Discover It Student Cash Back Vs Secured
Choosing the right credit card is critical, especially for students building their credit history. The Discover it Student Cash Back and Discover it Secured cards offer distinct paths, but understanding their differences is paramount before applying.
This article dissects these two popular cards, outlining their core features, benefits, and drawbacks. It will help students make informed decisions aligned with their individual financial situations and credit goals.
Discover it Student Cash Back: Rewards and Responsibility
The Discover it Student Cash Back card is designed for students with a limited credit history but who possess a reasonable expectation of approval. This card offers a rotating 5% cash back bonus on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate.
After the first year, Discover automatically matches all the cash back you’ve earned. There's no annual fee and a standard variable APR applies.
Key Features:
- Cash Back Rewards: 5% rotating categories, 1% on all other purchases.
- Welcome Bonus: Discover matches all the cash back earned in the first year.
- Fees: No annual fee.
- APR: Variable, based on creditworthiness.
Eligibility for this card typically requires a fair to good credit score. Income and employment status are also factors considered during the application process.
Discover it Secured: Building Credit from Scratch
The Discover it Secured card caters to students with no credit history or those looking to rebuild their credit. It requires a security deposit, typically ranging from $200 to $2,500, which becomes your credit line.
Cardholders earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
Key Features:
- Security Deposit: $200 - $2,500 (determines credit line).
- Cash Back Rewards: 2% at gas stations and restaurants, 1% on all other purchases.
- Fees: No annual fee.
- APR: Variable, based on creditworthiness.
- Credit Building: Reports to all three major credit bureaus.
After demonstrating responsible credit use, Discover may offer to convert the secured card to an unsecured card and return the deposit. This offers a pathway to establishing a positive credit history.
Direct Comparison: Which Card is Right for You?
The choice hinges on your existing credit profile. If you have some credit history and confidence in your approval odds, the Discover it Student Cash Back card provides a better return on spending.
However, if you're starting from scratch or have past credit challenges, the Discover it Secured card is a safer, more accessible option for credit building.
Consider your spending habits and financial discipline. Both cards demand responsible usage, meaning paying your bills on time and keeping your credit utilization low.
According to Discover, both cards offer tools like the Credit Scorecard. The Credit Scorecard allows you to monitor your TransUnion credit score for free, even if you're not a Discover customer.
Next Steps
Carefully review your credit report and financial standing. Then, visit the Discover website to explore each card's detailed terms and conditions.
Compare the APRs, reward structures, and eligibility requirements. Armed with this information, you can confidently select the card that best aligns with your financial goals and sets you on the path to credit success.
