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Discover it® Student Cash Back Review

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Discover it® Student Cash Back

A Starter Card with Some Student-Friendly Features

If you’re a student with fair or average credit looking for a card that will help you boost your score and earn some cash back, the Discover it® Student Cash Back is a solid contender.  

When you swipe your card, you’ll get 5% cash back up to the quarterly max on rotating categories that change every quarter. On all other purchases you make you’ll earn 1% cash back. To earn the 5% cash back in bonus categories you’ll have to activate with Discover for each quarter you want the special 5% rate. Without activation, your purchases won’t earn 5% cash back, they’ll earn the usual 1%. 

There are some uncommon perks attached to the card. At the end of your first year with the card, Discover will match all the cash back you’ve earned in the previous 12 months, dollar-for-dollar. And for every school year your GPA is 3.0 or higher, Discover will give you a $20 statement credit (for up to five years).

The card also offers a 0% introductory APR on purchases for your first six months. After those six months, you’ll pay a variable APR between 14.74% and 23.74%. 

Smart Features

5% cash back in rotating categories – Every quarter, Discover will offer a bonus category. Purchases in that category will earn you 5% cash back up the quarterly maximum, as long as you activate your spending with Discover each quarter. 

1% cash back on all other purchases – All purchases outside of a bonus category that you’ve activated will earn 1% cash back. 

Dollar-for-dollar cash-back matching after your first year – After your first 12 months as a cardholder Discover will give you a match on all the cash-back you earned during the year.  

$20 statement credit for each year your GPA is 3.0 or higher – Discover rewards students who earn GPAs of 3.0 or higher with a $20 annual bonus (for up to 5 years).

Who It Benefits

Students who know they would use the bonus categories – and who are organized enough to activate each quarter – have the most to gain from the card. Five percent is a competitive cash-rate, particularly for a card with no annual fee. Students who don’t want the hassle of tracking rotating categories and activating in each quarter would be better off with a flat-rate card offering a percentage higher than the 1% base rate that the Discover it® Student Cash Back offers.

Students who have fair or average credit and want to boost their scores also stand to benefit from the card. When you become a cardmember, you’ll be able to monitor your FICO® score online when you log into your account. That makes it easier to track your progress toward a better credit score. 

How It Works

The Discover it® Student Cash Back is a cash-back card that offers a base rate of 1% and a rate of 5% (up to the quarterly max) in bonus categories that rotate each quarter. To earn the 5% rate on your spending in a given quarter’s bonus category you will have to opt in with Discover. You won’t automatically earn 5% and you can’t retroactively get 5% cash back if you forget and want to activate later in the quarter. 

The Discover it® Student Cash Back comes with some student-friendly bonuses that set it apart from other cash-back cards. After your first year as a cardholder Discover will give you a dollar-for-dollar match on all the cash-back you earned during the year. Plus, for every year (up to five years) that you earn a GPA of 3.0 or higher you’ll get a $20 bonus. 

In your first six months as a cardholder you’ll enjoy a 0% introductory APR on purchases. After the six months end, you’ll pay a variable APR between 14.74% and 23.74%. There is no annual fee associated with the card. 

What’s the Catch

The biggest catches associated with the Discover it® Student Cash Back is the fact that you have to opt in to earn that 5% cash back rate and there is a quarterly max. For busy college students who might not be accustomed to dealing with credit card companies, that opt-in process could present a major hurdle to earning rewards. 

Just the Math Please

Rewards

If you activate your spending in a given quarter’s bonus category you’ll earn 5% cash back on your purchases in that category. All other purchases will earn you 1% cash back. You can redeem your cash back rewards at any time, in any amount.   

Balance Transfers

The APR on any balance you transfer to the card will be subject to a variable APR of 10.99% for the first six months after you transfer the balance. After six months, your APR on transferred balances will jump to a variable APR of 14.74% - 23.74% Variable. The balance transfer fee on the card is 3%. 

Rates and Fees

Annual percentage Rate (APR) for Purchases

Your purchase APR on the card will be a variable rate of 14.74% – 23.74%.

APR for Balance Transfers

Any balances you transfer to the card will be subject to a APR of 14.74% - 23.74% Variable.

APR for Cash Advances

The APR for cash advances is a 26.74% Variable.

Penalty APR and When It Applies

This card does not charge a penalty APR. 

How to Avoid Paying Interest on Purchases

Your due date will be at least 25 days after the close of each billing period (at least 23 days for billing periods that begin in February). If you pay your entire balance by the due date each month you will not accrue interest charges. 

Annual Fee  

$0

Transaction Fees

  • Balance Transfer 3% of the amount of each transfer
  • Cash Advance Either $10 or 5% of the amount of each cash advance, whichever is greater.
  • Foreign Purchase Transaction 3% 

Penalty Fees

  • Late Payment None the first time you pay late, then up to $37
  • Returned Payment Up to $37

Rates & Fees

How It Stacks Up

Want to know how the Discover it® Student Cash Back stacks up to the competition? For one thing, 5% in bonus categories is a competitive cash-back rate, even with the earnings capped at your first $1,500. It’s the same rate that the popular Chase Freedom® card offers. The 5% cash-back rate in bonus categories up to $1,500 is the same offer you’ll get from the Discover it® Cash Back card offer. 

The cash-back rate is competitive on the Discover it® Student Cash Back, but what about other card features? Cards that offer higher rates in bonus categories tend to require quarterly opt-in, so the Discover it® Student Cash Back isn’t unique in that regard. As with other cards that feature bonus categories, the Discover it® Student Cash Back comes with the risk that you won’t maximize your earnings if you either fail to activate your 5% rate or you fail to spend in the bonus categories. 

The dollar-for-dollar matching and the $20 bonus for good grades are nice perks that other student cards can’t boast. In fact, Cashback Match™ is a special Discover perk that only new cardmembers can get, and only after their first 12 months. 

Bottom Line

If you are looking for a student credit card that offers competitive cash-back rewards with extra perks, take a look at the Discover it® Student Cash Back. Before you decide whether to take the plunge, take a look at the recent bonus categories and ask yourself whether you’d make good use of those categories. It’s also a good idea to ask yourself whether you’d be organized enough to opt in each quarter you want to earn 5%.