Just about any student credit card can help you build credit. But getting the right one can mean earning extra perks and bonus rewards on things you buy every day.
If you’re interested in getting a Discover student credit card, you’re on the right track. But there are two cards, so you’ll need to compare their features and your spending habits to find out which ones is best for you.
Discover student credit cards review
There are two Discover student credit card options: the Discover it for Students and the Discover it Chrome for Students.
For the most part, these cards have the same features. The only differences are in their rewards structures. Here’s how they break down:
Neither card charges an annual fee, which is essential for a starter card. Here are some other perks you’ll get with both cards:
- Cash-back match: Discover will match all the cash back you earn during the first year. So, if you earn $50 during the first year you have the card, you’ll get a $50 bonus on your anniversary.
- Rewards for good grades: You’ll get $20 in cash back each year your GPA is 3.0 or higher.
- Introductory APR promotion: You’ll pay a 0% APR on purchases for the first six months.
- Free FICO credit score: Using a credit card is a great way to build your credit as long as you’re paying off your bill in full each month. With free access to your FICO score, you can see how your actions help or hurt your credit.
How to pick the right Discover student credit card
Because these cards are so similar, the main question is how you spend your money.
As a college student, you might think that sounds like a joke. After all, you need to have money to spend it, right?
But if you take a step back, you might see there’s an opportunity to earn bonus rewards on some of your purchases.
For example, the Discover it Chrome for Students card is focused on rewarding restaurant and gas station purchases. Take a look at your expenses in these categories for the last couple of months and tally up how much you spent on those categories.
Then, multiply the monthly amount by 2 percent (0.02) to see how much you would’ve earned on those purchases. If you think the amount is significant enough, the card is worth considering.
For example, say you spend $500 per month on your credit card, with $200 of it going to restaurant and gas station purchases. Here’s how your rewards will break down:
$200 x 2 percent = $4
$300 x 1 percent = $3
Total cash back rewards per month = $7
With the Discover it for Students, things can get more complicated. Since the card’s bonus categories change every three months, you have to review your spending for multiple categories to see if the card is worth it.
Here’s the full 2017 cash-back calendar:
Note that two of the categories are gas stations and restaurants. The only drawback is that they’re not bonus categories all year long like they are with the Discover it Chrome for Students.
The good news is even if you don’t spend as much on these other categories as you do on gas stations and restaurants, you’re getting 5 percent cash back rather than 2 percent.
So, if you spend $500 on Amazon during the fourth quarter of 2017, you’ll get $25 cash back. You’d have to spend $1,250 at gas stations and restaurants with the Discover it Chrome for Students to get the same amount.
Picking the best Discover credit card for students ultimately comes down to your spending habits and a judgment call.
How to use your Discover student credit card
Once you’ve chosen the right Discover student credit card for you, it’s critical to learn good credit habits to avoid losing money. For example, paying interest can wipe out any of the value you’re getting from the card’s rewards.
Here are some habits to develop once you get your card.
Pay off your balance in full each month
Despite what you might hear, there’s no benefit to carrying even a small balance on your credit card. You can build credit without paying a dime in interest as long as you pay your balance on time and in full each month.
Set up autopay
Between classes, studying, work, and socializing, college students have a lot on their plates. To avoid accidentally forgetting to make a payment, set up automatic payments from your checking account.
Get on a budget
The danger of overspending with a credit card is real. Even with a small credit limit, you can end up charging more to the card than you can pay off if you’re not paying attention.
To simplify things, use a budgeting app to track your purchases and set limits on spending.
Stay well below your credit limit
How much you owe makes up a sizable chunk of your credit score. If you have a high balance on your credit card, it can signal that you’re using too much credit. Try to keep your balance below 30 percent of your credit limit to avoid a credit ding.
If you follow these tips, you’ll be on your way to building your credit from scratch and earning solid rewards along the way, regardless of which card you choose.
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