This credit card is perfect for students who excel academically, because it offers a bonus to those who make good grades. It’s also best for those who won’t mind doing a little work to maximize their rewards. The highest-earning rewards categories rotate each quarter and require activation, so students have to be willing to keep up with the schedule to get the most value.
Federal law requires young adults under age 21 to have their own verifiable income to be approved for any credit card on their own. However, note that if you are under 21, Discover doesn’t allow you to apply with a co-signer, so applying with an adult who does meet the income requirements isn’t an option.
Generous first-year bonus for new cardholders
Excellent rewards-earning rate on quarterly bonus category purchases
Extra rewards for good grades
Waived first late fee
Limited international acceptance
- Generous first-year bonus for new cardholders: Only about half of all student credit card offers we track advertise a bonus for new cardholders, and this is one of them. Rather than offering a traditional bonus that requires you to meet a minimum spend amount, Discover matches all the cash back you’ve earned in the first year, dollar for dollar.
- Excellent rewards-earning rate on quarterly bonus category purchases: Discover offers the best earning rates on rotating purchases categories many may find useful, such as grocery stores, restaurants, gas stations, rideshares, and online shopping. The top cash-back rate—5%—is limited to the first $1,500 spent in the bonus category each quarter, but the rewards are still generous compared to other student cards that offer much lower earning rates.
- Extra rewards for good grades: Making good grades pays off in more ways than one. Each year you maintain a GPA of 3.0 or higher, you’ll receive a $20 cash bonus. You’re eligible for the good-grade bonus for up to five years.
- Waived first late fee: If you’ve been cramming for a major exam and forget your payment, Discover won’t penalize you with a late fee on your first late payment, unlike many student cards. But, you’ll want to set a reminder or schedule an auto payment. You could be charged a late fee of up to $40 for your second late payment.
- Complicated rewards: Discover requires you to enroll in the quarterly bonus rewards categories, and you have to remember which spending category nets you the highest rewards rate when you’re using your card. You can set reminders about enrolling, but it’s still one extra thing to manage for busy college students.
- Limited international acceptance: Discover has limited worldwide acceptance compared to credit cards issued by other major processing networks like Visa and Mastercard.
Bonus for New Cardholders
Most credit cards typically pay a one-time bonus for spending a certain amount within a specific time period, but Discover does things a bit differently. For this new cardholder bonus Discover will automatically match all the cash back you’ve earned in the first year. There’s no limit to how much you can earn or how much Discover will match.
The cash-back match structure puts less pressure on you, since there’s no minimum spending requirement to earn a bonus. Sure, the more you spend the more you earn, but you can use this card to earn a bonus that reflects your normal spending habits. Everyone’s budget is different.
But to get an idea of the potential value of this bonus, let’s assume the average student spends about $6,074 a year (about a fourth of what the average U.S. household spends, per 2018 figures from the Bureau of Labor Statistics). If that student used this card exclusively, we estimate they’d earn about $94 in cash back each year. That would make the first-year match worth $94. Considering about half of student cards don’t offer sign-up bonuses of any kind, that’s not shabby.
Earning Points & Rewards
The Discover it Student Cash Back Card pays 5% cash back on up to $1,500 in purchases in special categories or at select retailers that change each calendar quarter. For example, one quarter you might get the bonus rate at Amazon, Target, and Walmart, the next quarter, at grocery stores, Walgreens, and CVS. Remember, you must enroll in the category each quarter to get the higher rate. All your other purchases will earn unlimited 1% cash back.
|Discover it 5% Cash-Back Calendar For 2020|
|Period||5% Cash-Back Rewards Categories||When to Enroll|
|Q1 (January-March)||Grocery stores, Walgreens, and CVS||Expired|
|Q2 (April-June)||Gas stations, Uber, Lyft, and wholesale clubs, plus Home Depot (June)||Now|
|Q3 (July-September)||Restaurants and PayPal||Now|
|Q4 (October-December)||Amazon.com, Walmart.com, and Target.com||As soon as Aug. 1|
You can maximize your rewards by using your card exclusively. Pay your bill on time and in full each month to avoid penalties and interest that can hurt your credit and negate your rewards earnings.
Being a good student also pays off. Each year your GPA is 3.0 or higher, Discover will reward you with a $20 statement credit. You can earn the bonus for up to five years.
You can redeem your rewards at any time for any amount. They can be redeemed for a statement credit, a deposit to your bank account, or a donation to certain charities. You can also redeem rewards at checkout with Amazon or Paypal, and you don’t lose any value when rewards are redeemed this way. Each dollar of cash back is a dollar toward your purchase.
The only exception? You must have a minimum of $20 to redeem for gift cards or instant eCertificates.
Your rewards won’t expire. Your account will be automatically credited if it’s closed or you have not used the rewards within 18 months.
How to Get the Most Out of This Card
The quarterly rotating categories mean you’ll have to switch up your credit card spending every few months to maximize your spending and keep a close eye on any new retailers that may be added to the mix. You also have to sign up online or via the mobile app to qualify for the 5% rewards. Make sure you enroll at the beginning of the quarter to earn the best rewards on all your purchases.
To earn the maximum bonus match at first year’s end, you could try to spend strategically in the 5% categories throughout the year. For example, save your big Amazon purchases for the last quarter of the year, or find opportunities to dine out in August.
Discover offers at least $5 when you redeem rewards for a gift card, meaning $20 of cash back could get you a $25 gift card. If you’re not saving up for a gift card, redeem your cash back for statement credits to help pay off your card bill.
J.D. Power ranked Discover number one in its 2019 U.S. Credit Card Satisfaction Study, which considered the input of over 28,000 customers across 12 credit card issuers.
If you do a lot of your banking on your smartphone, you’ll also be happy to know that Discover also earned first place in J.D. Power’s 2019 U.S. Credit Card Mobile App Satisfaction Study.
You’ll have access to U.S-based customer service by phone, online and in-app messaging, 24/7, and you’ll be able to check your FICO score for free each month.
Prequalifying isn’t a guarantee of approval. Discover will ask for more information on the full application, and it’s possible that could disqualify you. At the very least, you’ll have a better idea about whether you qualify by using the tool.
The Discover it Cash Back for Students gives you the opportunity to sign up for free alerts that monitor whether someone has used your Social Security number, opened a new credit account in your name, or inquired about your credit history.
The card also has a handy feature that lets you instantly freeze your card (and prevent new purchases) if it’s lost or stolen. Discover also offers free overnight card shipping to any U.S. address if your credit card is lost or stolen.
Fees to Watch Out For
In addition to waiving the first late fee, the Discover it for Students Cash Back card won’t increase your interest rate if you’re late on a payment, which is nice, and there aren’t any foreign transaction fees. Do watch out for the balance transfer fee. As long as you transfer a balance during a promotional period, you’ll pay a 3% fee. If you transfer outside of the promotional period, the balance-transfer fee jumps to 5%, which is one of the highest among student cards.