Discover Student Clear Credit Card - Pros and Cons, Review

The Discover® Student Clear Card, issued by Morgan Stanley, provides a Cashback Bonus® Reward program to cardholders. Through the reward program, cardholders earn a full 5% in cash rebates for purchases made at select merchants and up to 1% for general purchases. Those who spend up to $1,500 on general purchases will receive a .25% rebate, between $1,500 and $3,000 will receive a .5% rebate, and over $3,000 will receive a 1% rebate.* Cardholders also earn a 0.25% rebate at select warehouse clubs and discount stores, and they can earn a double Cashback Bonus® for redeeming their rebates for gift certificates from participating Discover Card Partners. There is no yearly limit on the amount of rebates that can be earned, and rebates do not expire as long as the account is active within a 36 month period.

Aside from the reward program, the card also provides standard benefits including online account management, no liability for unauthorized transactions, and discounts on products and services at participating merchants and retailers.

The APR for this card is above average, but there is no annual fee and there is a 0% introductory APR that applies to purchases for six months.

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.

Therefore, those who plan to spend over $3,000 a year (to earn the 1% cash rebate), plan to use their Cashback Bonus® award at participating retailers (to earn a full 5% rebate and double cash rebates), and plan to pay in full each month (to avoid costly finance charges) will benefit most from what the Discover® Student Clear 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 full 5% Cashback Bonus® award.
Review Date: 10/2/2006

Most Attractive Feature(s): Double cash rebates at participating retailers and merchants (through the Cashback Bonus® award program); no annual fee; 0% intro APR on purchases.
Least Attractive Feature(s): Uses “Two Cycles Average Daily Balance” method when determining finance charges.

Additional Perks
Various Internet account related services.
Various card designs to select from.
No liability for unauthorized transactions.
Fraud and security protection services.
Discounts on products and services at participating merchants and retailers.
See website for additional benefits.

Important Notations
See website for complete terms and conditions of card usage and application disclosure.

Note: The review on this card was updated on 10/2/2006. The review is believed to be accurate during the update, however, information posted may have changed since the update. We strongly suggest that you carefully read the Terms and Conditions statement that accompanies the credit card application. Credit card review information is provided by CardOffers.com, Inc.