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Discover’s Secured Card: Earn Rewards as You Build Credit

February 21, 2016
Credit Cards, Credit Cards for Bad Credit
Discover it Secured Card
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If you have bad credit, there’s no reason you should also have a bad credit card. There are stellar options for secured credit cards out there, including the new Discover it® Secured. It comes with many of the best features of Discover’s non-secured credit cards, including generous rewards, an annual fee of $0, and free access to your FICO score so you can watch your credit score climb as your good habits pay off.

Intrigued? Let’s look at the details.

Discover it® Secured

Discover it® Secured

Apply Now on Discover's secure site
  • Recommended Credit Score
  • 300
  • Card Details
  • Pros

    • No annual fee
    • Reports to the three major credit bureaus
    • Offers rewards and a sign-up bonus
    • Chance to upgrade to unsecured account after 8 months


    • Requires minimum deposit of $200
    • Discover cards not widely accepted outside the U.S.

    Annual Fees



    • APR: 24.49% Variable APR
    • Cash Advance APR: 26.49%, Variable

    Bonus Offers

    Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

    Intro APR

    • 10.99% on Balance Transfers for 6 months
  • Additional Information
    • 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.
    • View Rates and Fees

Discover it® Secured: Benefits and basics

Like most other secured credit cards, the Discover it® Secured requires cardholders to put down a security deposit, which determines the card’s credit limit. Deposits can be as low as $200, which will provide a credit line of $200. The highest possible deposit, and therefore the highest possible credit limit, is $2,500. Applicants should expect to undergo a credit check and should have a steady income.

This card has several features that might leave other secured credit cards scrambling for customers.


It’s rare to find a secured credit card that offers rewards, but the Discover it® Secured is one of the few that does. You’ll earn 2% cash back on up to $1,000 in spending per quarter on gas and restaurant purchases, and an unlimited 1% back on all other purchases. You’ll also receive a one-time bonus: Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically. Rewards don’t expire, and there’s no minimum redemption amount. They can be redeemed for cash or Amazon credit at any time.

Credit-building help and a clear path to upgrading

It’s not ideal to tie up hard-earned money in the form of a security deposit on a credit card. People who are building credit for the first time, or rebuilding credit after some negative experiences, will naturally be eager to switch to a regular, unsecured credit card as soon as possible. The Discover it® Secured offers a few things that will help with that process.

  • The card offers free access to your FICO score, so you can see how you’re doing.
  • Discover will report your activity on the Discover it® Secured to all three credit bureaus, Experian, Equifax and TransUnion. That means responsible use can help you boost your credit score.
  • After you’ve held the card for eight months, the company will begin automatic monthly reviews to see whether you’re ready to move from the secured card to another Discover credit card product.
  • When you do transition to an unsecured Discover card, you’ll keep the same account. Because opening a new account can lower your credit score in some instances, this is great for people who are excited to be entering good credit territory.

» MORE: Discover credit cards mobile app review

Low fees

An annual fee of $0 isn’t unheard of among secured credit cards, but it’s definitely not the norm. Many secured cards squeeze vulnerable consumers by tacking on fees.

Discover keeps things affordable for cardholders in other ways, as well.

  • Your APR won’t skyrocket if you pay late, and you won’t be charged a late fee on your first late payment. While we love this feature, keep in mind that paying on time consistently is one of the most important things you can do to improve your credit score.
  • You won’t pay a foreign transaction fee. Many other credit card issuers charge foreign transaction fees equal to 3% of every purchase. Keep in mind, though, that Discover is less widely accepted abroad than Visa or MasterCard.

» MORE: Discover introduces secured card

Discover it® Secured: Pitfalls and other possibilities


The minimum deposit is $200.

Although it’s lower than that of many competitors, the $200 minimum security deposit for the Discover it® Secured is still a barrier for some people. In this regard, the Capital One® Secured Mastercard® is a superior card. Not only is the minimum deposit as low as $49, but you can pay in installments until you reach your required amount.

The credit limit is equal to the deposit.

Again, the Capital One® Secured Mastercard® has the Discover it® Secured beat. The Capital One® Secured Mastercard® allows some cardholders a credit limit that’s higher than the deposit. With the Discover it® Secured, you can only qualify for a credit limit equal to the amount you’ve provided as a security deposit.

You need a bank account to get this card.

Because the security deposit for the Discover it® Secured has to be funded by a checking or savings account, this card is not a viable solution for people who don’t have a traditional bank account. Unbanked consumers may be better off with the OpenSky® Secured Visa® Credit Card, even though that card’s $35.

The interest could be lower.

We’ve certainly seen higher interest rates for secured credit cards, but the interest on this card is not very competitive: 10.99% on Balance Transfers for 6 months, and then the ongoing APR of 24.49% Variable APR. If you plan to carry a balance, you may be better off with the Digital Federal Credit Union Visa Platinum Secured Credit Card, which has a much more attractive APR. The ongoing APR is 13.00% Variable APR — which is even lower than the rates on many unsecured cards.

You can also explore NerdWallet’s list of the best credit cards for more information on credit cards for building or rebuilding credit.

Is the Discover it® Secured right for you?

If you’re committed to building or rebuilding credit, a secured card can be very helpful, especially a card like this one that has a smooth process to help you transition to an unsecured card when you’re ready. This card also gets high marks for paying such generous rewards and for keeping its fees so reasonable.

Overall, unless you lack a bank account or can’t pay the $200 minimum deposit, the Discover it® Secured should definitely be on your short list of secured credit cards. For the rewards alone, you really can’t top this solid offering from Discover.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @vcmcguire.

Image via iStock.