Is the Discover Student Card Right for You?

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A male college student standing in a library, reading a book. With the Discover Student Card he could by that book

When you're headed off to college, you can be confident that some expenses will sneak up on you. Fortunately, the Discover Student Card is here to help you out.

The cost of books is astronomical. Gas prices seem to just get higher. Plus, let's face it -- no matter how much you tell yourself you're not going to, you're going to run off to Taco Bell with your friends. Sure, you have a job. That won't necessarily cover your month-to-month expenses all the time, but that's why an emergency credit card is great.

Why Do I Need a Credit Card?

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Credit cards can be useful when you can's cover expenses one month but will be able to over time. Let's say something big pops up in January a credit card will allow you to take care of it and pay it off over time. That means you can pay for those lab materials or buy a new computer when yours dies without freaking out about not having cash on hand.

You should, of course, take caution. While you can "float" some expenses to the next month with a credit card, you probably should not run up your balance "just because." Otherwise, you'll find yourself with a mountain of debt you have to beg your parents to pay off. If they don't help, you're going to have to pick up more hours at work or get another job. But a credit card is an excellent way to stave off those extra expenses that pop up from time to time. Just make sure you use credit cards, like the Discover Student Card, responsibly to get the most out of them.


Building your Credit

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Perhaps the most important reason to get a credit card beyond managing expenses is the opportunity to build your credit. Your FICO (Fair Isaac Corporation) score is going to be very important very soon. Banks use this number to determine your creditworthiness when you apply for a car loan or, eventually, attempt to purchase a home.

Insurance companies also use your credit history, for better or worse, in determining how safe of a driver you are. While this may not make much sense to you, it's a great idea to build up a good credit history sooner than later.

When you make payments on time or if you miss a payment, the information is reported to the three major credit bureaus: Equifax, Experian, and TransUnion. Depending on how responsible you are, this can help or hurt you. If you're smart about it, it will help.

Responsible use of a credit card is an excellent way to build credit. You'll want to keep a low balance on your card month to month and always make your payments on time. If you use your card and make payments when you should, you will watch your credit score rise over time.

If you have the Discover Student Card, you'll be happy to know that you'll get your FICO Credit Score for free on your monthly statements, the mobile app, and online. That way you'll always know where you stand.


The Discover Student Card

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Discover designed the student card for college students or others who are just starting out credit-wise. You won't pay an annual fee with the Discover Student Card, so there's no cost to carry it.

The Discover It Student Cash Back card offers 5 percent cash back in categories that rotate every quarter. Recent categories have been gas stations, grocery stores, and Amazon -- so the categories are generally useful. One major drawback is that you have to remember to activate the bonus cash back every quarter.

The Discover Student Card has a lot of features and benefits that make it among the best cards for college students seeking to establish credit. It has great cash back rewards, low fees, and excellent tools for managing your credit.


No APR for six months

Your first six months with the Discover Student Card will be interest-free. But you should not rack up a balance, as the APR (annual percentage rate) then becomes a variable 14.49 percent to 23.49 percent. If you already have debt elsewhere, the Discover Student Card offers a 10.99 percent intro APR for six months if you move the balance to this card.

One great feature of the Discover Student Card is that the company will forgive your first late payment. That is great because the late payment fee is around $37, which is a considerable chunk of change for most college students.


Money in the Pocket

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Discover will match your cash back dollar-for-dollar at the end of your first year, automatically. It is a great incentive to use your card. But once again, be sure to use it responsibly. All that bonus cash back doesn't do you any good if it's all eaten up by interest charges.

One awesome benefit of the Discover Student Card is the Good Grades Rewards. Every school year for up to five years that you maintain a 3.0 GPA or higher, Discover will give you a $20 statement credit.

If you're planning to study abroad, you'll be glad to know that there are no foreign transaction fees. Unfortunately, merchants overseas don't widely accept the Discover Card. That means you may not have an easy time using it if you go to school across the pond.


Safety is key

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You'll be happy to know that Discover takes your security seriously. You'll have the ability to switch your card on and off in seconds if you misplace it. It will prevent new purchases, cash advances, and balance transfers and give you peace of mind. In addition, you will receive free social security number alerts. Discover will make sure you know about it if your information is used at any of thousands of risky websites.

Stellar customer service

One of the Discover Card's major strengths is its customer 100 percent U.S.-based service. A 2017 J.D. Power and Associates customer satisfaction survey ranked Discover second-best (only slightly behind American Express) in customer service. Customers say their experience with Discover is well above the industry average. Discover has been jockeying with American Express for top customer service for years and came out on top in 2016 and 2015. They tied in 2014 and 2013.

Drawbacks of the Discover Student Card

As we mentioned, one of the Discover Student Card's major flaws is that you need to remember to activate the additional cashback. If you're the forgetful sort, you won't get the most out of this card. And you won't just see the Discover Card receive a lukewarm reception overseas. Merchants in the United States, including Costco, aren't quite as keen to accept Discover as they are Visa and MasterCard. 

That's because Discover, like American Express, generally charges stores more to take their card than other companies do.

Discover used to allow a parent to co-sign on the account to make it easier to get approved. But the company ended this practice at the end of 2016. That can make it harder to get the card than it used to be, especially when we consider that simply being a student used to be enough to qualify you for a student card. But tighter regulations have made it more difficult for college students without a full-time job to get a credit card, so the inability to have a co-signer is a pretty serious flaw.

Alternative to the Discover Student Card

The Discover It chrome card is a great alternative for those who find the rotating cash back structure too limited. The chrome card offers two percent cash back at gas stations and restaurants up to $1,000 each quarter. You will also earn unlimited one percent cash back on all other purchases. It can be a great way to offset interest charges or put some cash back in your pocket if you pay your balance off each month. 

This card is especially attractive for students who commute to campus because of the bonus cash back on gas.


Should I Get the Discover Student Card?

If you're gainfully employed and ready for the responsibility of a credit card, you'll find the Discover Student Card to be an excellent choice for you, overall. Credit cards can help manage your expenses and build your credit. But they can also help you get over your head in debt if you're not careful.

Discover's rewards aim to provide college students with bonuses in categories that are common expenses for them. Also, Discover gives you a lot of tools to manage your credit and know your FICO credit score.

While you may have problems getting approved for this or any credit card when you are just starting out, you'll find few credit cards that are as feature-packed as the Discover Student Card. Also, the lack of an annual fee makes it a convenient tool to carry around in case of emergencies.

 

Featured image: CC0, by geralt, via Pixabay

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