Discover Student Credit Card Review

The Discover Student Card has one of the best cash back plans of any rewards card out there: 5% cash back at select merchants.  Most other rewards cards offer 2% cash back at most.  Cardholders can also double rebate points by trading them in for gift certificates or gift cards.  The card also has a lower APR than other credit cards for students.

Rebate Plan: In addition to 5% cash back for purchases at a number of different outlets, such as Office Depot, Lowes, the Gap, Marshall’s, Pier 1 Imports, and a host of other locations, the Discover Student Card has a tiered approach to cash rebates.  A 1% rebate on all purchases kicks in after the first $3000 in purchases.  Up until that point, cardholders will get .25% for the first $1500 spent on the card and .50% for the second $1500.  Cardholders can earn up to $500 in rebates a year.  To calculate that out: .25% of $1500 is $375, so the card would not be maxed out after the first $1500.

Double Cash Back Bonuses: One of the best features of the card is double cash back bonuses.  Cardholders can exchange rebates for gift cards at 60 different select merchants.  This averages out to 2% cash back for purchases – a very generous rate.  The best way to use the card is to cash in small amounts of rebates.  So, for example, if you have $20 in rebates built up after a small number of purchase, you can trade these in for a $40 gift card.  Select merchants include:

Shop Discover: The Discover Student Card is eligible for increased discounts at merchant partners that can be accessed from Discover’s website.  A number of these merchants are perfectly suited for student purchases: such as 7% cash back at Barnes and Noble or a 5% discount at Overstock.com.  Purchases at discount outlets earn an additional .25% cash back.

APR and Annual Fee: In addition to the above bonuses, the Discover Student Card has a lower APR than most other student cards – which usually have a steep APR.  There is also no annual fee for the card and a two-cycle average for determining balance.

Conclusion: Usually a card that has minimum payments before starting a cash rebate program is not all that positive.  The value of the Discover Student Card is not necessarily in the cash back percentages, but how each cardholder chooses to use the card.  If a cardholder never spends money at merchant partners, the cash back program is not all that impressive.  However, if the student adeptly makes purchases from affiliated merchants and trades in cash rewards for double rewards, the card is highly competitive when measured against other student cards.