The Discover it® Secured Credit Card is a popular choice for consumers looking to build or rebuild their credit history. As a secured credit card, it offers the benefit of earning rewards while simultaneously helping cardholders improve their credit score. Designed for those with limited or no credit history, the card is backed by a cash deposit, which determines the credit limit and serves as collateral.
With this card, users can earn cash back on their purchases and experience an array of advantageous features. Among its competitors, the Discover it® Secured Credit Card has a unique offering, as it poses fewer fees than its rivals and provides cash back rewards. Additionally, the card comes with a 10.99% intro APR on balance transfers for six months, making it a potentially attractive option for those looking to transfer higher interest rate balances.
Features and Benefits
The Discover it® Secured Credit Card is designed to help individuals build or rebuild their credit while offering valuable rewards. One of its key features is its $0 annual fee, making it an affordable option for those looking to establish good credit habits.
Cardholders can earn cash back rewards, which is uncommon for a secured credit card. According to Forbes, the cash back rewards structure is as follows:
- 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
- 1% unlimited cash back on all other purchases
- Cashback Match, which doubles the cash back earned at the end of your first year
Another notable feature of the Discover it® Secured Credit Card is its potential path to upgrade to an unsecured account. As mentioned on Credit Karma, Discover conducts periodic reviews of your account starting at eight months, and if your credit has improved and you’ve managed your account responsibly, you may be eligible to graduate to an unsecured card.
Additionally, the card provides free monthly FICO score access, allowing you to monitor your credit progress. The Discover it® Secured Credit Card also offers benefits such as:
- Fraud protection with $0 fraud liability
- Freeze it®, a feature that allows you to temporarily freeze your account to prevent new purchases
- U.S.-based customer service available 24/7
The application process for the Discover it® Secured Credit Card is user-friendly and designed to cater to individuals with limited or no credit history. To start, you can apply online through the official Discover website and complete the necessary information required for you to be considered for approval.
During the application process for the Discover it® Secured Credit Card, you will need to provide personal details, such as your name, address, social security number, and employment information. One noteworthy aspect of the application process is that no credit score is required to apply, making it accessible to individuals lacking a strong credit history, as mentioned on Forbes.
Given that it’s a secured credit card, you will need to provide a security deposit; this will serve as collateral and determines your credit limit. The minimum deposit for the Discover it® Secured Credit Card is $200, which allows you to start building credit with a limited initial investment. You can increase your credit limit by depositing more funds up to a maximum of $2,500, according to NerdWallet.
The processing time for your application and the approval process is relatively quick. Once approved, you will receive your Discover it® Secured Credit Card, and you can begin using it to make purchases, pay bills, and earn cash-back rewards, all while establishing or repairing your credit.
Fees and Rates
The Discover it® Secured Credit Card stands out for its low fees in comparison to other secured credit cards. One of the card’s most notable features is its $0 annual fee, which is not common among secured credit cards. This is particularly beneficial for those looking to build their credit without incurring additional costs.
Another highlight is the card’s lack of foreign transaction fees, making it a suitable option for international travelers. Moreover, there is no penalty APR, and the first late payment fee is waived.
The Discover it® Secured Credit Card also offers a competitive cashback program, with cardholders earning 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. All other purchases will earn 1% cash back rewards.
However, it is important to note that the card requires a security deposit, which serves as your credit line. The minimum deposit is $200, with an option to increase the deposit based on your needs and approval.
Pros and Cons
The Discover it® Secured Credit Card has several advantages and disadvantages for those looking to build or rebuild their credit. In this section, we will discuss the pros and cons of this secured credit card.
- No annual fee – This card does not charge an annual fee, which is a plus for those looking to minimize costs.
- Cash back rewards – Earning cash back rewards is uncommon for secured cards, making this a valuable feature.
- Path to unsecured account – The card offers a potential path to graduate to an unsecured account, helping improve your credit over time.
- Competitive cash back and welcome offer – The card has a competitive cash back program and an attractive welcome offer for new cardholders.
- Low maximum credit limit – The credit limit for this card can be comparatively low, which may be restrictive for some users.
- Secured deposit required – As a secured card, an initial deposit is required to open the account. This deposit serves as collateral and will be equal to your credit limit.
- Requires responsible credit management – Like any credit card, it is essential to manage your Discover it® Secured Credit Card responsibly, including timely payments and maintaining low balances.
By considering these pros and cons, prospective cardholders can make an informed decision on whether the Discover it® Secured Credit Card is the right choice for them.
Comparison with Other Secured Credit Cards
The Discover it® Secured Credit Card stands out among other secured cards on the market. One of its main advantages is the cash back rewards program, which is a rarity among secured card options. Cardholders earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases per quarter) and an unlimited 1% cash back on all other purchases.
An additional benefit for new cardholders is the welcome bonus offered by Discover. They match all the cash back earned by the cardholder at the end of their first year. This is a unique perk, as most secured cards do not offer any welcome bonuses.
When comparing the Discover it® Secured Credit Card to the Capital One Secured Mastercard®, both cards have high ongoing interest rates, which is standard for cards targeting consumers with bad credit. However, the Discover it® Secured Credit Card has a slight edge with its cash back rewards program.
Some other secured cards that can be compared to the Discover it® Secured Credit Card are:
- Capital One Secured Mastercard®
- Citi® Secured Mastercard®
- Bank of America® Customized Cash Rewards Secured Card
While all of these cards may help consumers build credit, none of them match the Discover it® Secured Credit Card’s cash back rewards program, making it a more valuable option for those looking to rebuild their credit with additional perks.
The Discover it® Secured Credit Card offers an excellent opportunity for individuals looking to build or rebuild their credit. With a competitive cash back program and a welcome bonus rarely found in secured cards, it stands out among its peers.
Despite a potential lower maximum credit limit, cardholders benefit from its $0 annual fee and the possibility of upgrading to a regular card over time. It’s an ideal choice for responsible users seeking to establish credit without sacrificing rewards.
To make the most out of the Discover it® Secured Credit Card, ensure timely payments and manage credit utilization carefully. By consistently using the card and demonstrating responsible behavior, cardholders increase their chances of transitioning to an unsecured credit card and enjoying even more benefits in the future.