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Credit Card Reviews

Discover it® Secured: Credit Building and Cash Back Combined

Secured credit cards are not known for perks and almost always charge a high annual fee. But the Discover it® Secured card stands out in the secured card crowd by offering cash back rewards, no annual fee, and a dollar-for-dollar match on all cash back earned the first year.

Pros:

  • No annual fee
  • Up to 2% cash back
  • No foreign transaction fees

Cons:

  • May not be accepted in all countries outside of the U.S.
  • High annual percentage rate (APR)

Experian Review

Secured credit cards are a great way to start building—or rebuilding—your credit. The Discover it® Secured card is one of the best secured cards available, offering easy approval, perks like cash back on every purchase, and a first-year cash bonus. These features, combined with no annual fee, make the Discover it® Secured card a top pick for people looking to build or improve their credit.

Stash More Cash With This Card's Benefits

Very few secured credit cards provide the chance to earn rewards. But the Discover it® Secured card offers this rare benefit—and pays out 2% cash back on restaurant and gas station purchases up to a combined $1,000 in purchases each quarter. You will earn an unlimited 1% back on everything else. These benefits are very similar to the Discover it® chrome card.

Another enticement is that new card members can get a cash back bonus at the end of their first year. Discover will automatically match all the cash back you've earned at the end of your first year—with no limit to how much is matched.

How Does Discover it® Secured Work?

To establish your Discover it® Secured credit line, you provide a refundable security deposit of at least $200 after being approved. Your credit limit will be equal to the amount of money you deposit. Afterwards, this card will operate just as any other credit card, and it looks like any other credit card as well.

You make purchases, then pay at least your minimum payment due every month. You can't use your security deposit toward your monthly payments; instead, the security deposit will be used to pay off your balance in the event that you become delinquent in your obligations. But as long as you keep your account in good standing, you can get the security deposit back if you close the account or if Discover transitions your account to another Discover credit card (more on that below).

How Does the Discover it® Secured Help Build Credit?

The Discover it® Secured reports your payments to Experian and the other two credit bureaus—Equifax and TransUnion. Some secured cards, especially ones from small and regional banks, may not report secured credit card accounts to all three credit bureaus. This is a key factor in choosing a credit card for rebuilding credit.

Another credit-building benefit is that after eight months, Discover will automatically review your account to see if you qualify to be transitioned to an unsecured line of credit, further helping your credit profile. To qualify, you'll need to exhibit good financial behavior, such as always paying your secured card bill and all your other accounts on time. If your account is upgraded to an unsecured Discover card, all your rewards earned will carry over to your new card.

Caveats and Considerations With Discover it® Secured

Like many other secured cards, Discover it® Secured has a high interest rate: 24.74% variable. With a monthly interest rate this high, all the cash back benefits you receive could be dust in the wind if you don't manage your spending and pay off your balance at the end of every month. Remember, only charge what you can afford to pay back.

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