Discover it® Student Cash Back Credit Card Review: Is It The Best Student Card?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer.

Citi is an advertising partner.

For college students, there just aren't many credit card options that will treat you like an adult. While the best credit cards tend to be rewards-focused most cards catered to students have poor if any rewards at all. Fortunately, the Discover it® Student Cash Back is one of the few cards that offers students the same benefits as holders of the standard Discover it® Cash Back card. The Discover it® Student Cash Back offers a competitive cash back rewards program which will provide fantastic rewards to any student trying to stretch their dollar further. Plus, at the end of your first cardmember year, Discover will double all the cash back you've earned (offer only available to new cardmembers). This is one of the best benefits we've seen on any cash back card, since it will effectively make your cash back rate 2% to 10% for those first 12 months, up to the quarterly limits.

Pros

  • Rewards are as good as some top-tier credit cards' perks
  • $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years

Cons

  • Some benefits might not be useful for students
  • Discover cards are not as widely accepted at all places

Review: A Great Option For Students Looking To Build Credit

For students looking to build their credit, few cards provide an option as good as the Discover it® Student Cash Back. Among all student credit cards, the Discover it® Student Cash Back provides one of the higher cash back rewards. Not only that, but it is designed with a newcomer to credit cards in mind. The Discover it® Student Cash Back has built-in safety mechanisms that can protect you from common mistakes that first-time cardholders might make on their first credit card.

One feature that we like about the Discover it® Student Cash Back is the "No Penalty Rate", which is a pretty big deal when it comes to downside risks. Even if students fail to make monthly payments on time, they won't risk having their credit card's interest rates raised to a high level. Keep in mind though that you still risk getting a knock on your credit score at the very beginning of building credit history, so you're still fully incentivized to make your payments on time.

For new cardmembers, all the rewards you earn are doubled at the end of the first year. This same perk exists on other cash back Discover it® credit cards, and it's what makes these cards stand out beyond it's competitors. At the very least, this benefit helps make up for the fact that the Discover it® Student Cash Back has no welcome bonus.

If you're a student with a GPA of 3.0 or higher, Discover will provide you with even better rewards. New members who meet the aforementioned qualification, will be awarded a $20 statement credit each school year for up to 5 years. This benefit is, of course, reliant upon you being in school. Therefore, we anticipate most individuals will only be able to take advantage of it for approximately 4 years. Still, that is a decent $80 reward for those who manage to maintain that 3.0 GPA over that time.

Discover it® Student Cash Back Benefits and Features

To help you understand the Discover it® Student Cash Back we break down the card's features and explain what we think about each one.

The Rotating Bonus Categories from Discover it® Student Cash Back

Each quarter the types of stores and spending where you are eligible for bonus cash back change. Stores which fall into the right category, during the right time of year will earn you up to 5% cash back on your purchases. Note that this is capped at a maximum quarterly limit of $1,500 – this translates to a maximum cash back rewards of $75 ($1,500 x 0.05 = 75). All other spending nets students with the Discover it® Student Cash Back 1% back, with no cap.

Below is the 2020 calendar that can give you an idea of the types of categories involved.

January-MarchApril-JuneJuly-SeptemberOctober-December
Grocery stores, Walgreens & CVSGas stations, Uber, Lyft & wholesale clubsRestaurants & PayPalAmazon.com, Target & Walmart.com

For maximum savings, be sure to be aware of when you can save most on your big purchases – especially those you can put off by a few months in order to receive a greater bonus.

Redeeming Cash Back

An additional feature of the Discover it® Student Cash Back, which is not present in many other cash back credit cards, is the ability to use the cash earned at any point. Discover it® Student Cash Back users can choose to, at any point, use their balance to shop at the online retailer Amazon. There is no loss if you choose to redeem your rewards in this way. $1 earned through Discover it® Student Cash Back cash back equals $1 you can spend directly on amazon.

Credit-Building Tools on the Discover it® Student Cash Back

As we mentioned, one of the best features of the Discover it® Student Cash Back is the fact that it has no penalty APR. Under most credit cards, if you're late on a payment for more than 30 days, the card company can raise your interest rate to the Penalty Rate or Default Interest Rate. This is a pretty big deal since that rate is usually close to the maximum allowable by law. (To see what penalty rates are like by issuer see our credit card interest rate article here) Generally speaking, this can be anywhere from 10-15% higher than your original APR and the rate can apply indefinitely. It means your balance can become almost twice as expensive.

It is understandable that studying for finals or stressing over research term papers can result in the occasional late or missed credit card payment. With the Discover it® Student Cash Back, even if you do fail to make your payment on time, you won't risk getting penalized by Discover with high interest rates on financing charges. Keep in mind though that, while there is no immediate penalty, credit card users still adversely impact their credit score, so there is still a premium on making timely payments.

