The Discover it® Secured Credit Card is tailored for individuals building or repairing their credit. It has no annual fee and offers a clear path to an unsecured credit card, but it requires an initial security deposit. The card’s bonus cash back on gas and dining is an extra perk that helps users save while improving their credit.
Discover it® Secured Credit Card Review: Improve Your Credit, Earn Cash Back
The Discover it® Secured is a solid tool for building your credit. It’s a no-annual-fee card with high cash back on gas and dining, and it automatically reviews cardholders to determine if they qualify for an unsecured card.
Updated: November 30, 2024
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MoneyGeek’s Take
Moneygeek.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
- PROS
- Accepts limited/bad credit
- No annual fee
- Automatic credit review after seven months
- Cash back rewards on gas and dining
- Reports to major credit bureaus
CONS- Requires security deposit
- High APR
- Rewards
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter.
- Earn unlimited 1% cash back on all other purchases.
- Perks & Benefits
- No credit score is required to apply.
- Automatic reviews start at 7 months to assess eligibility for transitioning to an unsecured line of credit. Discover can help reduce your personal information exposure online by removing it from select people-search sites. Activate this service for free via the mobile app.
- Receive alerts if your Social Security number is found on Dark Web sites. Activate this service for free.
- APRS, Fees, and Penalties
- No annual fee.
- Security Deposit
- A refundable security deposit is required, with your credit line equal to your deposit amount, starting at $200. Bank information must be provided when submitting your deposit.
- Rewards
Discover it® Secured Credit Card Overview
If you have bad or limited credit, the Discover it® Secured Credit Card is one of the best options available. This card punches above its weight, featuring no annual fee and bonus cash back on gas and dining.
Notably, the Discover it® Secured offers a clear path to potentially upgrading to an unsecured card, which is rare in this category. After seven months of responsible use, Discover automatically reviews your account to see if you qualify for an unsecured card.
The card requires a security deposit of at least $200, which sets your credit limit. This deposit is refundable once you upgrade to a regular credit card or close the account. Despite this initial investment, Discover it® Secured is an exceptional tool for improving or repairing your credit.
>>MORE: MoneyGeek's Best Secured Credit Cards
Feature | Details |
---|---|
Card Uses |
|
Annual Fee | $0 |
Security Deposit | Minimum of $200, refundable |
Introductory Offer | Unlimited Cashback Match: Discover will automatically match all the cash back you've earned at the end of your first year |
Introductory APRs | 10.99% on balance transfers for six months, then available variable APR of 27.74% after that. |
Rewards |
|
Regular APRs |
|
Penalty APR | None |
Balance Transfer Fees | 3% intro balance transfer fee, up to 5% fee on future balance transfers |
Late Fees | None the first time you pay late. After that, up to $41. |
Foreign Transaction Fee | None |
Other Perks |
|
Rewards Program Overview
The Discover it® Secured Credit Card is one of the few secured cards with a cash back feature. With a cash back system similar to the unsecured Discover it® Chrome, it lets you earn 2% cash back on dining and gas on up to $1,000 per quarter. All other purchases get 1% cash back.
Additionally, the Discover it® Secured also has a cash back match feature. This doubles all the cash back you earn for the first year without any limits. If you’ve been able to max out the spending limit on the bonus categories and earn $80, you’ll get an additional $80 back.
The cash back you earn doesn’t expire, and you can redeem it as a direct deposit to a bank account, statement credit or gift card. There’s no minimum redemption amount for most redemption choices, making it easy and flexible to use your rewards.
Why You Might Want This Card
The Discover it® Secured is excellent for building credit. Its automatic credit review and cash back make it a standout choice.
Automatic Credit Review: Discover automatically assesses your account after seven months to potentially upgrade you to an unsecured card. This gives you a clear timeline for when you can get a regular card and refund your deposit.
Cash Back Rewards: The card lets you earn 2% cash back at gas stations and restaurants (common spending categories for many people) on up to $1,000 in combined purchases each quarter. All other purchases get 1%. It also has a cash back match feature that doubles all the rewards you earn for the first year. This cash back system is similar to what you’ll find with the Discover it ® Chrome, an unsecured card.
