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Discover Cashback Debit: Earn Rewards Without the Risk of Credit Card Debt

Although you can find a better cash-back rate, this debit card doesn’t charge a monthly fee.

Discover® Cashback Debit

Discover® Cashback Debit

For 1% cash back on all purchases

Rewards: 1% in cash back on up to $3,000 in purchases per month (see website for details).

Fee: None

Checking account: Discover only

ATMs: 60,000 fee-free ATMs in the US

The Discover® (Member, FDIC) Cashback Debit earns you 1% on all qualifying purchases for up to $3,000 in spending per month (see website for details). While there are other debit cards for college students that offer 1% cash back, many come with a monthly fee or require you to maintain a sizable minimum checking account balance. Though there’s a monthly cap on the rewards you can earn, it’s much higher than some competitors -- plus, you won’t be limited to getting rewards on only certain purchases as with other cards.
One drawback is that you’ll need a Discover checking account to use this card -- it doesn’t connect to any check account like other debit cards picks on this list. If you don’t mind switching banks, this checking account is free, has no overdraft fees and has access to over 60,000 fee-free ATMs.

Read more: Discover Credit Cards

Cash-back rewards may sound alluring, but the temptation to overspend can lead to costly credit card debt. The Discover® Cashback Debit offers the opportunity to earn cash back without racking up credit card debt.

There’s no monthly fee to cut into your cash back earnings either, but you do need to have a Discover checking account to get the card. But is getting a debit card with rewards a better financial choice than applying for a credit card? Here’s what you need to know before you decide.

What is the Discover Cashback Debit?

The Discover Cashback Debit is a debit card that lets you earn cash back on qualifying purchases, similar to the way cash-back credit cards work

With the Discover Cashback Debit, you could earn 1% cash back on up to $3,000 in qualifying purchases -- up to $30 cash back each month (see website for details). That rate might not sound as lucrative as the best cash-back credit cards, but using a debit card helps limit your spending to what you already have in your checking account. That can help you avoid overspending and having to pay finance charges on carried balances -- and considering the average credit card interest rate is 20.74% APY (Annual Percentage Yield), according to Bankrate, those charges could pile up quickly.

And unlike some other cash-back debit cards, Discover charges no monthly fee and doesn’t require you to maintain a minimum monthly balance. 

Pros and cons of Discover Cashback Debit

Pros

  • Avoid high-interest credit card debt

  • Can help you earn cash back without overspending

  • No monthly fee or minimum checking account balance

  • No hard credit check required

Cons

  • Could earn more cash back with some credit cards

  • Requires you to have a Discover bank account

  • Won’t help your credit score

Who the Discover Cashback Debit is best for

If you like the idea of earning cash back on your regular purchases without a credit card, the Discover Cashback Debit could be a solution for you. Here’s why the card may be a good fit for you:

You may not qualify for a credit card. You’ll need to open a Discover checking account to get the debit card, but unlike applying for a credit card, no hard credit check is required. 

You don’t want to risk overspending. Because you’re limited to spending money you already have in your account, a debit card could help you spend less compared to a credit card.

You are already paying a lot for cash advances. With a Discover debit account, you’ll get access to more than 60,000 no-fee ATMs in the US, which could save you a lot of money vs. paying hefty fees for credit card cash advances.

You’d like to start saving automatically. If you also get a Discover online savings account, you can use your cash back as a set-it-and-forget-it savings strategy. Discover’s Auto Redemption feature lets you automatically deposit the cash back you earn into your savings account every month. If you earned the $30 maximum each month, that would put $360 in your savings after a year.

Who the Discover Cashback Debit isn’t for

The Discover debit card isn’t the best fit for everyone, and there are better cash-back offers out there. Here’s when you might want to consider another option:

You don’t overspend with credit cards. If you use your credit card responsibly and pay off your balance every month, you could likely earn better cash-back rewards with a credit card than you would with the Discover Cashback Debit card. Some credit cards offer a flat percentage cash back with no monthly limits, while others offer higher cash-back rates for purchases in the categories you use most -- like groceries or travel.

You want to build your credit. A credit card may also be a better choice if you want to build your credit through responsible use and on-time payments. If you’re unable to qualify for a credit card based on your current credit score, use these expert tips to help raise your score.

You want to earn interest on money in the account. And while you can earn cash-back rewards, you won’t earn any interest on the money that’s in your Discover debit account. You’d do better to open a high-yield savings account -- Discover also has a high-yield savings account -- to accrue interest on your savings stash, and use the Discover debit account for your regular spending money.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Tiffany Wendeln Connors is a senior editor for CNET Money with a focus on credit cards. Previously, she covered personal finance topics as a writer and editor at The Penny Hoarder. She is passionate about helping people make the best money decisions for themselves and their families. She graduated from Bowling Green State University with a bachelor's degree in journalism and has been a writer and editor for publications including the New York Post, Women's Running magazine and Soap Opera Digest. When she isn't working, you can find her enjoying life in St. Petersburg, Florida, with her husband, daughter and a very needy dog.