Discover it Secured Review: Earn Rewards as You Build Credit

It's nice to find a secured credit card with a $0 annual fee. Even better is one that offers a path to upgrade to a regular card. This one does both — and it gives you rewards, too.

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Our Take

5.0

NerdWallet rating 
The bottom line:

When you consider the rewards, the lack of an annual fee and the opportunity for an upgrade, this is the best secured credit card we've seen.

Jump to: Full Review
Discover it® Secured Credit Card
Annual fee
$0
Regular APR
23.74% Variable APR
Intro APR
10.99% intro APR on Balance Transfers for 6 months
Rec. credit score
300-629 (Poor)
Apply now

on Discover's website, or call 800-347-0264

Pros & Cons

Pros

  • No annual fee

  • Reports to the three major credit bureaus

  • Qualify with limited/bad credit

  • Earns rewards

  • New cardholder bonus offer

Cons

  • Requires minimum deposit

  • High APR

Alternate Pick: No credit check
Capital Bank Open Sky Secured Credit Card
NerdWallet rating 
OpenSky® Secured Visa® Credit Card
Bad credit won't block your application

This card doesn't run a credit check on applicants, removing a major obstacle to getting approved. Additionally, you don't need a checking account; you can pay your deposit and your monthly bills with a money transfer or money order. One downside: There's an annual fee of $35.

Read our review

Compare to Other Cards

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Annual fee

$0

Annual fee

$35

Annual fee

$39

Regular APR

23.74% Variable APR

Regular APR

17.64% Variable APR

Regular APR

14.74% Variable

Intro APR

10.99% intro APR on Balance Transfers for 6 months

Intro APR

N/A

Intro APR

N/A

Recommended Credit Score
Recommended Credit Score
Recommended Credit Score
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Full Review

The Discover it® Secured Credit Card is the world-class sidekick you want when you lack a credit history or have bad credit. As a secured card, it far exceeds credit builders’ expectations in more ways than one.

Unlike most of its competitors, this card tells you when you might be able to graduate to a regular card and get your deposit back. Starting at seven months, Discover will review your account to determine whether you’re eligible for an upgrade. The card also features rewards — which are not generally offered on secured credit cards — and an annual fee of $0. It requires a security deposit of at least $200, but you can get that money back when you upgrade to a regular credit card or close the account in good standing.

Discover it® Secured Credit Card: Basics

Card type: Secured.

Annual fee: $0.

Security deposit: A minimum of $200. This amount determines your credit limit. Deposits can be as high as $2,500.

Bonus: 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.

Rewards: Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. All other purchases earn 1%.

APR: 10.99% intro APR on Balance Transfers for 6 months, and then the ongoing APR of 23.74% Variable APR.

Foreign transaction fee: None.

Other perks:

  • Payments are reported to the three major credit bureaus (TransUnion, Equifax and Experian), which helps you build credit.

  • Discover reviews your account starting at seven months to see if you qualify for a regular credit card.

  • Discover doesn't charge a late fee on the first late payment.

  • The issuer's Credit Scorecard lets you track your credit score.

  • Free Social Security number alerts notify you when your information is found on the dark web.

  • An on-and-off switch, called Freeze it, allows you to block new purchases, cash advances or balance transfers from the issuer's online portal or app. This can come in handy if your card goes missing.

Why you might want the Discover it® Secured Credit Card

More value in the form of rewards

It’s rare to find a secured credit card that offers rewards. With this card, 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: 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. Rewards don’t expire, and there’s no minimum redemption amount. They can be redeemed through direct deposit to a bank account or as a statement credit to your account, among other options.

The chance to upgrade to a regular credit card

After you’ve held the card for seven months, the company will begin automatic monthly reviews to see whether you’re ready to move to an unsecured card and get your deposit returned. When you do transition to a regular 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 enter good credit territory.

An annual fee of $0

You're already required to pay a security deposit on a secured card, so it's best to avoid an annual fee, if you can help it. This card's annual fee of $0 is one less obstacle for would-be applicants.

