Posted by: John S Kiernan

Rating: 4.7 / 5

The Verdict: As a student (or perhaps a concerned parent) looking for a credit card, your top priority should be to find a no-annual-fee offer for which you have a high likelihood of approval. Beyond that, some rewards for using the card or 0% financing would be nice.

Well, the Discover it Credit Card for Students and its sibling, the Discover it Chrome Student Credit Card, check all those boxes. In addition to their lack of annual membership fees, these Discover student credit cards offer at least 1% cash back on all purchases and 0% interest on all new purchases for the first six months your account is open. Both will also double whatever rewards you earn during the first year.

The only question is how you’ll accumulate those earnings. The standard Discover it Student Card supplements its 1% cash-back rate with 5% back on the first $1,500 you spend in bonus categories (e.g., Amazon.com purchases) that change on a quarterly basis, thus rewarding you as much as $75 every three months. The Chrome version gives you 2% back on the first $1,000 you spend at gas stations and restaurants each quarter with no other limitations.

Either it card is a solid choice for a student’s first credit card, with the decision between the two coming down to whether you’d prefer consistent rewards for gas and dining or higher earning potential in rotating bonus categories. And you can learn more about the tradeoffs between these two offers as well as how they compare to other student credit cards below.

The Highlights

• Big-Time Bonuses: The standard Student it Card offers 5% back on the first $1,500 spent in rotating bonus categories each quarter. Chrome gives you 2% on your first $1,000 in gas and restaurant spending each quarter.

  Those are pretty good deals in their own right, but they’re made infinitely more attractive by Discover’s offer to double your total first-year earnings. According to WalletHub calculations, this generous feature could be worth an extra $300 for standard Student it cardholders and $80 for Chrome users, based on their $500 minimum credit lines. 

• Market-Average Base Earning Rate: The average cash back credit card — across the whole market, including offers for people with good and average credit — yields roughly 1.02% of the amount spent. The it cards offer 1% as their base earning rate, applicable to all purchases that don’t fit into quarterly bonus categories. That’s not too bad for a college student. But since most student cards offer similar rates, what really matters is how well the bonus categories complement your spending habits. 

• 0% APR On Purchases For The First 6 Months: College (and post-college) life can be quite expensive. So if you have any upcoming big-ticket expenses (e.g., a new laptop) that will take you a few months to pay off, this 0% intro rate could certainly come in handy. Just make sure to use a credit card calculator to avoid carrying a balance past the end of the promotional period and always pay at least the minimum amount by the due date to avoid paying interest or late fees (Discover will forgive only your first late payment). 

• No Annual Fee: Given that good, or even excellent, credit can be achieved for free by sustaining good financial behavior over time, there’s little reason to pay an annual fee if you can avoid it. This is especially true for people with limited credit, such as students, because a fee typically doesn’t give you too much additional value (e.g., better rewards or financing terms). Put differently, the it cards will save you about $16.78, which is the average annual fee for current offers on the market, according to WalletHub’s latest Credit Card Landscape Report.

The Lowlights

• Potential For A High Regular APR: Your interest rate, or APR, could be as low as 13.49% or as high as 22.49%, depending on your credit standing. Put in other terms, you could pay as little as someone with excellent credit would expect (13.16%, the market average) or quite a bit more than the average person with fair credit (22%). If this is your first credit card or don’t have any good financial history established under your Social Security number, you’re likely to pay the higher end of that range.

  Neither rate is cheap, however, which is why you do not want to carry a balance from month to month with an it card past the 0% promo period. 

• Relatively Few Merchants Accept Discover: Discover is one of four major credit-card networks. It is more widely accepted than American Express, but less so than Visa and MasterCard. So you should always have a backup payment method just in case. That or you could always check if your favorite stores accept Discover beforehand, but that would mean more homework for you.

Other Things To Consider

• Unrestricted Rewards Redemption: You can redeem it card earnings whenever you’d like, with no minimum threshold amount required, and your earnings will never expire as long as your account is open and in good standing (i.e. no late payments, no fraudulent activity, etc.). This enables you to benefit whenever the mood strikes you, in sharp contrast to many other rewards credit cards that require, for instance, $25 in earned cash back before you can redeem. 

