Discover it Student Cash Back benefits guide

Back in the day, credit card companies used to get people to sign up for their products on campus by offering cheap perks like frisbees or T-shirts. Those days are long gone, but credit card companies can still offer enticements for students to sign up — in the form of card perks and bonuses.

Enter the Discover it® Student Cash Back card, which comes with student-friendly perks and benefits that not only help you earn rewards but help you build your credit responsibly, too. If you’re new to credit cards, though, it can be easy to get confused regarding those perks. We’ll walk you through the full suite of Discover it Student Cash Back benefits so you can take advantage of all it has to offer.

You’ll earn great rewards

The Discover it Student Cash Back card has a rewards program that’s essentially the same as the full-fledged, non-student version of this card, the Discover it® Cash Back. Both of these are well-known in the industry for having a great rewards program with a first-year, cash back matching bonus.

With the Discover it Student Cash Back, you’ll earn twice the normal amount of cash back during your first year because Discover matches your cash back earnings for a first-year bonus. So, if you spend enough to earn, say, $150 in cash back in your first year, you’ll end up getting $300.

You’ll earn a minimum of 1 percent cash back on all purchases. But because it’s a rotating category card, you’ll have the opportunity to earn a much higher rate —  5 percent cash back — on spending in certain categories that change each quarter (on up to $1,500 per quarter, then 1 percent, with enrollment required).

Discover publishes a cash back rewards calendar each year that outlines what the bonus categories are each quarter. To earn that 5 percent cash back for the quarter, you’ll need to log in to your account and activate the bonus category. If you forget to activate it, you won’t earn the higher rate, even if you do spend money in that category.

The fees are reasonable

Another thing that makes this such a student-friendly card is that you won’t have to pay much for it. Here’s a breakdown of the fees that are particularly important to you as a student:

Annual fee

The Discover it Student Cash Back card doesn’t have an annual fee. That makes it free to keep open, and that’s a good thing for building credit.

As you grow and move on to bigger and better cards in the future, keeping this card open will anchor your credit history so that it stretches as far back as possible. This can help grow your credit score so that by the time you’re ready to apply for a mortgage or a car loan, for example, you’re in the best position possible.

Interest rate

You won’t pay any interest on new purchases for the first six months after you open the card. That makes it a great time to buy things you might need that you’re not able to afford with savings or student loans, like outfitting your dorm room or moving across the country.

If you make sure to pay it all back before the six months are up, it’s essentially an interest-free loan. At the end of the introductory period, the regular 17.49 percent to 26.49 percent variable APR will apply.

Free pass on first late payment

The first time you make a late payment, Discover won’t charge you a fee. After that, it’s a $41 charge each time you pay late. This allows you some sort of a pass if you’re new to making payments, but you’ll still pay in the form of a hit to your credit score.

Paying late can seriously damage your credit, and that’s especially true if you’re just starting to build credit. To play it safe, don’t count on this feature too much. Instead, set all your payments on autopay for the minimum amount, and, ideally, pay your full statement balance each billing cycle.

No foreign transaction fee

Credit card companies often charge foreign transaction fees of around 3 percent when you swipe your card abroad. This card doesn’t come with that fee, which makes it handy if you’re heading to another country for a short trip or a study abroad program.

Unfortunately, though, Discover isn’t as widely accepted abroad as Visa, so if travel is calling your name, check whether Discover is accepted where you’ll be going. If not, you may want to consider another card with no foreign transaction fees.

You’ll get credit-building and safety perks

As a college student, you might be nervous about getting your first credit card, and that’s understandable. If so, you’ll like the safety features of the Discover it Student Cash Back card. If you lose the card or it’s stolen, you can easily switch it off in the app or your online account so that no one can use it.

Discover also provides you with a free, regularly updated FICO credit score so you can see in real time how your credit-building efforts are going. It also maintains a few free credit-monitoring services to alert you if anything fishy is happening. For example, Discover monitors the dark web for your Social Security number to notify you if it’s for sale so you can take steps to protect yourself.

As more of the world becomes digitally connected you might be concerned about people being able to find your personal details, especially if you’re moving around between home and college life a lot. To help ease those concerns, Discover is now offering a free Privacy Protection feature you can switch on in the app to have your name and personal information removed from up to 10 popular people-finding websites.

How to maximize your Discover it Student Cash Back benefits

The Discover it Student Cash Back card comes with a ton of great features that most students will really appreciate. If you’re interested in learning how to use rewards cards, it’s a great option.

If you want to build credit, set up a small bill on autopay to be charged to your credit card each month, such as a Netflix or Spotify subscription. Then, set up your bank account to autopay your credit card for the amount of that small charge.

That way, you’re setting the whole system up on autopilot to help you build credit. Feel free to charge other items to your card (especially if you need to buy something that’s within the quarterly bonus categories), but remember to pay those off on time, too. That way, you’ll earn all the benefits and rewards without having to pay any interest or fees. If you can set this habit in place early, you’ll see a lifetime of affordable perks that pay you back in spades.

Bottom line

College is a great time to start building your credit because by the time you graduate, you’ll already have a leg up. You’ll understand how to use debt responsibly and how to use credit card rewards, and you’ll have a good credit score to boot. College is a safe time to experiment with how you’ll run the rest of your life, and if that includes credit cards, the Discover it Student Cash Back card is a great choice.