Discover it Secured Credit Card Review – Rebuild Your Credit
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For those who do need help building credit history, the Discover It card can be a great asset. It also offers some of the benefits you might expect with an unsecured card, such as rewards programs.
9/10
Fees
8/10
Cashback
9/10
Credit Building
9/10
Bonuses
8/10
With so many credit cards on the market today, how do you even know where to begin? Fielding pre-approval letters in the mail and researching for the best rewards can be exhausting. The best way to figure out which card you want and need is to take a step back and start at the beginning. Your options will be limited if you’ve never had a credit card. If you’ve had a credit card in the past but did not build up a good credit history, you’ll also find your options limited.
Fortunately, there are credit cards out there that are made for situations like these. Here’s what you need to know about the Discover it Secured Credit Card.
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What is the Discover it Secured Credit Card?
The Discover it Secured card is designed to help build or rebuild good credit history as a secured credit card. It is very similar to a traditional credit card — you’ll have a credit line that you can use, and then you need to make monthly payments. Your credit card account is reported to the three major credit bureaus just like any other card.
This card and a traditional credit card are that you have to put down a security deposit as collateral for the credit card account. The credit line that you’re approved for will be equal to the amount of the security deposit. After you’ve had the secured card for eight months, Discover reviews your account monthly. If you’re using your card responsibly, Discover may return your security deposit after one of these monthly reviews.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
How does the Discover it Secured Credit Card work?
To get a Discover it Secured card, the first step is to apply. You can do this by visiting Discover’s website. You’ll find information about the card there, and you can either check to see if you’re pre-approved for the card or go right to applying for the card.
Clicking on the “Check Now” button will take you to Discover’s pre-approval form. This is where you provide information, including your name, address, date of birth, and social security number. You’ll also need to input financial-related details, including your total annual gross income, monthly mortgage or rent payment, and whether you have a checking and savings bank account.
Discover will obtain information from credit reporting agencies to determine eligibility for a credit card offer when you submit this form. Checking to see if you’re pre-approved does not impact your credit score.
If you go straight to the credit card application, the form you’ll submit is similar. In addition to your basic personal and financial information, you’ll need to have your bank account number. This is required because you’ll need to provide a minimum security deposit of $200.
The application page also includes important disclosures and information. Before submitting your application, you should read through the terms & conditions and the interest rates and fees.
After you’ve submitted your application, Discover will check your credit report and credit score to determine whether you’re approved for the card. This is called a “hard” inquiry, which can temporarily affect your credit score.
One of three things could happen after you’ve submitted your application:
- You could be instantly approved
- You could be instantly denied
- Your application could need further review before a determination is made
Discover allows you to check the status of your application either online or by phone. If you call the credit card application status phone number, you can ask the analyst if you can do anything to speed up the review process.
After approval, it typically takes 5 to 7 days for a new credit card to arrive.
How much does the Discover It Secured Credit Card cost?
The Discover it Secured card requires a security deposit, so this credit card has an upfront cost. You’ll need to pay a security deposit minimum of $200.
Beyond that, there are fees that you should be aware of. Each credit card has an annual percentage rate (APR) for purchases. If you don’t pay off your credit card bill each month, you’ll be charged interest on your principal balance based on the APR assigned to your card. The APR varies, but at the time of this writing, it is 26.74%. All APRs mentioned in this article are subject to change.
The APR for cash advances is slightly higher at 27.74%. A cash advance is when you borrow money against your line of credit. You’ll be able to determine your cash advance limit when approved for the credit card. You’ll also be charged a fee of either $10 or 5% of each cash advance you take out. Discover will charge whichever amount is greater, so you can plan on paying a minimum fee of $10 for each cash advance.
Discover forgives your first late payment on this card. For each late payment after, you’ll be charged up to $41 in late fees. Discover also charges $41 for returned payments.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
Discover it Secured Credit Card features
Discover’s secured credit card offers many attractive features for its cardholders.
Ability to build your credit
The top feature of this card is that it offers the opportunity to build your credit.
No annual fee
Unlike some credit cards, there is no annual fee to keep this account open.
Refundable security deposit
While you do have to put down a minimum security deposit of $200, the amount is refundable.
Ability to convert to a standard credit card
Discover will review your account monthly after it has been open for eight months. These reviews determine whether you qualify to convert to a standard, unsecured credit card. If you are eligible, that’s when you’ll receive your security deposit back.
0% Fraud Liability
If someone else accesses your account and makes an unauthorized purchase using it, you will not be held responsible for the unauthorized charges.
Cash back rewards
In addition to building your credit, this Discover card allows you to earn cash back on your purchases.
Gas stations and restaurants
You can earn 2% cash back on up to $1,000 in purchases each quarter.
Other purchases
For all other purchases, you can receive 1% unlimited cash back.
Cash back match
Discover offers an unlimited dollar-for-dollar match of all the cash back you earn within the first year of having your account. You’ll receive these rewards perks at the end of your first year.
Who is Discover it Secured Credit Card best for?
People with no credit history. If you’ve never had a credit card or taken out a loan, you probably don’t have any credit history. It’s usually a good idea to start building your credit history soon after turning 18. Your credit history shows lenders proof of your ability to pay back debts and whether you make your payments on time. A credit history is essential for significant life events such as buying a house and taking out a loan on a new car. However, it’s difficult to build credit when a credit card company can’t see proof of your ability to repay your debts! That’s why a secured card may be a good option to start building your credit as a first-time borrower.