One last noteworthy aspect of the Discover it® Student Cash Back is its credit score reporting. With this card, students have the ability to constantly monitor their credit score. Each month their FICO score is presented to them on their statement – if you want to know your current score sooner, Discover also provides this number online. This option gives students insight into how their spending and payment habits affect their credit score – a lesson they can take with them to other credit cards down the line.

How does the Discover it® Student Cash Back compare to Other Credit Cards?

To help you make a better comparison use our tool to compare the Discover it® Student Cash Back with the other student credit card options. Our interactive graphing tool below allows students to enter in their estimated monthly spending across different types of categories to see how their rewards rate can compare across several credit card options they might be considering. In addition to their rewards, users can also see other metrics such as interest rates, and annual fees, etc.

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Assumptions based on $1,430 monthly spend
Monthly spending:
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Discover it® Student Cash Back vs Discover it® Student chrome

The most difficult choice for some may come when having to decide between the Discover it® Student Cash Back or its chrome variant. The Discover it® Student chrome card works a little differently than its sibling card. The chrome version, cardholders receive 1% cash back for all purchases except for those made at gas stations and restaurants – there, students can receive 2% (up to $1,000 per quarter). The bonus category on the Discover it® Student chrome is at least more tailored towards student spending and certainly adds to the card’s functionality.

Because of the different rewards structure, choosing between the cards should come down to the following consideration. If one’s spending is far more limited in both scope and amount, the Discover it® Student chrome provides better value. However, if you enjoy spending freedom and often shop around for things included in the standard edition’s rotating categories, the Discover it® Student Cash Back is a far better card.

Both cards offer the same "double your rewards at the end of the first year" perk for new cardmembers.

Discover it® Student Cash Back vs Chase Freedom®

The Chase Freedom® is a card which works in a similar way to the Discover it® Student Cash Back. There are rotating categories, which give 5% cash back on certain purchases during certain times of the year – exactly like the Discover it® Student Cash Back. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.. The one thing the Chase Freedom® has over the Discover it® Student Cash Back is the sign-up bonus. The Chase Freedom® cardholders are given the chance to earn $150 if they spend $500 within 3 months of receiving their card.

Discover it® Student Cash Back vs Citi® Double Cash Card – 18 month BT offer

Citi® Double Cash Card
This product is not available through ValuePenguin.
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The Citi® Double Cash Card – 18 month BT offer is one of the best cash back cards around. As mentioned previously, the Discover it® Student Cash Back falls into the ‘rotating category’ type of cash back credit cards. The Citi® Double Cash Card – 18 month BT offer is one of the best cards which fall into the opposite camp – flat rate cash back. No matter when or how you use your Citi® Double Cash Card – 18 month BT offer, Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay.

For a consumer who is not concerned about working to maximize the value of their card, by making purchases at optimal times and for optimal categories, the Discover it® Student Cash Back can have more value. However, if you simply want a no-hassle card which provides great rewards, then the Citi® Double Cash Card – 18 month BT offer is a no brainer.

Discover it® Student Cash Back vs Blue Cash Everyday® Card from American Express

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The Blue Cash Everyday® Card from American Express follows the same flat rate with $0 annual fee () structure of the Citi® Double Cash Card – 18 month BT offer. Users earn 3% cash back at US supermarkets (capped at $6,000 per year), 2% back at U.S. gas stations, and 1% back everywhere else. This structure is more difficult to manage than something like the Citi® Double Cash Card – 18 month BT offer, however it is still simpler to keep track of than Discover it® Student Cash Back changing categories. Students should look to their spending patterns and which merchants they frequent to guide their decision between the two cards.

For rates and fees of the Blue Cash Everyday® Card from American Express, please click here

Bottom Line: Is the Discover it® Student Cash Back Worth It?

Students looking for their first credit card have a lot to gain by applying for the Discover it® Student Cash Back. This card requires a certain level of involvement and monitoring in order to maximize its value. If consumers are looking for less hassle and a flat rewards, at the cost of losing a few bonus categories, the Discover it® Student chrome may be a better option. Ultimately, the Discover it® Student Cash Back is a fantastic card for building credit, regardless of which variant you choose to go with.

Resources for Discover it® Student Cash Back

How do I use my cash back at Amazon.com?

To see how to use Discover it® Student Cash Back cash back credit on Amazon, follow this link: https://www.amazon.com/gp/shopwithpoints/marketing.html?ie=UTF8&inc=cbbusage&pr=swpdfscbb.

How do I apply for the Discover it® Student Cash Back?

To apply, visit Discover's website.

How do I check my FICO score, if I am already a Discover it® Student Cash Back cardmember?

You can check your credit score at any point by logging into your Discover online account, through card member services. You can also see your most recent credit score printed on your monthly statement.

The information related to the Chase Freedom® has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.

Joe Resendiz

Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.

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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).