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From the Experts at Credit.com

Discover it Secured Credit Card Review: Rewards As if You Had Great Credit

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When you have damaged credit, it can be really difficult to be approved for a new credit card, yet that is one helpful way to rebuild your credit history. Secured cards are a popular solution to this problem, as applicants with nearly any credit history can be approved as long as their identity can be verified and they have no pending or current bankruptcies. The problem is that many secured cards have very high rates and fees, making them costly to use and, if not managed properly, can exacerbate an already bad credit situation.

As far as costs go, the Discover it Secured credit card has few fees, and if you avoid carrying a balance on the card, it can be a valuable option for someone trying to rebuild their credit.

An Introduction to the Discover it Secured Credit Card

Discover it® Secured Card – No Annual Fee

Apply Now
on Discover's secure website
Card Details
Intro Apr:
N/A

Ongoing Apr:
24.49% Variable on purchases & balance transfers

Balance Transfer:
Intro: 10.99% for 6 months

Annual Fee:
$0

Credit Needed:
Poor-Bad-No Credit
Snapshot of Card Features
  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
  • We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
  • 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 – automatically.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.

Card Details +

Secured cards work mostly like other credit cards, except that cardholders are required to submit a refundable security deposit (minimum of $200 for the Discover it Secured credit card) before their account can be opened. But once an account is established, secured cards operate just like any other credit card.

Cardholders will receive a monthly statement and must make at least the minimum payment before the due date. And after a given period of time as a cardmember, your account will be reviewed each month to see if your credit has improved enough to qualify for a standard account with no security deposit.

Otherwise, this card offers several of the same features and benefits of the standard Discover it card. Cardholders earn 2% cash back at restaurants or gas stations (up to $1,000 in combined purchases each quarter) and 1% after that, as well as on all other purchases. You can redeem rewards for cash back at any time and in any amount, and cash back rewards never expire. You can even redeem your rewards at checkout on Amazon.com.

Discover comes with the Freeze it feature to temporarily prevent new charges from being processed when their card is misplaced. (You can learn more about the risks of credit card fraud here.) The variable interest rate is 24.49% Variable on purchases & balance transfers APR and there is no penalty interest rate. Discover will automatically waive a cardholder’s first late fee. Annual fee for this card is $0 and no foreign transaction fees imposed on charges processed outside of the U.S.

What’s the Current Signup Bonus?

There is no initial signup bonus for this card, but after one year Discover will match all of the cash back that new cardholders have earned during their first year automatically. 

The Advantages of the Discover it Secured Credit Card

A secured card like this is a good way for people with poor credit to begin to rebuild their credit history. (You can see where your credit currently stands by getting a free credit report summary on Credit.com.) This is one of the few secured cards that has no annual fee and one of the rare secured cards that even offers rewards. Also, this card has very lenient terms including no penalty interest rates, no foreign transaction fees and an automatic waiver of cardholder’s first late payment fee. Finally, Discover is highly regarded for its customer service.

The Disadvantages of the Discover it Secured Credit Card

When it comes to improving your credit, any secured card is only as good as the person using it. When you make all of your payments on time, you can expect to see your credit score rise significantly in the first year. But if cardholders fail to make on-time payments or max out their card, their credit history and credit scores will continue to suffer. The annual percentage rate of 24.49% Variable on purchases & balance transfers is competitive for a secured card, but is still a high rate to pay, so carrying a balance could become costly. (Here’s more on how credit card interest is calculated.) In addition, some credit card users who have trouble with overspending might not want to use a credit card that offers rewards for additional spending as it can be an incentive to spend even more.

Who Is the Discover it Secured Credit Card Right for?

This card is perfect for applicants who are ready to start rebuilding their credit but don’t want to spend money on the fees required by many secured cards. At the same time, cardholders who have overspent with reward cards in the past might reconsider using a card that offers cash back for spending.

Frequently Asked Questions About the Discover it Secured Credit Card

Q. How much is the security deposit?

A. The deposit amount must be at least $200 and not more than $2,500, and the amount of your deposit is equal to the credit line you will receive. Your deposit will be returned when your account is closed and your balance paid in full. But your account will be reviewed automatically starting at eight months and, if you manage the account responsibly, you could qualify to “graduate” to an unsecured card and get your deposit back.

Q. How does the cash back match program work?

A. The cash back match program is essentially a signup bonus for new cardholders: Discover is offering to match all the cash back they earn in their first year automatically at the end of that year.

At publishing time, the Discover it Secured credit card is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

This article was last updated on July 6, 2017. It was originally published August 25, 2016.


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