Capital One Secured vs. Discover it Secured: Low Deposit or Solid Rewards?

The Capital One Platinum Secured Credit Card and the Discover it® Secured Credit Card are among the most popular credit cards for people building or rebuilding credit. Since they're secured credit cards, each requires a cash security deposit to open an account, which will be refunded when you close or upgrade the card.

Here's how the cards stack up:

At a glance

What's the same for both

• Neither card charges an annual fee or foreign transaction fees.

• Both require a security deposit.

• Both are available to people building or rebuilding their credit. However, acceptance is not guaranteed. You must meet income and other requirements.

Security deposit and credit limit

With most secured credit cards, your deposit must be equal to your credit line. For a $500 credit line, for example, you must deposit $500.

• Capital One Platinum Secured Credit Card: Get a $200 line of credit with a deposit of $200, or for those who qualify, $49 or $99. Deposit more money before you open your account to get a higher credit line, up to a maximum of $1,000. In addition, you can pay your deposit in installments of $20 or more before the card is activated, allowing you to spread it across multiple paychecks.

• Discover it® Secured Credit Card: The minimum deposit is $200; the maximum, $2,500.

WHICH IS BETTER?

The Capital One Platinum Secured Credit Card is the rare card that allows for a deposit lower than the credit limit (in some cases) and that allows the deposit to be paid in installments. Secured card deposit requirements can be a hurdle for people trying to build credit; this card's features make that hurdle a little easier to clear.

Interest rate

• Capital One Platinum Secured Credit Card: The ongoing APR is 29.99% Variable APR.

• Discover it® Secured Credit Card: Introductory APR of 10.99% intro APR on Balance Transfers for 6 months, and then the ongoing APR of 28.24% Variable APR.

WHICH IS BETTER?

Both cards have a high ongoing interest rate, which is standard for cards for bad credit. The Discover it® Secured Credit Card gains a slight edge for offering a lower rate on balance transfers for an introductory period. Still, it's best not to carry debt on either card. Pay your bill in full every month, and you won't pay any interest.

Rewards

• Capital One Platinum Secured Credit Card: None.

• Discover it® Secured Credit Card: The rewards set this card apart from nearly every other secured credit card: a generous rewards structure. You’ll earn 2% cash back at restaurants and gas stations, on up to $1,000 spent each quarter, and 1% back on all other purchases. Plus, there’s a bonus for new cardholders: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.

WHICH IS BETTER?

The rewards on the Discover it® Secured Credit Card are better than those offered on many unsecured credit cards designed for people with good credit. It's the hands-down winner here.

Upgrade opportunities

• Capital One Platinum Secured Credit Card: Capital One doesn't spell out a procedure for upgrading to a better card when your credit improves. However, the issuer does say that if you pay on time for as little as six months, you may gain access to a higher credit line without having to deposit additional money.

• Discover it® Secured Credit Card: After seven months, Discover automatically begins reviewing your account for a possible upgrade to a regular card.

WHICH IS BETTER?

The purpose of getting a secured card is to build your credit so you can move up to a better card. The Discover it® Secured Credit Card makes that process seamless with its automatic account reviews.

Other features

• Capital One Platinum Secured Credit Card: You can choose your own payment due date. You get free access to your TransUnion VantageScore. As a Mastercard, it's widely accepted both in the U.S. and abroad.

• Discover it® Secured Credit Card: The card waives the late fee on your first late payment. You get free access to your FICO score. Discover is widely accepted in the U.S., but considerably less so overseas.

WHICH IS BETTER?

Although you don't want to make a habit of paying late, the Discover it® Secured Credit Card lets the first instance slide, which is a nice favor to those still learning how to use credit responsibly. (The waived fee doesn't mean you can just blow off one payment, though. Payments more than 30 days late will affect your credit score.) If you're looking for a card to use outside the U.S., though, the Capital One offering is a better bet.

Which should you get?

Both cards are good products that can help you build or rebuild your credit. In general, though:

The Discover it® Secured Credit Card wins our nerdy hearts. With its outstanding rewards and straightforward upgrade process, it has long been our favorite secured credit card.

The Capital One Platinum Secured Credit Card can make it easier to get an account up and running with its lower minimum deposit for some applicants, the ability to make the deposit in installments and the access to a higher credit line after establishing a record of timely payments. If deposit requirements have been blocking you from getting a secured card in the past, consider this card.

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