From Vanilla Value to Cookies and Cream
Everyone loves classic vanilla, but sometimes you have to switch things up, such as diversifying your wallet’s lineup with cards that offer better rewards in select categories or are easier to get approved for.
Last week, in “From Sweet Swipes to Vanilla Value,” we examined how a straightforward card that earns 2% cash back serves as a helpful foundation to build your wallet around. This week, here’s the scoop on a more accessible card, the Discover It Cash Back.
For college students, this card is ideal. Discover approves almost everyone and is generous with credit limits despite a limited credit history. Call it the cookies and cream of the credit card world, a reliable old standby.
You earn 1% on all purchases and 5% on select rotating categories. The last quarter, from July to September, covered transit, rideshares, and fuel. This quarter, it’s Amazon and convenience stores, perfect for holiday season spending.
After your first year, Discover even doubles your total cash back as a welcome bonus. The 5% category caps at $75 per quarter, but the 1% base rate is unlimited.
If you’re wondering why Discover seems so generous, they’re actually not. The company’s betting you’ll forget to activate categories, which requires only a single click at the beginning of each quarter, or default to using the same card for everything. That way, they pocket the savings instead of you. However, if you pay attention to what you’re buying, you can outsmart the system and keep the cash for yourself.
Then there’s the under-the-radar rainbow sherbet option, the PayPal Cash Back Debit Card. It’s not a credit card, but it offers 5% back on up to $1,000 in purchases per month in a category of your choice. Because it’s a debit card, there’s no credit check, making it ideal for anyone with a limited credit history, and it naturally helps rein in overspending.
I use PayPal as my go-to payment hub for eating out. My weekly restaurant budget is automatically deposited into a PayPal Savings account, currently earning 3.8% annual interest through PayPal’s partner bank, Synchrony. Those savings fuel my dining category and slowly deplete while still earning interest. It’s simple, flexible, and FDIC insured.
Across all my cards, including the Fidelity Visa Signature card with a 2% Cash Back rate, my average return on all purchases is approximately 2.8%. I’m working to push that above 3% over time. I’m not chasing travel points or airport lounges. I prefer taking the cash and investing it in my Roth IRA, the ultimate long-term reward.
If you’re earning extra cash on money you’d spend anyway, it’s free fuel for your savings fire. As the 25-500 Plan taught us, a few dollars compounded can become hundreds or even thousands by the time of retirement.
I built my card lineup based on my reality as a college student, where I spend more on gas and eating out than on travel or groceries. Lounge access and bonus points on airfare don’t mean much when your “flight” is a rushed walk to a class I’m running late for.
While this piece focuses on students, numerous excellent resources are available for those who wish to delve deeper. My top recommendation is
Daniel Braun on YouTube, especially if you’re interested in travel-based rewards.
I’ll keep refining this lineup; I plan to get a Citi Custom Cash card for gas one day, once my credit history is long enough for their approval method. If you’ve read Full Tank, Fuller Wallet (and you should!), you know I need that extra bit of fuel savings.
But for now, I’m happy with my Vanilla Bean Fidelity 2%, a scoop of Cookies and Cream Discover It, and a spoonful of Rainbow Sherbet PayPal Cash Back.
Up next, a deep dive into the details of the Roth IRA, what to do, what to avoid, and the key facts to know before opening one.
