If you’re struggling with bad credit or a limited credit history, secured credit cards are one method for building your credit. Some people may not consider secured cards to be real credit cards and often there’s no real perk to having one beyond the building credit aspect.
However, with the Discover it Secured credit card, cardholders have a chance to rebuild their credit while earning cashback rewards. Discover even offers another bonus in the form of doubling any cashback rewards earned for your first year of account opening. Such perks are what separates Discover’s secured card from other options.
While secured credit cards tend to have high interest rates, they also can be a tool to develop proper credit card practices to use long after re-establishing your credit. Does it make sense to have a secured credit card? And if so, what makes the Discover it Secured card so special?
Earn Cash Back While You Build Your Credit
Discover it Secured
Discover it Secured
up to 2% cash back
- 2% cash back at restaurants and gas stations
- Refundable security deposit
- Cashback Match at the end of first year
- FICO Credit Score monitoring
- Requires security deposit
- Discover matches all your cash back earned in your first year as a cardholder
- 2% cash back on purchases at restaurants and gas stations (up to $1,000 quarterly), and 1% cash back on all other purchases
- Intro balance transfer 0% offer: 10.99% for 6 months from date of first transfer, for transfers that post to your account by January 10, 2022 then 22.99% (variable)
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. These people often find it difficult to get approved for an unsecured credit card because of their credit history.
A secured credit card normally doesn’t require a credit check as part of the application process. Instead, the account is secured with a security deposit. In the case of the Discover it Secured card, the minimum security deposit is $200.
Discover it Secured is for you if you’re interested in a secured credit card that can eventually be converted into an unsecured card. After eight months, Discover automatically reviews your account, looking for signs of responsible credit card use. If you’ve done your part, your card can be converted to an unsecured card and you’ll be refunded your security deposit.
|Card type||Secured / Cash Back|
|Credit card issuer||Discover|
|Intro bonus||Discover matches all your cash back earned in your first year as a cardholder|
|Reward rate||2% cash back on purchases at restaurants and gas stations (up to $1,000 quarterly), and 1% cash back on all other purchases|
|Recommended credit score||Fair, Bad|
|Foreign transaction fee||None|
Discover it Secured credit card benefits and perks
- Generous welcome offer: There's a generous sign-up bonus with this card: Discover matches all your cash back earned in your first year as a cardholder. 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 cardmembers earn 2% cash back on restaurants and gas stations (up to $1,000 quarterly). It also offers unlimited 1% cash back on all other purchases. Cardholders can get paid while establishing credit.
- Free credit score: Access your free FICO credit score through monthly statements as well as an online account through the Discover mobile app. You can track your FICO score progress as you work to rebuild or build credit.
- Late payment fee forgiveness: If you have a secured card, you're probably learning how to practice good financial habits. So you might accidentally be late on your monthly payment. With the Discover it Secured, you won't be hit with a late fee on your first late payment.
- Refundable deposit: When you pay your balance in full and close your account, you’ll be refunded your full security deposit. You may also be eligible for a refund if Discover determines during their automatic reviews of your card usage that you're ready to graduate to 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: You'll have the option to activate identity theft alerts that will let you know if your Social Security number is found on the dark web or if a new account is added to your credit report.
Drawbacks to this card
- Requires deposit: Because this is a secured card, you will need to have the cash available to put down as a deposit to open the account. A minimum security deposit of $200 is required.
- Limited line of credit: The available credit issued to you will be equal to the size of your security deposit. The maximum credit limit possible is $2,500, but that will vary by individual and will be determined by your income and creditworthiness.
- Intro APR offer: There is an introductory APR offer on balance transfers with this card, but it is not a 0% intro like on other credit cards.
Earning and redeeming cash back
Potential earnings in years one and two
Here's a look how your cash back can add up with the Discover it Secured credit card. To calculate these values, we used a valuation of one cent.
Remember, this is an estimation. The actual value will be determined by how much you spend and in which categories you spend.
Year one earnings: $790
Year two earnings: $395
These values are based on the FinanceBuzz Credit Card Rewards Valuation Model which takes a look at points earned via spending, the sign-up bonus, and the annual fee.
Best ways to earn
The Discover it Secured is special among secured credit cards in that it is a rewards credit card that earns you cash back for your spending. And since the bonus categories align with how many people naturally spend, it means you're earning rewards on purchases you're likely already making so you're still practicing good financial habits and not spending just to earn rewards.
|Restaurants and gas stations (up to $1,000 quarterly)||2%|
|All other purchases||1%|
Maximizing your redemptions
Redeeming your cashback rewards is very easy with Discover. You can redeem for any amount at any time. Some other card issuers require you to have a minimum of $25 in rewards, for example, before you can redeem.
You can redeem your rewards as a statement credit or have them transferred as cash to a bank account. There are also options for gift cards and charitable donations. You can also use your Discover cashback rewards when checking out on Amazon or paying through PayPal.
Discover it Secured FAQs
Is Discover it Secured good for building credit?
Discover it Secured 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.
This also makes it a great credit card for teens who can begin to establish credit by paying their balance in full each month.
Can you increase your limit with Discover it Secured?
Yes, you can increase your credit limit. There’s a minimum security deposit of $200 to open an account. You can increase your limit up to a $2,500 maximum limit, and your security deposit has to equal your credit limit. Increases are determined by your income and your ability to pay your credit card bill.
How long does it take for Discover it Secured to become unsecured?
This depends on your credit card usage and payment. Accounts are automatically reviewed by Discover after eight months. If you’ve shown responsible use during that time, it’s likely that you would be able to convert to an unsecured card.
Are Discover it Secured 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 card raise my credit score?
Yes, as you use your secured credit card responsibly and make regular on-time payments, your credit will start to improve.
Other cards to consider
If you're taking the time to compare credit cards, then you should know the Discover card is not the only secured credit card offer that might be available to you. Other credit card issuers also provide secured cards that might be able to help you work your way to good credit.
A popular secured credit card to check out is the Capital One Platinum Secured. This card has a $0 annual fee and only requires an initial security deposit of $200. With this card, 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. This secured card is worth considering if you want to rebuild your credit.
Another great secured card is the Opensky Secured Visa. Opensky’s credit card doesn’t require a credit check for approval, and users can set their credit limit up to $3,000 ($200 minimum). This card does come with 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. Opensky also lets cardholders set up email alerts, which can keep you informed about payment due dates or when a transaction has posted.
Earn Cash Back While You Build Your Credit
Discover it Secured
Discover it Secured
Discover matches all your cash back earned in your first year as a cardholder
See how these cards compare:
Capital One Platinum Secured
- $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
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