
You need to build your credit history
This Discover it Student Cash Back card does not require applicants to have a credit score, making this card an excellent choice for students who do not already have a credit history. In addition, this card offers rewards, a feature that is not always available to students who do not have a credit history.
Do you want to receive rewards
The Discover it Student Cash Back card is a good choice for college students who want to not only increase their credit but also get cash back. You will receive 5% cashback in rotating bonus categories every quarter (up to $1,500 per quarter, then 1% back; registration required), as well as 1% cashback on all other purchases.
The bonus categories of this card change, which means that the categories in which you can get 5% cashback will change every year and every quarter. Unlike some other issuers, Discover announces a full cashback calendar at the beginning of each year. Over the years, the most common bonus categories have been grocery stores, gas stations, restaurants, Target, Amazon, and PayPal.
For example, from July to September 2022 you will receive 5% cashback on purchases at restaurants and via PayPal, and from October to December 2022 you will receive 5% cashback on card purchases. on Amazon.com and through digital wallets.
You need different ways to earn rewards
You can get your money back in several ways. Your options include a direct deposit to your bank account or a credit statement on your Discover account, which reduces your debt. You can also use cashback to pay for items on Amazon.com and PayPal, buy gift cards (starting at $5), or make charitable donations.
Do you want to receive a welcome bonus?
In addition to the rewards program, the Discover it Student Cash Back card offers a welcome bonus for new Discover’s Cashback Match cardholders. This means that Discover will match all cash rewards you earn during the first 12 months of your card membership. Let’s say you made $100 in cash within the first year of opening an account. Discover will give you an additional $100 in cash at the end of the year, for a total of $200 in cash.
You want an introductory annual interest rate on purchases and balance transfers
This card comes with a 0% starting annual interest rate on new purchases and balance transfers for the first six months after the card is opened (thereafter a variable annual interest rate from 14.49% to 23.49%). This can save you a significant amount of money if you need to pay off a debt or pay for a large purchase over time.
However, be sure to pay in full for your new purchases each month. After the introductory period ends, your card’s standard variable annual interest rate will take effect. If you have a balance, you will be charged monthly interest on any amount of debt that you have not paid.
When is Discover it Student Cash Back not worth it?
Your spending habits do not match this card
Depending on your shopping habits, the Discover it Student Cash Back card may not be the right choice for you. The biggest benefit of this card is its rewards program and it is strong for a student ID card. Just make sure the rotating spending categories fit your spending habits. For example, if you don’t spend a lot at gas stations or grocery stores, you might not earn much money back for that quarter when it’s the 5 percent cashback categories.
However, if you don’t already have a credit score, or if your credit score isn’t very good, you won’t qualify for many of the other top student credit cards. In this case, building your credit score should be your first priority. If you qualify for the Discover it Student Cash Back program, earning some rewards with this card—even if your spending habits don’t match—would be better than not having any rewards.
You don’t need a card with alternating categories
Also, don’t forget that registration is required every quarter. If that’s something you don’t want to worry about, you should instead consider a student credit card that brings either increased rewards in certain fixed categories or a flat reward rate on all purchases.
For example, Discover also offers the Discover it® Student Chrome, which gives you 2% cashback on gas and restaurants (on purchases up to $1,000 per quarter, then 1% cashback) and 1% cashback on all purchases. Like the Discover it Student Cashback Card, this card comes with no annual fee and comes with the Discover’s Cashback Match. It is also available to students without a credit history.
Should you receive Discover it Student cashback?
The Discover it Student Cash Back program includes many perks that students should enjoy. You can earn 5 percent cashback on purchases up to $1,500 in certain categories every quarter. If you can max out your purchase limit every quarter, you can earn $75 in cash every quarter, which works out to $300 per year. During the first year, your earned cashback will be doubled, which means that at the end of the year you will receive another $300. You’ll also get plenty of ways to use rewards and APR’s initial purchase offer, a feature that can help you pay off big purchases over time, like decorating your first apartment.
Finally, upon graduation, you can convert your student Discover it Cash Back card to a standard Discover Cash Back card. Depending on your income and credit score, this may mean a higher credit limit (in addition to other benefits).
bottom line
As long as you don’t charge more than you can fully repay by each due date, Discover it student cashback can be a good choice for many college students. It comes with no annual fees, a good rewards program, a welcome bonus, flexible redemption options, and an initial APR offer for purchases and balance transfers. In addition, you will also have the option to upgrade to a traditional, non-student card upon graduation.
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