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What is the Discover it® Secured Credit Card?
The Discover it® Secured Credit Card is for people with no credit history or even a bad credit score. Like most secured credit cards, it requires a security deposit, but its similarities to other credit cards end there.
I’m blown away by the benefits offered by Discover it®, from its attractive credit line of $200 - $2,500 (based on your security deposit and what they approve) to its welcome offer and opportunity to earn cashback. Most secured credit cards exist only to help you improve your credit score, but this card offers many more financial rewards, which, in my opinion, motivates you to keep the card in good standing and improve your credit.
Of course, the card charges interest, and it’s not a low APR, but you pay $0 annual fees, and Discover automatically checks your eligibility to upgrade to a traditional credit card (no security deposit) after seven months.
If you aren’t familiar with how secured credit cards work, they require a security deposit equal to your credit limit. Discover uses this as collateral if you don’t make your payments. If you make your payments you receive the deposit back when they upgrade you to a traditional credit card, or you close the account in good standing.
Card basics
| Card type | Secured / Cash Back |
| Credit card issuer | Discover |
| Annual fee | $0 |
| Welcome offer | Discover will match all the cash back you’ve earned at the end of your first year. |
| Intro APR | 10.99% intro APR for 6 months on balance transfers, then 28.24% Variable
There is also a 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms) balance transfer fee |
| Reward rate | Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases. |
| Recommended credit score | Bad |
| Foreign transaction fee | 0% |
Earn Cash Back While You Build Your Credit
Current Offer
Discover will match all the cash back you’ve earned at the end of your first year.
Annual Fee
$0
Rewards Rate
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
Who should get the Discover it® Secured Credit Card?
The Discover it® Secured Credit Card is best for two types of people: those with damaged credit and those with limited or no credit. Because of their credit history, people in these situations often find it difficult to get approved for an unsecured credit card.
However, I urge you to use caution. If you have a history of not paying your credit card bills, you risk losing your security deposit with the Discover it® card. Make sure you’re ready to get back on track with your payment history before opening this card so it helps you boost your credit rather than spend money you can’t afford to lose.
Benefits and perks
- Generous welcome offer: There's a generous welcome offer available for new cardmembers: Discover will match all the cash back you’ve earned at the end of your first year. There’s no limit on how much cash back you can earn either, which makes this a great perk.
- Earn cash back: Finding a secured credit card with a rewards program is rare. Discover it® Secured Credit Card cardmembers receive excellent rewards. Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
- Free credit score: Access your free FICO® credit score in your online portal or through the Discover mobile app. You can track your FICO score progress as you work to rebuild or build credit.
- Late payment fee forgiveness: None the first time you pay late. After that, up to $41. Discover forgives the first late payment cardholders make. Discover also doesn’t charge a penalty APR.
- Refundable deposit: When you pay your balance in full and close your account, you’ll receive your full security deposit. You may also be eligible for a refund if Discover determines you are eligible for a regular Discover credit card.
- No annual fee: Start building your credit without the hassle of an annual fee. There is a $0 annual fee with the Discover it Secured Credit Card.
- Security features: Discover offers the option to activate identity theft alerts that monitor your Experian® credit report for new inquiries or suspicious activity, and the dark web for any unauthorized use of your Social Security number.
- No impact to your credit score to see if you qualify: Discover only does a soft credit check (doesn’t affect your credit score) when you check to see if you’re pre-approved. If you move forward with the application, they’ll do a hard inquiry which may lower your score temporarily, but it’s nice to know you can check your options without hurting your credit.
Earning and redeeming cash back
Like I said earlier, the fact that the Discover it® credit card pays rewards is incredible. Most secured credit cards only offer the option to get credit with a bad credit score, and they charge high fees to get it, but Discover it® is different and it’s easy to earn rewards.
Best ways to earn
Another thing I love about this card is the categories in which you can receive the highest rewards for spending: dining and gas. With today’s ever-increasing prices in both categories, it’s nice to know you can get a little cashback on these purchases.
I also like that they are categories you likely already spend money in, so you aren’t tempted to spend in other unnecessary categories that may cause you to exceed your budget.
| Categories | Rewards rate |
| Gas stations and restaurants (up to $1,000 in combined purchases each quarter) | 2% |
| All other purchases | 1% |
Using your redemptions
Discover makes it simple to use your redemptions. There isn’t a minimum amount you must accumulate to cash in, and you have options including:
- Statement credit: You can apply your rewards right back to your statement to reduce the amount you pay out of pocket.
