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Credit Card Reviews

Discover it® Secured Review: Few Fees and Good Rewards

Credit card issuers offer secured cards—cards that require a security deposit—for people who are new to credit or want to rebuild their credit. These cards can carry the burden of high fees and few benefits. The Discover it® Secured credit card is an exception that gives you the chance to build your credit without the downsides that can come with a secured card.

Customer service contact info for Discover
1 (800) 347-2683

Discover Financial Services
P.O. Box 30943
Salt Lake City, UT 84130-0943

ProsCons
No annual feeHigh purchase APR
No foreign transaction feesCards from other networks may be more widely accepted
Earn cash back rewards on purchasesRewards can tempt you to purchase more
Potential for early deposit return

Experian Review

The Discover it® Secured credit card has several standout features. There's no annual fee, no foreign transaction fee, and Discover waives the cardholder's first late fee. Additionally, you'll earn cash back rewards on purchases that Discover will match at the end of your first year if you're a new cardholder.

As with other top-notch secured cards, your payments are reported to all three major credit bureaus (Experian, TransUnion and Equifax). But unlike many secured cards, Discover might refund your security deposit and let you keep your account once you've had the card for at least eight months.

Few Fees to Worry About

If you're looking for a secured credit card, chances are you don't have excellent credit, and your options may be limited. Many of the secured cards you come across may have an annual fee. Some cards even have an application fee and monthly maintenance fee in addition to an annual fee.

In stark contrast, the Discover it® Secured credit card offers:

  • No annual fee
  • No application fee
  • No monthly fees
  • No foreign transaction fees
  • No penalty annual percentage rate (APR)
  • No late fee the first time you're late (up to $39 after that)

Paying an annual fee for a credit card isn't necessarily a bad thing when the card offers outstanding rewards value—but if you can get the same benefits without an annual fee, that's likely the better option.

Earn Cash Back From Your Purchases

With the Discover it® Secured card, you earn cash back rewards on all your purchases. You get:

  • 2% cash back on up to a combined $1,000 in purchases at gas stations and restaurants each quarter.
  • 1% cash back on other purchases.
  • Plus, Discover will match the cash back a new cardholder earns during their first year.

Rewards programs may be a benefit or a drawback depending on how you tend to use your credit cards. On one hand, you can earn cash back on purchases you would have made otherwise and save money overall.

But if you tend to max out credit cards and have trouble controlling impulse purchases, a rewards program may nudge you to buy things you may not have otherwise. When that's the case, you may be better off with a secured card that doesn't offer rewards.

Otherwise, using a large portion of your available credit could lead to a high utilization rate, which can hurt your credit. Carrying a balance month to month can cost you more in interest than you earn with rewards.

You May Be Able to Transition to an Unsecured Card

As with other secured cards, you'll need to put down a refundable security deposit to open the Discover it® Secured credit card. Your security deposit will determine your card's credit limit. It must be at least $200, but can be up to $2,500 if you'd prefer a higher limit (and if your creditworthiness allows).

People who use a secured card to build credit might choose to apply for an unsecured card once they can qualify and then close their secured card to get their security deposit back. Fortunately, you might not have to do this with the Discover it® Secured card.

After eight months, Discover will begin automatically reviewing your account and credit history each month. Depending on your overall creditworthiness, Discover may refund your security deposit. You can then keep your Discover card open and continue to build credit while earning rewards.

Convenient Account Management Features

Discover offers a lot of convenient features and benefits to customers with the Discover it® Secured card. These can help you protect your personal information, inform you when your information is compromised and make it easier to manage your credit card. Features include:

  • Zero fraud liability for unauthorized purchases
  • 24/7 account monitoring for fraudulent activity, and notifications if Discover suspects something is amiss
  • Free overnight replacement cards to a U.S. street address if your card is lost or stolen
  • The ability to lock and unlock your credit card using the website or mobile app
  • Social Security number monitoring and alerts if Discover finds it on the dark web
  • Credit report monitoring and alerts if an account is opened in your name and appears on your Experian credit report
  • Free FICO® Score* monitoring
  • Cash back at the register at participating retailers at your purchase APR

You can manage your credit card through your online account or the Discover mobile app. In addition to checking your balance or making a payment, you'll find helpful features, such as the recurring charges dashboard where you can easily review the repeat expenses that wind up on your credit card. And, if you have any questions, you can reach Discover's U.S.-based customer service line at any time.

Additional Info

Purchase APR: 24.49% VariableGrace period: 25 days
Transfer APR: 10.99% for 6 months from your first transfer if your transfer posts before January 10, 2020. Otherwise, it's 24.49% VariableAnnual fee: $0
Cash advance APR: 26.49%Balance transfer fee: 3% of the amount transferred for transfers that post before January 10, 2020. Otherwise, 5% of the amount transferred.
Minimum interest charge: $.50Cash advance fee: 5% with a $10 minimum
Foreign transaction fee: $0 None
Late payment fee: None the first time, up to $39 after that.
Returned payment fee: Up to $39

Authorized-User Policy

You can add an authorized user to your card account to help someone else build credit and make purchases as well. The authorized user can use their copy of the card to buy things, and they can also review the account's information, initiate transaction disputes, request a balance transfer or get a cash advance. As the primary cardholder, you'll be responsible for paying all the charges and fees—but you'll get all the rewards from both cards' purchases.

As you're likely opening the Discover it® Secured card to build credit, you'll want to set clear expectations with the authorized user before you add them to your account. While keeping the account's balance low and paying the bill on time could help both of you, a high account balance and late payments could wind up hurting your credit scores and your authorized user's credit scores.

Is the Discover it® Secured Credit Card Right for You?

If you're looking to build or rebuild your credit with a secured card, this card should certainly be near the top of your list.

The Discover it® Secured card's lack of fees and potential to graduate to an unsecured card make it a cheaper and more convenient option than competitors. The rewards program can save you money, but consider how you tend to use credit cards and whether the lure of rewards may lead you to overspend rather than focus on building credit.

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