|Card Review||The Discover« Classic Student Card, issued by Morgan Stanley, is designed for those with an average or limited credit history who are looking for a cash reward credit card.
Through the reward program, cardholders can earn up to 2% in cash rebates for purchases made with the card. As with many cash reward related programs, however, the amount spent on the card reflects the cash rebate earned.
Those who spend up to $1,500 (or if purchases are made at select warehouse clubs and discount stores) will receive a .25% rebate, those who spend between $1,500 and $3,000 will receive a .5% rebate, and those who spend over $3,000 will receive a 1% rebate.*
In addition to the standard cash rebate payout, earned rebates are worth double their value at participating retailers through the Cashback Bonus« award program. The card also has no annual fee. The APR for this card varies, so applicants should review the terms and conditions provided by the card issuer.
Finance charges applied use the "Two Cycles Average Daily Balance" method, which is a more costly method in applying finance charges to those who may occasionally carry a balance as compared to the "Average Daily Balance" method used by most card issuers. Also, there is no introductory rate offered (the Discover« Platinum Card offers a 0% introductory rate).
Therefore, those who plan to spend at least $3,000 a year (to earn the 1% cash rebate), plan to use their Cashback Bonus« award at participating retailers (to earn double cash rebates), and plan to pay in full each month (to avoid costly finance charges), will benefit most from what the Discover« Classic Student Card has to offer.
Students who plan to carry a large balance should consider a lower interest rate card (one that applies the "Average Daily Balance" method), as any finance charges saved will be more than any cash rebates earned.
* It is important to note that like many cash reward cards, the highest rebate offered will not apply to all purchases made with the credit card. In this case, 1% will only be applied to those purchases made after the cardholder spends over $3,000 in one year, so the overall cash rebate earned will be less than 1%, depending on the amount spent. For instance, if the cardholder were to spend $4,000, only $1,000 of this amount would be applied towards the 1% rebate. However, this does not take into account any promotional offers or the 2% Cashback Bonus« award.|