Why you might want a different credit card

The minimum deposit is $200

Although the $200 minimum security deposit on the Discover it® Secured Credit Card is relatively low, it can still be a barrier. In this regard, the Capital One Platinum Secured Credit Card could be a superior card. In some cases, you may be able to qualify for a minimum deposit of just $49 or $99 for a credit limit of $200 on this card.

Without a credit history, you can also consider the Petal® 2 "Cash Back, No Fees" Visa® Credit Card, which has no security deposit requirement. WebBank, Petal's issuing bank, can evaluate creditworthiness with an algorithm that analyzes your income, savings and spending. The card also earns up to 1.5% cash back with consistent on-time payments: It starts you off with 1% cash back on all purchases, but that goes up to 1.25% after six on-time payments and 1.5% after 12 on-time payments. It has an annual fee of $0.

It has a high ongoing APR

The interest on the Discover it® Secured Credit Card is not very attractive: It comes with 10.99% intro APR on Balance Transfers for 6 months, and then the ongoing APR of 23.74% Variable APR. If you plan to carry a balance, you may be better off with the $0-annual-fee DCU Visa® Platinum Secured Credit Card, which has a much better APR. The ongoing APR is 11.75% Variable — which is even lower than the rates on many unsecured cards. You'll need to qualify for membership at that credit union to be eligible for the card.

It requires a bank account

Because the security deposit for the Discover it® Secured Credit Card has to be funded by a bank account, this card is not a viable solution for some people. Unbanked consumers may be better off with the OpenSky® Secured Visa® Credit Card, which offers alternative funding options, even though that card has an annual fee of $35.

Learn about all your options by reading NerdWallet's roundup of the best credit cards.

Is the Discover it® Secured Credit Card 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 having an annual fee of $0.

Overall, unless you lack a bank account or can’t pay the $200 minimum deposit, the Discover it® Secured Credit Card should definitely be on your short list of secured credit cards.

on Discover's website, or call 800-347-0264

Methodology

NerdWallet reviews credit cards with an eye toward both the quantitative and qualitative features of a card. Quantitative features are those that boil down to dollars and cents, such as fees, interest rates, rewards (including earning rates and redemption values) and the cash value of benefits and perks. Qualitative factors are those that affect how easy or difficult it is for a typical cardholder to get good value from the card. They include such things as the ease of application, simplicity of the rewards structure, the likelihood of using certain features, and whether a card is well-suited to everyday use or is best reserved for specific purchases. Our star ratings serve as a general gauge of how each card compares with others in its class, but star ratings are intended to be just one consideration when a consumer is choosing a credit card. Learn how NerdWallet rates credit cards.
Frequently asked questions
What is the Discover it® Secured card?

A secured credit card works like a regular credit card, but it requires you to put up a security deposit as collateral. That deposit determines your credit limit. Secured cards are designed for people who are looking to build or rebuild their credit.

How much is the security deposit on the Discover it® Secured card?

The minimum security deposit is $200 to open a Discover it® Secured Credit Card account. You can choose to deposit more money to get a higher limit. The maximum credit limit is $2,500.

Can I get my security deposit back on the Discover it® Secured card?

After you've been a Discover it® Secured Credit Card cardholder for seven months, Discover begins automatically reviewing your account for a potential upgrade to a regular "unsecured" card. When you upgrade, your deposit will be returned to you. If you choose to close the card account while it's in good standing (meaning it’s paid in full), you’ll receive a refund in about two billing cycles.

Does the Discover it® Secured card earn rewards?

Yes. You’ll earn 2% cash back at gas stations and restaurants, on up to $1,000 in combined spending each quarter, and 1% cash back on all other purchases. The card also qualifies for Discover's signature "match" offer for new cardholders, which the issuer describes this way: "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."

Is Discover it® Secured the best secured credit card?

NerdWallet named the Discover it® Secured Credit Card as the best card for building credit in 2020. But it might not be the ideal choice for every person. See other top secured credit cards.

Does the Discover it® Secured have an annual fee?

No. You won’t pay an annual fee, but you will be required to pay a security deposit of at least $200 to open the card.

What credit score do I need to get the Discover it® Secured?

Since this card is designed to help build or rebuild credit, you can get approved even if you have a poor credit score. You must be at least 18 years old, have a Social Security number, a U.S. address and a U.S. bank account, and provide the security deposit.