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Whether you’ve struggled with credit in the past or are completely new to credit and want to get off to a great start, the Discover it® Secured Credit Card can help you on your journey.
It’s a secured credit card, meaning you must submit a security deposit (a minimum of $200 up to $2,500) equal to the amount of your credit line. In the event you don’t pay off what you charge to the card, Discover will use the deposit to recoup that loss. In other respects, secured cards function just like regular credit cards (also known as unsecured cards).
A great feature of the Discover it® Secured Credit Card is that it earns cash back. Unlike some unsecured cards for bad credit, the Discover it® Secured Credit Card doesn’t hit applicants with expensive fees and confusing terms. It’s consistently one of our top credit card choices for building credit.
Intro Purchase APR
N/A
Regular Purchase APR
24.49% Variable APR
Intro BT APR
10.99% Intro APR for 6 months
Regular BT APR
24.49% Variable APR
Annual Fee
$0
Cash Advance Fee
see terms
Foreign Transaction Fee
None
Balance Transfer Fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Rewards
Earn 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 - automatically.
It’s rare to find a secured credit card that offers rewards, so this is one of many reasons the Discover it® Secured Credit Card stands out from the competition.
But cardholders should be careful not to let cash back tempt them into overspending. The best way to build credit with a secured card is to use less than 30% of the card’s credit limit and pay it off on time and in full every month.
Chance to graduate to an unsecured card
After you’ve had the card for seven months, Discover will begin conducting monthly account reviews to see if you’re eligible to graduate to an unsecured card and get your deposit refunded. If this happens, your card will transition to a Discover it® chrome. Note that Discover will evaluate your behavior across your credit cards and loans from Discover as well as other issuers or lenders. You can also get your deposit back if you choose to close your account and pay any remaining balance.
Reports to all three credit bureaus
Account and payment history with the Discover it® Secured Credit Card is reported to Equifax, Experian and TransUnion, so if you handle the card responsibly, that behavior will help build a good credit score.
No annual fee
This card has an annual fee of $0.
No foreign transaction fee
If you travel outside the country, you won’t have to worry about paying a foreign transaction fee on each purchase you make with the card outside the United States, there is none.
No penalty APR and no late fee on your first late payment
Most credit cards will increase your interest rate if you pay late — that’s called a penalty APR. The Discover it® Secured Credit Card won’t do that. And the first time you pay late, there won’t be a late fee, however, after that the late fee will be up to $41. Paying on time makes up 35% of your credit score, which means it’s the most important factor contributing to your credit score. So, even though you may not be charged a fee, late payments will be reported to the credit bureaus, which will damage your credit score. To avoid late payments and fees, consider setting up autopay either through your card’s online portal or through your bank.
High APR
The Discover it® Secured Credit Card has a 24.49% Variable APR. Though this is on par with other cards aimed at applicants with limited, bad or poor credit, it’s still high. To avoid interest charges, make it a point to pay off the card in full each month.
Requires a security deposit
Because this is a secured card, you must submit a deposit in the amount of your desired credit limit. You can get the money back if you pay off the card and close the account, or if Discover graduates you to an unsecured card, but the deposit might be a con if you don’t want to tie up $200.
Low credit limit
You must contribute a minimum security deposit of $200 to open the card, which will give you a $200 credit limit. To keep your utilization low and build a good credit score, you never want to spend more than 30% of your card’s credit limit — or $30 on a card with a $200 limit. This is fine for credit-building purposes, but for cardholders who wish to make larger purchases, it could be limiting.
The Discover it® Secured Credit Card is an excellent tool to rebuild from bad credit, or to start building credit history if you have none. But if you don’t have $200 on hand for the security deposit, there are two other cards worth considering: the Capital One Platinum Secured Credit Card and the AvantCard Credit Card.
With the Capital One Platinum Secured Credit Card, Capital One determines your minimum deposit after you apply. It could be $49, $99 or $200, all of which come with a $200 starting credit limit.
The Discover it® Secured Credit Card is the best choice of these three if you can afford $200 for the security deposit. It charges no annual fee and offers a cashback program and a guaranteed timeline as to when you’ll be considered for graduation to an unsecured card. However, the other two are good options for building credit if you’re looking for a card with a smaller deposit or no security deposit at all.
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| Discover it® Secured Credit Card | Capital One Platinum Secured Credit Card | AvantCard Credit Card | OpenSky® Secured Visa® Credit Card |
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Apply Now on Discover's secure site
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Apply Now on Capital One's secure site
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Apply Now on Avant's secure site
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Apply Now on OpenSky's secure site
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| Annual Fee | |||
| $0 | $0 | $59 | $35 |
| Welcome Offer | |||
| Discover will match all the cash back you’ve earned at the end of your first year. | No bonus | None | N/A |
| Rewards Rate | |||
| 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 - automatically | Non-rewards Card | Non-rewards card | None |
| Intro Purchase APR | |||
| N/A | N/A | N/A | N/A |
| Regular APR | |||
| 24.49% Variable APR | 26.99% (Variable) | 27.24%* Variable APR | 18.89% (variable) |
| Intro Balance Transfer APR | |||
| 10.99% Intro APR for 6 months | N/A | N/A | N/A |
| Regular Balance Transfer APR | |||
| 24.49% Variable APR | 26.99% (Variable) | N/A | N/A |
| Balance Transfer Fee | |||
| 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)* | $0 at this Transfer APR | N/A | N/A |
| Recommended Credit | |||
| Poor/Limited | Poor/Limited | Fair/Poor/Limited | Poor/Limited |
| Card Details | |||
| Discover it® Secured Credit Card | Capital One Platinum Secured Credit Card | AvantCard Credit Card | OpenSky® Secured Visa® Credit Card |
The Discover it® Secured Credit Card is a good card that allows cardholders to earn cash back while building credit — and the monthly reviews (after seven months) to see if you qualify to get your deposit refunded make this a more transparent product than many competing cards. Whether you’ve got bad credit and want to repair it, or you’re new to credit and need a card that can help you establish a good payment history, the Discover it® Secured Credit Card is a solid choice.
However, if you’re worried that your credit could be bad enough to make qualifying for even a secured card difficult, another option to consider is the OpenSky® Secured Visa® Credit Card. This is a secured card that doesn’t require a credit check when you apply (though financial information such as income and housing payment is considered). There’s an annual fee of $35.
