How Does Discover's Good Grades Program Work?

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Obviously, getting good grades is its own reward, but an extra $20 doesn’t hurt. That’s the pot of gold at the end of Discover’s Good Grades Reward rainbow. Simply put, earn a B-average or better (GPA 3.0 or an average grade of 85) and earn a $20 cash back bonus per academic year (September to August) for up to five years if you meet the eligibility requirements.

How to Qualify

There are a few hoops to jump through to earn the Good Grades Reward:

You must apply for and receive a Discover it or Discover it chrome card student card
You must be a new cardmember as of July 23, 2015
Your card application must state you are currently college-enrolled
You are indeed enrolled in a college or graduate school for the school year
You meet the 3.0 (or equivalent) grade point average in any term within the school year
You are up to date on your Discover credit card payments
Your Discover account is open when you apply for your cash back
You have collected less than five prior Good Grades Rewards

Applying for Your Reward

You have to submit information to Discover to receive your reward, but it’s a trivial exercise. Simply go to your account page on the Discover website and enter your GPA (or equivalent) for any term within the academic year — Discover may require documentation of your GPA. You’ll receive your cash back reward within two billing periods. Note that you have to apply separately if you are also eligible for Discover Student Loan Good Grades Rewards.

The Discover Student Cards

Discover offers two credit cards for students that qualify for the rewards program. They are:

Discover it Card for Students

This card earns 5 percent cash back, up to a quarterly maximum, in rotating quarterly categories such as restaurants, Amazon.com, gas stations, and more. You have to activate your cash back every quarter. In addition, you earn 1 percent cash back on all other purchases, without limit.

Discover it Chrome Card for Students

This card earns 2 percent cash back, up to quarterly purchases of $1,000 at restaurants and gas stations. Plus you get unlimited 1 percent cash back on all other purchases.

Round Up

These cards are attractive to students because they have no annual fee, require only an average credit score, charge 0 percent on purchases and 10.99 percent on balance transfers during the first six months, and waive the fee on the first late payment. The standard variable APRs on these cards currently range from 13.99 to 22.99 percent. In addition, you get a dollar-for-dollar match on the first-year’s cash back.

Benefits and Costs for Consumers

For consumers, there is very little downside to this program. Discover also benefits by being the first credit card used by young people, who Discover hopes will stay loyal later in life.

Benefits

Puts up to an extra $100 into your pocket
Encourages opening a credit card account at an early age, which helps you establish and build your credit score and credit history in preparation for post-school life
Provides an object lesson on how to manage your finances
Encourages academic achievement
Gives you free access to your FICO score

Costs

If you don’t pay off your balance each month, you’ll be charged interest that will drain your resources.
You could really screw up your credit if you use the card irresponsibly
Discover card acceptance by merchants is limited

Summary

This is a good offer and a good card, and it sets it apart from the pack. The biggest question is whether your local merchants accept the Discover card. But even if you don’t use the card much, the $20 annual benefit is certainly welcome. Use it responsibly and it’s hard to go wrong.