No Annual Fee: You can use this credit card without the added cost of an annual fee.
Reports to Credit Bureaus: This card regularly reports to the three major credit bureaus, so responsible use can help you build a strong credit history, paving the way for future financial opportunities.
Why You Might Want a Different Card
While the Discover it® Secured Credit Card is a strong contender for credit building, there are some factors to consider before applying.
Security Deposit Required: To open an account, you'll need to provide a security deposit, which will serve as your credit limit. This upfront cost, starting at $200, may be a hurdle if funds are tight. If you’re looking for a secured card with a low-security deposit, the Capital One Platinum Secured Credit Card requires at least $49.
High APR: The card's regular APR is a variable 27.74%, which is on the higher end. If you tend to carry a balance, this could lead to significant interest charges over time. The DCU Visa® Platinum Secured Credit Card can be an alternative, offering a variable APR of 16.75%.
How Discover it® Secured Credit Card Compares
To help you determine if the Discover it® Secured is right for you, we compare it with similar secured credit cards.
Discover it® Secured vs. Capital One Platinum Secured
The Capital One Platinum Secured Credit Card’s standout feature is its dynamic security deposit requirement. It’s relatively lower, with a minimum of $49, which gives you access to $200 in credit. This option is useful if you’re looking for something with a lower security deposit.
Discover it® Secured vs. DCU Visa® Platinum Secured
If you tend to carry balances, the DCU Visa® Platinum Secured can be a viable alternative. It features an APR of 16.75% (variable), significantly lower than the Discover it® Secured. However, it requires a higher minimum deposit (at least $500) and Digital Federal Credit Union membership. It also lacks cash back rewards.
All Discover it Secured Card Comparisons
Is the Discover it® Secured Credit Card Right for You?
The Discover it Secured Credit Card is a solid choice for individuals aiming to improve their credit. It offers a set path for an unsecured card without an annual fee. The card also has a cash back system that offers high rewards for gas and dining, comparable to what you can find on regular credit cards.
However, its minimum security deposit is a bit steep, and its APR can be painful. But if you can front at least $200 and pay off your balance each month, the Discover it® Secured Credit Card stands out as one of the better options in a market filled with less favorable choices.
Want to explore options beyond the Discover it® Secured Credit Card? We’ve ranked the best secured credit cards and best student credit cards to help you find a card that matches your needs and profile.
How We Evaluated the Discover it® Secured Card
To evaluate this credit card, we compared it with a pool of similar cards and analyzed its offering according to our rating scale. The weightings used in this score, arranged from highest to lowest percentage, are as follows:
- Cash Back Score (50%): Assesses the value of the rewards program.
- Balance Transfer Offer (10%): A perfect rating in this category indicates an excellent balance transfer option.
- Issuer Satisfaction (5%): Reflects satisfaction scores from cardholders.
- Penalties (5%): Measures the severity of penalty rates and fees.
- Regular APR (5%): Assesses the card's interest rates, with a perfect score indicating a very low APR.
- Foreign Transaction (5%): Evaluates foreign transaction fees, with a top score indicating no fees.
- Annual Fee (5%): Measures a card's annual fees, where a perfect rating means the card has no annual fee.
- Recommended Credit (5%): Indicates how accessible the card is to applicants with various credit scores.
- Intro Purchase Offer (5%): Measures the intro purchase APR offer, with a top score indicating an excellent 0% APR offer on purchases.
About Doug Milnes, CFA
Doug Milnes is a CFA charter holder with over 10 years of experience in corporate finance and the Head of Credit Cards at MoneyGeek. Formerly, he performed valuations for Duff and Phelps and financial planning and analysis for various companies. His analysis has been cited by U.S. News and World Report, The Hill, the Los Angeles Times, The New York Times and many other outlets.
Milnes holds a master’s degree in data science from Northwestern University. He geeks out on helping people feel on top of their credit card use, from managing debt to optimizing rewards.
sources
- DCU. "Visa® Platinum Secured Credit Card." Accessed November 30, 2024.
- Capital One. "Platinum Secured Credit Card from Capital One." Accessed November 30, 2024.
- Discover. "Discover it® Secured." Accessed November 30, 2024.
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