[DISCLOSURE: Cards from our partners are mentioned below.]
Twenty bucks may not be enough to motivate some students to study more, but what college student wouldn’t want some extra money, just for getting decent grades?
For students looking to get a credit card, that may be an option. Discover recently announced a $20 statement credit for new student cardholders who get at least a 3.0 GPA (or their school’s equivalent) for every year they’re enrolled in school (up to five years). The promotion applies to students who open a Discover it Student chrome or Discover it Student Cash Back after July 23, 2015, and the bonus is available within the first five years of opening the account. Both cards require only fair credit (read more about how to get a credit card with fair credit) and already offer cash-back rewards on everyday purchases, regardless of the cardholder’s grades, though cardholders have to apply to redeem the good-grades bonus.
This program can be a nice perk for students, but only if the credit cards are used responsibly. The cards have a promotional 0% APR on purchases within the first six months, and an APR between 14.49% - 23.49% Variable on purchases & balance transfersafter that (your APR depends on your credit standing). The cash-back rewards and that good-grades bonus aren’t worth it if you’re carrying a balance and racking up interest charges on those transactions. As is the case with most rewards credit cards, you can wipe out any rewards you earn if you carry a balance. Before you apply for a new credit card (or any credit), take a look at where your credit stands. You can get two free credit scores every 14 days on Credit.com.
It’s easy to get excited about credit card rewards, because they can be quite valuable, but it’s also really easy to slip into credit card debt and let it get out of control. Once you get into credit card debt, it can take years to get out, and you may never get to recoup the money you’ve spent financing all those little purchases. If you’re in credit card debt, you can use this credit card payoff calculator to see how long it will take you to pay down your balances and how much money you can save by paying them off faster.
On the other hand, credit cards can serve students extremely well, because they’re often the first form of credit a student can get, which helps establish a credit history. If you keep your credit card balance as low as possible relative to your credit limit and make the bill payments on time, you’re creating a positive credit history, which can help you later on when you’re applying for an apartment, financing a car or buying your first home.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
At publishing time, the Discover it Chrome for Students and Discover it for Students credit cards are offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.
More on Credit Cards:
- How to Get a Credit Card With Bad Credit
- An Expert Guide to Credit Cards with Rewards
- How Secured Cards Can Help Build Credit