Discover Open Road Card for students: Credit card review

Duran Mueller
Sep 26, 2007
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Applying for a student credit card is one of the first steps towards building a credit history. Amidst growing confusion, students find it increasingly difficult to decide on the right type of credit card. Discover, one of the leading credit card issuers in USA, has introduced a new credit card for students. The Discover Open Road Card for Students – as it is called is one of the leading student cards in the market today. Let us take a look at the various aspects of this student credit card.

Benefits of the Discover Open Road Card for Students

Starting off with the benefits, the Discover Open Road Card for Students offers a 0% Interest on Purchases 6 months and is a good card to start building your credit history. The Discover Open Road Card for Students is a cashback reward card and promises a 5% cashback on gas and everyday auto maintenance purchases and upto 1% cashback on all other purchases. If you want to redeem your cashback as gift cards or e-certificates from Discover’s 80 cashback bonus partners, you can increase or even double the value of your cashback bonus. That means a $20 cashback is converted into $40 gift cards or e-certificates. Wow!

The other perks that come with the Discover Open Road Card for Students are a $0 fraud liability guarantee, easiest online account management options to manage your account from anywhere and no annual fee whatsoever.

APR's and Fees associated with the Discover Open Road Card for Students

Now let us take a look at the various APR’s and other fees associated with the Discover Open Road Card for Students.
The annual APR is 0% until the last day of the billing period ending during April 2008 and after that a standard APR of 16.99% will apply on all your purchases.

If you want to withdraw cash from this credit card, Discover will charge you cash advance APR of 22.99% and a cash advance transaction fee of 3% or a minimum of $5 will apply. There is no upper limit to the cash advance fee.

The grace period on the Discover Open Road Card for Students is at least 25 days but this grace will be available only when you pay your entire balance in full each month.

If you are unable to send your monthly payments on time Discover will charge you a late payment fee. The late fee is $15 on balances up to $500, and $39 on balances over $500. For billing periods ending after 10/1/07, $19 on balances up to $250 and $39 on balances over $250.

When you make late payments, Discover can increase your APR and apply a default APR up to 28.99% to your account balances.

In addition to the above fees and penalties there is an overlimit fees associated with this student credit card. If you cross your credit limits, Discover will charge an overlimit fees of $15 on balances up to $500, and $39 on balances over $500. The minimum finance charge on the Discover Open Road Card for Students is $.50.

This credit card uses a Two-cycle Average Daily Balance (including new purchases).

The reward program of Discover Open Road Card for Students

This credit card offers unlimited cash rewards on all purchases. The full 5% cashback bonus offer is valid on the first $1200 in annual gas and auto maintenance purchases. Combined gas and auto maintenance purchases in excess of $1,200 earn Cashback Bonus at the same rate as other purchases.

Cashback on other purchases are rewarded in the following manner.

  • Other purchases that are a part of your first $1500 earn .25% cashback.
  • Other purchases that are a part of your second $1500 earn .50% cashback.
  • All other purchases after your total annual purchases (including gas and auto maintenance) exceed $3,000 earn 1% cashback.

The rewards are redeemable in $20 increments.

Gas and auto maintenance purchases are those made at merchants classified by Discover as gas stations and at stores that primarily sell automotive parts and services, such as auto dealerships, auto repair shops, tire stores and car washes.

Rewards have no expiration date; however, following circumstances, could result in forfeiture of some or all of your cashback bonus:

  • Account closure and inactivity for more than 36 months.
  • For billing periods ending after November 1, 2007, you will forfeit the entire balance in your Cashback Bonus account if your Account is inactive for 18 consecutive months, closed for any reason.
  • If you fail to make the Minimum Payment Due by the Payment Due Date for two consecutive billing periods.

Summing up this credit card has the following plus points:

  • 0% Introductory APR offer
  • Builds credit history
  • Cashback offer
  • No Annual Fee

The things to watch out in this offer are:

  • Limitations to the 0% Introductory APR offer
  • High default APR’s
  • No upper limit on cash advance fees
  • Limitations on cashback rewards on gas and auto maintenance

The facts listed in this credit card review were true at the time of posting the review, for the latest details on fees, APR's, reward program details and other information please refer to the offer document.