Discover it Student Cash Back review: Earn 5% cash back in different categories while building credit

Whether you’re a student looking to build credit or a parent preparing to send your kids to college, a student credit card can help the next generation establish good financial habits.

Discover offers two credit cards geared toward college students: the Discover it® Student Cash Back and the Discover it® Student Chrome. Both cards are designed to help young adults build their credit history and learn financially responsible behaviors while in college but differ slightly in how they earn rewards.

Below, CNBC Select breaks down the rewards and benefits associated with the Discover it® Student Cash Back to help you decide if it’s right for you.

The Discover it® Student Cash Back makes for a good first credit card and provides an opportunity to earn cash-back rewards while you’re in college and building your credit history.

To qualify, you just need to be at least 18 years old, enrolled in a two- or four-year college, a U.S. citizen and have a Social Security number. You’ll also need to have verifiable independent income, like a part-time job and you may have to show proof of income.

Discover offers a $0 fraud liability guarantee and 100% U.S.-based customer service available around the clock.

Earning

The Discover it® Student Cash Back card allows cardholders to earn 5% cash back on the first $1,500 in purchases in rotating categories each quarter (when you activate), then 1% cash back. Check out Discover’s 5% cash-back calendar.

Here’s how it works: Upon activation, each quarter (January through March, April through June, July through September and October through December), you can earn 5% cash back on different categories, up to $1,500 in quarterly purchases (then 1%).

Once each quarter is over, the program resets and you’ll have another chance to earn 5% on up to $1,500 of spending in the new categories. Discover releases its annual 5% cash-back calendar at the start of each quarter. You have to enroll at the beginning of every activation period to earn the cash-back rewards.

Beyond the rotating 5% cash-back categories, you can earn unlimited 1% cash back on all other spending, with no limit.

It’s a little extra work, but earning 5% back, as opposed to 1% to 2% like with the Discover it® Student Chrome, usually makes it worth your while — if you are strategic.

Redeeming

When you’re ready to redeem your rewards, there are a number of ways you can cash out:

• Statement credits
• Electronic deposits to your bank account
• Gift cards, ranging from $5 to $200 and in increments of $5
• Charitable donations to select organizations

Your rewards never expire, but if you don’t use your card for 18 months, Discover will automatically apply your cashback to your account balance.

This card has no annual fee and no foreign transaction fees, which makes it a good choice for students studying abroad.

If you need to finance textbooks or dorm room essentials, you can take advantage of the 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 17.49% – 26.49% applies. We always recommend you pay your balance on time and in full in order to avoid interest charges.

You can maximize your cash back by pairing the Discover it® Student Cash Back card with another Discover card.

For example, with the Discover it® Student Chrome, you can earn 2% cash back at gas stations and restaurants (on up to $1,000 in combined purchases per quarter) and 1% on everything else. You’ll earn this elevated return year-round without needing to activate any bonus categories.

While not geared specifically to students, frequent travelers may appreciate the Discover It® Miles card. It earns 1.5X miles per dollar on all purchases, which you can redeem for travel purchases, cashback and more.

Consider pairing your card with a Discover bank account

If you want to do all your banking in one place, the Discover® Cashback Debit Checking account offers a debit card that earns 1.00% cash back on up to $3,000 in debit card purchases each month. You can also earn a generous return on your cash with a Discover® Online Savings Account.

Depending on your spending habits, there may be other student credit cards that offer a greater return on certain spending categories.

The Petal® 2 “Cash Back, No Fees” Visa® Credit Card is another option if you don’t have an established credit history. Unlike traditional cards that require a credit score, Petal evaluates your banking activity and other financial data to determine your eligibility. The card offers 1% cash back on eligible purchases right away, with the potential to earn up to 1.5% after 12 on-time monthly payments and 2% to 10% cash back at select merchants.

Learn more: Petal® 2 “Cash Back, No Fees” Visa® Credit Card

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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Petal® 2 Visa® Card is issued by WebBank

For rates and fees of the Discover it® Student Chrome, click here.

For rates and fees of the Discover it® Student Cash Back, click here.

For rates and fees of the Discover it® Secured Credit Card, click here.

For rates and fees of the Discover It® Miles, click here.