- Electronic funds transfer: You can link a bank account and request to have your rewards transferred to it.
- Pay with Cashback Bonus®: You may be able to pay with rewards on Amazon or using PayPal.
- Gift cards: You can select physical or electronic gift cards, but it can take up to three weeks to receive physical cards.
Tip
Discover it® rewards don’t expire. However, if your card remains inactive for 18 months, they may credit your account or mail you a paper check with your rewards balance.Reward examples
To give you an idea of the value of the Discover it® rewards, let’s look at how they stack up.
Since the 2% cashback bonus on gas and dining caps at $1,000 per quarter (three months), it’s easy for most households to hit that mark. According to the Bureau of Labor Statistics, consumers spend an average of $3,120 annually on gas, or $260 a month, which is $780 a quarter. This leaves $220 to spend on dining to maximize your 2% cashback, awarding you with $80 annually.
The BLS also estimates overall spending, minus the $4,000 in bonus rewards above at $23,649 per year. Since Discover doesn’t limit your ‘other spending,’ you could earn as much as $236.49 in other rewards.
Overall, you could earn $316.49 back just for your regular spending. Of course, your actual rewards depend on your spending, and if you keep your card in good standing.
Discover it Secured Credit Card FAQ
Is Discover it Secured Credit Card good for building credit?
The Discover it® Secured Credit Card is one of the best secured credit cards for building credit. Using your card responsibly and making on-time payments will help build your credit.
Can you increase your limit with Discover it Secured Credit Card?
Discover automatically evaluates your account starting at seven months after opening it. If you use your card responsibly, there’s a chance they can increase your credit limit (with a larger deposit) or upgrade your account to an unsecured credit card.
How long does it take for a Discover it® Secured Credit Card to become unsecured?
It depends on your credit card usage and payment. Discover automatically reviews accounts after seven months, but there’s no guarantee you’ll get upgraded yet. However, if you’ve shown responsible use during that time, you may be able to convert to an unsecured card.
Are Discover it® Secured Credit Card payments reported to the credit bureaus?
Yes, any payments made on your Discover it® Secured Credit Card are reported to all three major credit bureaus: Equifax, Experian, and TransUnion.
Will the Discover it® Secured Credit Card raise my credit score?
If you use your secured credit card responsibly and make regular on-time payments, it’s possible that your credit will start to improve.
Your credit score also takes into consideration your payments with other cards, so be sure to pay all of your credit card bills on time to improve your score.
Other cards to consider
I always recommend that you compare secured credit cards, to ensure the one you choose is the best option. Fortunately, there are several options available for people with bad or no credit.
Capital One Platinum Secured Credit Card
A popular secured credit card to consider is the Capital One Platinum Secured Credit Card. This card has a $0 annual fee and only requires an initial security deposit of up to $200. Similar to Discover, you will automatically receive consideration for a credit line increase as quickly as six months after account opening, and you have the option to pick your monthly due date.
OpenSky® Secured Visa® Credit Card
Another great secured card is the OpenSky® Secured Visa® Credit Card. OpenSky’s credit card doesn’t require a credit check for approval, and users can set their credit limit up to $3,000 ($100 minimum). This card does have a small annual fee of $35.
However, the OpenSky Secured Visa comes with all the benefits of a Visa credit card, including fraud protection and acceptance almost anywhere in the world.
Earn Cash Back While You Build Your Credit
Why We Like It
Discover will match all the cash back you’ve earned at the end of your first year.
See how these cards compare:
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Capital One Platinum Secured Credit Card
- $200 initial credit line after making minimum security deposit
- Consideration for higher credit line as soon as 6 months after account opening
- No annual fee
- Pick your monthly due date
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OpenSky® Secured Visa® Credit Card
- Credit limit defined by your refundable deposit
- Choose your limit between $200 and $3,000
- No credit check when applying
Bottom line
In my opinion, you can’t do better than the Discover it® Secured Credit Card, if you don’t qualify for a traditional credit card. Its Cashback Match™ during the first year, lack of an annual fee, and option to earn 1% - 2% cashback on purchases is enough to entice most people to use a credit card responsibly.
If you qualify, you can build a solid payment history and take advantage of the cash back.
Keep in mind that there is a refundable security deposit, so be sure to have that ready before you apply.
Earn Cash Back While You Build Your Credit
Current Offer
Discover will match all the cash back you’ve earned at the end of your first year.
Annual Fee
$0
Rewards Rate
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
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