• $20 For A 3.0+ GPA: It literally pays to earn good grades. Each year that you maintain a GPA of 3.0 or higher as a full-time undergraduate or graduate student, Discover will pay you $20. Think of it as a free tank of gas or a free movie and popcorn. They’ll even throw in a buffer, allowing you to earn this bonus for up to five years that you earn good grades. 

• Rewards Never Expire: Many credit cards steal your unredeemed rewards if you don’t use your account for a certain period of time, and most apply a use-it-or-lose-it approach to account closing. But Discover it for Students is a bit different. If you close your account or don’t use it for 18 consecutive months, your unredeemed rewards balance will be credited to you, either applying to an outstanding balance or being mailed in the form of a check. 

• No Foreign-Transaction Fee: The affinity of college students for international travel is cliché for a reason. And if you decide to live the stereotype on a spring break excursion or post-grad backpacking trip, you won’t get hit with a surcharge for foreign use. In fact, none of Discover’s credit cards have foreign-transaction fees.

  Just for your edification, the average foreign-transaction fee is currently 1.97%, about 7.5% cheaper than it was in the past year. 

• Initial Balance-Transfer Promo: If you open one of the it Cards and transfer a balance before June 10, 2017, the amount transferred will accrue interest at “only” a 10.99% rate for the first six months. It’s not the 0% intro rate that some other cards offer, but it is lower than the it cards’ 13.49% to 22.49% regular interest rate.

  This deal also is accompanied by a 3% transfer fee, which is important to factor in to your calculations. For example, if you transfer a $500 balance from another credit card to your Discover it Card, you would pay a $15 transfer fee in addition to the interest it would accrue for each day that you don’t pay off the remaining balance. 

• User-Friendly Features: Neither it card has a penalty APR, a late fee for your first offense or an overlimit fee (assuming you opt in for the ability to spend above your limit — not recommended). Furthermore, if your card is ever lost or stolen, you can get a free overnight replacement. None of these features are exclusive to the it cards, and many might never actually come into play, but they’re nice nevertheless.

Compared To The Competition

  Most major lenders are active in the student credit-card space, and competition is high for youthful applicants with years of above-average earning potential and financial needs ahead of them. In order to help you make the best choice for your wallet, we compared both Discover it Student Credit Cards to some of the most popular alternatives in terms of six fundamentally important categories. You can check out the results below.  

	Discover it For Students	Discover it Chrome for Students	Capital One Journey For Students	BankAmericard Cash Rewards for Students	Citi ThankYou Preferred for College Students
Annual Fee	$0	$0	$0	$0	$0
Initial Bonus	Rewards doubled the first year	Rewards doubled the first year	None	$100	$25
Ongoing Rewards	5% back on up to $1,500 in quarterly bonus-category purchases 1% back on all purchases $20 annual good-GPA bonus (up to 5 years)	2% back on up to $1,000 spent at gas stations and restaurants each quarter 1% back on all other purchases $20 annual good-GPA bonus (up to 5 years)	1% back on all purchases (1.25% with on-time bill payment)	3% back on gas and 2% back on groceries for the first $2,500 in combined purchases each quarter 1% back on all other purchases 10% bonus for redeeming into a Bank of America checking or savings account	2% back on dining and entertainment 1% back on all other purchases
2-Year Rewards Earnings*	$540	$270	$150	$210	$210
Intro Financing	0% for 6 months on new purchases; 10.99% for 6 months on balance transfers (3% balance-transfer fee)	0% for 6 months on new purchases; 10.99% for 6 months on balance transfers (3% balance-transfer fee)	None	0% on purchases and balance transfers for the first 12 months (3% balance-transfer fee)	0% on new purchases for the first 7 months
Regular APR	13.49% to 22.49%	13.49% to 22.49%	20.49%	13.49% to 22.49%	14.49% to 24.49%
Editors’ Rating	5 Stars	4.5 Stars	5 Stars	To be reviewed by WalletHub	To be reviewed by WalletHub
Overall Winner	Discover it For Students                   Capital One Journey For Students

*In estimating each card’s rewards earning potential, we assumed $500 in monthly spending ($250 on gas and groceries/dining at restaurants, plus $250 on entertainment) and full repayment by the due date. Furthermore, we assumed that half of an it-Card user’s spending would qualify for bonus-category earning rates. We did not assume that a user has a bank account from a particular institution or earns a certain GPA.

from Wallet HubWallet Hub


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