PhotoA new survey of college students by Discover has found that overall, they are managing their money wisely.

Once upon a time, students were bombarded with credit card offers the first week they arrived on campus, sometimes with predictable bad results. Reform legislation put an end to that and students appear to now be choosing the card that best suits their needs.

Or are they?

The Discover survey contends that students are leaving money on the table by not selecting the most advantageous cash back credit card. In fact, the survey found that 45% of students prefer to pay for everyday purchases with their debit card.

There's a lot to be said for that. Using a debit card takes money directly from your bank account, so you don't spend money you don't have. On the downside, debit cards can be a little riskier when it comes to fraud. They usually don't provide much in the way of rewards and don't boost your credit score.

Cash back cards

The point of the survey, of course, is to highlight Discover's cash back credit card for students – the Discover It for Students Card.

Fair enough – here's what the card offers: 5% cash back in rotating categories and 1% cash on everything else. The card offers a match of all cash back at the end of the first year for new card members. It pays $20 each school year the cardholder maintains a 3.0 or higher grade point average, up to five years.

Meanwhile, has picked the Citi Double Cash card as its choice of the best cash back credit card. It pays 2% for all general purchases – 1% when the purchase is made and 1% when the bill is paid.

Simpler is better

"When it comes to credit cards, the simpler, the better," said Matt Schulz,'s senior industry analyst. "Unlike many cash back cards, the Citi Double Cash card doesn't make you chase bonus categories. It just gives you up to 2% cash back on everything."

The problem with putting everything on a credit card is it is easy to lose track of your spending. When the bill is bigger than you anticipated, it's easy to let much of the balance slide to the next month. That is how big credit card balances begin.

But it you have the discipline to pay your balance in full each month, a cash back credit card is like getting a small discount on every purchase. You just have to choose the card that makes the most sense for you.

Blue Cash Preferred from American Express

In addition to the Discover It for Students Card and the Citi Double Cash card, the Blue Cash Preferred card from American Express is worth checking out, even though it carries a fairly steep annual fee of $95.

Ordinarily, an annual fee is a deal-breaker, since there are so many good choices that don't have a fee. However, the Blue Cash Preferred offers 6% cash back on groceries on up to $6,000 of spending per year, and 3% cash back at gas stations and some department stores.

It's not a good choice for college students on a budget, but for large families that spend a lot each month, it might pay off.

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