Discover Student Credit Cards: A Comprehensive Guide to Benefits and Rewards
For students venturing into the world of personal finance, a student credit card can be a valuable tool. It serves as a stepping stone to building credit, learning responsible spending habits, and gaining financial independence. Discover offers credit cards specifically designed for students, packed with benefits tailored to their needs. This article delves into the advantages of Discover student credit cards, helping you make an informed decision about whether they are the right choice for you.
Introduction to Student Credit Cards
A student credit card is designed to help college students build credit and manage their finances responsibly. These cards often have features that cater to students' unique circumstances, such as lower credit limits and rewards programs aligned with student spending habits. Using a student credit card and paying off balances on time can establish a positive credit history, which is crucial for future financial endeavors like securing loans or renting an apartment.
Key Benefits of Discover Student Credit Cards
Discover offers two primary credit cards for students: the Discover it® Student Cash Back and the Discover it® Student Chrome. Both cards come with several benefits that make them appealing options for students:
- Building Credit: Both the Discover it® Student Cash Back credit card and the Discover it® Student Chrome credit card helps you build your credit history with responsible use.
- No Annual Fee: All Discover cards, including student cards, have no annual fee, saving students money.
- Cash Back Rewards: Discover student cards offer cash back rewards on purchases, allowing students to earn money back on their spending.
- Introductory APR: Discover offers a 0% introductory APR for 6 months on purchases and 10.99% for 6 months on balance transfers. After that, the regular APR of 16.49% to 25.49% Variable applies.
- No Foreign Transaction Fees: All Discover cards have no foreign transaction fees.
- Cashback Match: Discover automatically matches all the cash back you’ve earned at the end of your first year.
- 24/7 Customer Service: Discover provides round-the-clock customer service to assist cardholders with any questions or concerns.
- Mobile App: Discover's mobile app allows users to easily manage their accounts, track spending, and monitor their FICO® Credit Score.
- Free Credit Reports: Everyone can access a free credit report from the three major credit reporting agencies and Discover provides educational resources to help you learn more about how to manage your credit accounts and develop good credit habits.
Discover it® Student Cash Back: Rewarding, but Requires Organization
The Discover it® Student Cash Back card is a good credit card for students with limited credit history or no credit score who want to earn bonus rewards without paying an annual fee. This card offers a unique rewards structure that can be highly beneficial for organized students.
- 5% Cash Back in Rotating Categories: Cardholders earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate.
- Activation Required: To earn the 5% cash back, cardholders must activate the bonus categories each quarter.
- 1% Cash Back on All Other Purchases: All purchases outside of the bonus categories earn an unlimited 1% cash back.
- First-Year Rewards Match: Discover matches all rewards earned during the first year the card is open.
While the 5% cash back rewards can be lucrative, they require active participation and organization. Students must remember to activate the bonus categories each quarter and align their spending with those categories to maximize their rewards.
Read also: Understanding Student Credit Card APR
Discover it® Student Chrome: Straightforward Rewards
The Discover it® Student Chrome card offers a simpler rewards structure compared to the Cash Back card. This card is a good choice for students who prefer consistent rewards without the need for quarterly activation.
- 2% Cash Back at Gas Stations and Restaurants: Cardholders earn 2% Cashback Bonus® at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically.
- 1% Cash Back on All Other Purchases: All other purchases earn an unlimited 1% cash back.
- First-Year Rewards Match: Discover matches all rewards earned during the first year the card is open.
The Discover it® Student Chrome card is a straightforward option for students who frequently spend on gas and at restaurants. The automatic rewards make it easy to earn cash back without any extra effort.
Eligibility and Approval
Discover student credit cards are designed for students with limited or no credit history. While there is no official minimum credit score requirement, students must be at least 18 years old and enrolled in a 2- or 4-year college or university.
To be eligible, students must provide personal information, such as their name, date of birth, home address, and school information. Discover will also consider factors such as income, recent credit inquiries, and the number of open Discover accounts.
While Discover student cards are generally easier to get approved for compared to regular credit cards, approval is not guaranteed. Negative entries on a credit report, such as late payments or collections, can decrease the chances of approval. Discover declined my approval for the Student card. Reason-Collection.
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Managing Your Credit Card Responsibly
Using a student credit card responsibly is crucial for building a positive credit history. Here are some tips for managing your credit card wisely:
- Pay Your Bills on Time: Paying your credit card bill on time every month is the most important factor in building credit.
- Pay More Than the Minimum: Paying more than the minimum payment can help you avoid interest charges and pay off your balance faster.
- Keep Your Credit Utilization Low: Credit utilization is the amount of credit you're using compared to your credit limit. Aim to keep your credit utilization below 30%.
- Avoid Overspending: Only charge what you can afford to pay back each month.
- Monitor Your Credit Report: Regularly check your credit report for any errors or signs of fraud.
Alternatives to Discover Student Credit Cards
If you're not eligible for a Discover student credit card or prefer other options, here are some alternatives to consider:
- Secured Credit Card: A secured credit card requires a cash deposit as collateral, making it easier to get approved for those with limited or bad credit.
- Authorized User: Becoming an authorized user on someone else's credit card account can help you build credit without having to apply for your own card.
- Regular Credit Card: If you have an established credit history, you may be eligible for a regular credit card with more perks and rewards.
Expert Advice
To help people who are interested in the Discover it Student Cash Back card make an educated decision, WalletHub posed the following questions to a panel of experts.
- Which is better for students interested in a credit card: a flat rewards rate on all purchases or rotating bonus categories?
- How important is it for credit card companies to attract customers as students?
Experts like Valentinas Rudys, Professor at Weber State University, Joseph S. Ruhland, Ph.D., Professor and Department Chair at Georgia Southern University, Sanchari Ghosh, Economics faculty at Northeastern State University, Beth Hunsaker, Associate Director at the University of Utah, and Alexander Lewis in Accounting & Finance, offer valuable insights into the best credit card options for students.
Read also: Student Credit Card Application Guide
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