People who need to rebuild their credit. Let’s say you already have a credit history, but it’s not particularly good. Some might even call it a bad credit history. In this case, you might have trouble finding a credit card issuer who will take a chance to approve someone with poor credit. Secured cards provide you with the opportunity to improve your credit. By requiring a refundable security deposit, card issuers can feel more comfortable approving you for a card. Your line of credit will equal your security deposit amount, which can also be good because it allows you to limit yourself so you don’t fall into the trap of borrowing more than you can afford.
Who shouldn’t use Discover it Secured Credit Card?
Experienced borrowers. If you already have a decent credit history, a secured card might not be your best option. Instead, you might consider looking into Discover’s other credit cards to see if you can qualify for one that does not require a security deposit. Discover allows you to check to see if you’re pre-approved for other cards besides the Discover it Secured card.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
Pros and cons
Pros
- The Discover It Secured Credit Card can offer the opportunity to build and improve a person’s credit history.
- There is no annual fee for the credit card.
- You can earn cash back on every purchase at a minimum rewards rate of 1%.
Cons
- You have to pay a minimum deposit of $200 for this credit card.
- There are no 0% APR intro offers.
- Your line of credit equals your security deposit amount, which means the line of credit could be as low as $200.
- This card has a variable APR, meaning it could change after you open your account.
Discover it Secured Credit Card vs. competitors
Credit card | APR | Annual fee | Security deposit | Rewards |
Discover it Secured Credit Card | 27.74% variable | $0 | Minimum of $200 | Earn 2% cash back at gas stations and restaurants and unlimited 1% cash back on all your other purchases |
Citi® Secured Mastercard® | 26.74% | $0 | Minimum of $200 | N/A |
Capital One Platinum Secured Credit Card | 29.99% | $0 | Minimum of $49, $99, or $200 | N/A |
Citi Secured
Citi Secured is a secured credit card that offers many of the same benefits as the Discover it Secured card. It allows you to build or rebuild your credit history and provides monthly reporting to all three major credit bureaus. Like the Discover It Secured card, Citi Secured requires a security deposit of at least $200 and assigns you a credit limit that is equal to your security deposit amount.
The Citi Secured card does not offer any cash back or other rewards. However, it does offer flexibility by allowing you to choose your payment date. It also gives you access to digital wallets and contactless pay to make using your card as convenient as possible.
Capital One Platinum Secured
The Capital One Platinum Secured card offers the same opportunity to build or rebuild credit as other secured cards. Some features make this card stand out among its competition, though. First, you’ll have the option of making a minimum security deposit of $49, $99, or $200 to open an account with an initial credit line of $200. You can also put down a security deposit of up to $1,000 if you want to raise your credit line.
To fund the Capital One Platinum Cashback Secured card, you’ll need to submit your deposit through an electronic funds transfer from your bank account. You can make payments toward your total security deposit, but you must have paid it in full within 35 days of being approved for the card. Each deposit you make toward the full security deposit must be at least $20 and in whole dollar increments. If Capital One does not receive the full security deposit within 35 days of account approval, it won’t be able to open an account for you.
Unfortunately, this card does not offer rewards such as cashback or matching programs. It does provide benefits in the form of no hidden fees, though. There are no foreign transaction fees, replacement card fees, or authorized user fees. Capital One also allows you to earn back your security deposit and upgrade to a standard, unsecured Platinum card if it’s determined that you qualify.
FAQs
How do I avoid paying interest and fees on a credit card?
The APR and fees can look scary, but there are ways to avoid having to pay them. It’s important to monitor your credit card account to be sure you’re aware of your statement balances and payment due dates. If you make on-time payments and always pay your statement balance or more, you’ll be able to avoid late payment fees and interest charges.
How does building credit work?
Using a credit card is a common way to build credit. When you have a credit card, you borrow against your credit line each time you use it. By using your credit and showing that you can repay your debts on time, you’ll build a good credit profile. The easiest way to do this is to use your credit card for everyday purchases instead of your debit card. Then at the end of your credit card’s billing cycle, pay off the credit card before your payment due date. Credit card companies submit information about your account to the three major credit reporting agencies — Equifax, Experian, and TransUnion. You can request a free credit report from these agencies annually to see where your credit stands.
Does Discover have a mobile app?
\nYes, you can access your Discover account via a mobile app on Apple and Android devices. You can use the app to set up and manage account alerts, check your balance, and make payments.
The bottom line
The Discover it Secured Credit Card is a good card for some people, but not for everyone. It’s mainly for individuals who don’t have any credit history or have a bad credit history. Discover requires a security deposit to be held as collateral for this card, which it does not require for traditional, unsecured cards.
For those who do need help building credit history, this card can be a great asset. It also offers some of the benefits you might expect with an unsecured card, such as rewards programs. It also provides an option to upgrade to an unsecured card after you’ve built up your credit history enough.
That being said, if you already have a decent credit history, there are other cards that you should consider. Fortunately, Discover offers plenty of traditional unsecured credit cards that do not require security deposits, most of which come with even better rewards than the Discover it Secured card. You can see which cards you qualify for by visiting Discover’s website and checking to see what you can get pre-approved for.
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Ashley Hart is a lead copywriter and digital marketing expert covering finance, law, real estate, music, entertainment, health and wellness.
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