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Comparing Student Cards: Citi ThankYou Preferred vs. Discover

Credit Cards, Student Credit Cards
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Comparing Student Cards: Citi ThankYou Preferred vs. Discover (1)

Most major credit card issuers offer cards tailored to college students looking to build credit. As with regular credit cards, student credit cards offer different features to appeal to different kinds of cardholders. That’s the case with the Citi ThankYou® Preferred Card for College Students and the Discover it® for Students. The first is a card that appeals to students with an active social life, who spend a lot on restaurants and entertainment. The second is for those who believe cash is king.

Before we get started, be aware that simply being a college student is not enough in itself to qualify for a student card. You usually have to be 21 years old or be able to show that you have significant income. For more information, read up on the rules for student cards.

Let’s take a look at the cards side by side:

 Citi ThankYou® Preferred Card for College StudentsDiscover it® for Students
Annual fee$0$0
Sign-up bonusEarn 2,500 bonus points after spending $500 in purchases within the first 3 months of account opening*Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
APR0% on Purchases for 7 months, and then the ongoing APR of 15.49% - 25.49% Variable APR0% on Purchases for 6 months and 10.99% on Balance Transfers for 6 months, and then the ongoing APR of 13.99% - 22.99% Variable APR
Foreign transaction fee3%0%
Rewards2 ThankYou points per $1 spent on restaurants, select entertainment, tourist attractions, record and video stores, internet streaming media; 1 ThankYou point per $1 on all other purchases5% cash back in quarterly rotating categories (on up to $1,500 in spending per quarter), 1% cash back on all other purchases; $20 annual reward for GPA of 3.0 or higher for up to five years; Discover matches all cash back earned in first year

New cardholders get a bonus

Like a lot of credit cards, these two offer bonuses to entice new applicants.

Citi ThankYou® Preferred Card for College Students: Earn 2,500 bonus points after spending $500 in purchases within the first 3 months of account opening*

Discover it® for Students: Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

Since ThankYou points top out in value at 1 cent per point, those 2,500 bonus points on the Citi ThankYou® Preferred Card for College Students add up to a maximum bonus of $25.

You can earn a much bigger bonus with the Discover it® for Students, since the size of your bonus depends on how much you spend in the first year. The only catch: You have to wait a year to collect your bonus. This card gives you 5% cash back in rotating bonus categories, on up to $1,500 in spending per quarter, and 1% cash back on all other purchases. Discover’s 5% cash-back bonus categories for 2016 are:

DISCOVER BONUS CATEGORIES FOR LATE 2017 AND 2018
Q4 2017 (Oct. 1 – Dec. 31)Amazon.com and Target
Q1 2018 (Jan. 1 – March 31)Gas stations and wholesale clubs
Q2 2018 (April 1 – June 30)Grocery stores
Q3 2018 (July 1 – Sept. 30)Restaurants
Q4 2018 (Oct. 1 – Dec. 31)Amazon.com and wholesale clubs

Say you spend $1,000 in the 5% categories in your first year as a cardholder. That will give you $50 cash back, which Discover will match for a total of $100. If you spend another $1,000 earning 1% cash back, Discover will match that $10. At the end of the year, your sign-up bonus would add up to $120. So the Discover it® for Students is the clear winner on this point.

Rewarding your lifestyle

When you’re choosing credit cards that offer rewards, consider how those rewards match your spending habits and lifestyle.

The Citi ThankYou® Preferred Card for College Students offers 2 ThankYou points for every $1 spent on restaurants and entertainment and 1 point per $1 spent on everything else. Restaurant spending includes bars, cafes and fast food. The definition of entertainment includes concerts, theater, live sports events, movies, amusement parks and internet streaming media services. There is no limit on the number of points you can earn, and they never expire.

You can redeem ThankYou points online or over the phone for gift cards, merchandise, cash back, statement credit or charitable donations. See NerdWallet’s review of ThankYou points for a complete rundown of redemption options.

The Discover it® for Students rewards you with cash back rather than points — 5% in the bonus categories discussed earlier, and 1% elsewhere. To qualify for the 5%, though, you have to “activate” the bonus category each quarter, which you can do online. While you’re a student, you also get a little something extra for maintaining a 3.0 GPA or higher: Discover will reward you with an extra $20 each year for five years.

With the Discover it® for Students, you have many options for using your rewards. You can redeem your rewards any time for any amount as a statement credit, a deposit into your bank account, a donation to certain charities, or to pay for merchandise from certain online retailers. You can also use your Discover rewards for purchases on Amazon.com. Starting at $20, you can redeem for gift cards. Rewards never expire.

Alike and different

As a credit newcomer, you’ll get free access to your FICO score with both cards. And neither card has an annual fee. The cards have additional features that might sway you toward one or the other.

Discover it® for Students won’t charge you a late fee the first time you miss a payment, and a late payment will never raise your APR. Of course, if you’re trying to build credit, missing a payment is just about the worst mistake you can make.

If you’re planning a semester abroad or any other foreign trips, the Discover it® for Students doesn’t charge a foreign transaction fee; the Citi ThankYou® Preferred Card for College Students charges a fee of 3%. That means if you buy a $100 sweater in Paris, you’ll actually pay $103 for it. Discover cards aren’t as widely accepted internationally as MasterCard, but you can use your Discover card at foreign businesses that accept Diners Club cards.

With either card, you’ll get travel accident insurance.

Both cards offer $0 liability for unauthorized charges. The Citi ThankYou® Preferred Card for College Students also offers purchase protection, extended warranty, car rental coverage and Price Rewind. What’s Price Rewind? If Citi finds a lower price on an item you purchased within 60 days, you’ll be refunded the difference between the price you paid and the lower price.

As a Citi cardholder, you have entrée to Citi Private Pass, which gives you exclusive access to concerts, sporting events, dining and “behind the scenes” events with musicians, sports stars, chefs and more.

The Discover it® for Students has a feature called Freeze It. If your card is misplaced or stolen, you can freeze it online or via the Discover app so that no one can make charges. If you find your card, you can unfreeze it.

Which card is best for you?

If you go to a lot of concerts, sports events, eat out a lot and want special access, the Citi ThankYou® Preferred Card for College Students will reward you for your lifestyle. But if cash is king in your life, Discover it® for Students will pad your wallet.

Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email: ecannon@nerdwallet.com. Twitter: @ellencannon.