Discover it® Secured Credit Card
- Sign-up Bonus: Double cash back in the first year (Cashback Match)
- 2% Rewards: 2% cash back on restaurant and gas station purchases, up to $1,000 in combined category purchases per quarter
- 1% Rewards: Unlimited 1% cash back on all other purchases
- Fees: No international transaction fee
- Annual Fee: None
- Max Credit Limit: $2,500 (minimum $200)
- Credit Needed: Below average
The Discover it® Secured Credit Card is a secured credit card with no annual fee and a cash back rewards program that’s fairly generous by secured credit card standards. It earns 2% cash back on gas station and restaurant purchases, up to $1,000 in combined quarterly spending, and unlimited 1% cash back on all other purchases.
If that sounds familiar, it’s because it’s the same cash back rewards terms as Discover it Chrome, a popular non-secured credit card that’s (understandably) known as the “Discover Gas and Restaurants Card” in some quarters.
Despite its solid rewards program, Discover it Secured Credit Card is mainly designed to help people with below average credit get back on track and rebuild their credit. Discover reports timely payment patterns and responsible credit usage to the three major credit bureaus, and offers the opportunity to graduate to a non-secured credit card after at least a year of responsible use. If you’re in the market for a credit-building tool, Discover it Secured Credit Card definitely deserves your consideration.
What Sets the Discover it Secured Credit Card Apart?
The Discover it Secured Credit Card has three notable features that set it apart from other secured credit cards:
- No Annual Fee. The Discover it Secured Credit Card has no annual fee. That’s unremarkable for a basic cash-back credit card but quite notable for the secured credit card space, where the norm is to charge an annual fee.
- Up to 2% Cash Back. You can earn up to 2% back on eligible purchases with the Discover it Secured Credit Card. Most secured credit cards don’t have rewards programs at all, or if they do, they top out at 1% back.
- Double Your First-Year Cash Back With Cashback Match. This is a “Discover special”: double cash back in the first year, no matter how much you spend. Few other credit cards, secured or not, can match it.
Key Features of the Discover it Secured Credit Card
These are the most important features of the Discover it Secured Credit Card. Note the initial deposit requirement and refund terms, initial credit limit and credit limit increase framework, and cash rewards program.
Double First-Year Cash Back
Though Discover it Secured Credit Card doesn’t have a traditional sign-up bonus, it does double all cash back earned within the first 12 billing cycles. For instance, if you earn $50 during your first year as a cardholder, you actually end the year with $100 in cash back rewards. This feature is known as Cashback Match, and it’s super popular with new cardholders.
Initial Deposit Requirement, Refund, and Potential Upgrade
The Discover it Secured Credit Card requires a minimum security deposit of $200 and a maximum deposit of $2,500. Your deposit amount is always equal to your credit limit, provided Discover deems your creditworthiness and income sufficient to handle your chosen limit. Your deposit does not earn interest.
Once 7 months have passed, Discover automatically reviews your account on a monthly basis to determine whether you qualify for an upgrade to an unsecured Discover credit card, such as Discover it or Discover it Chrome. If you do qualify for an upgrade, Discover refunds your deposit within 2 months.
Credit Limits and Limit Increases
If you wish to raise your credit limit, you can formally apply for an increase. If your application is approved, you’re required to make another security deposit equal to the amount of the increase. Your credit limit can’t exceed $2,500 at any time.
Earning Cash Back Rewards
This card earns 2% cash back on restaurant and gas station spending, up to $1,000 in combined quarterly spending across both categories. All other purchases, including restaurant and gas station purchases above the $1,000 cap, earn unlimited 1% cash back.
Redeeming Cash Back Rewards
You can redeem your accumulated cash back at any time and in any amount for account statement credits, electronic bank account deposits, and direct purchases with select online retailers. You can redeem for Discover-branded or third-party gift cards in $20 increments.
If there is no account activity for 18 months, discover automatically redeems the cash back you’ve accumulated up until that point.
Credit Bureau Reporting
Every billing cycle, Discover reports your payment patterns (including nonpayments) to all three major credit reporting bureaus. Regular reporting rewards responsible credit utilization and timely bill payments. If you meet those standards, your credit score will rise over time.
Free FICO Score
Each monthly statement comes with a free FICO credit score, which lets you see how your credit has changed (hopefully for the better) since the previous month. You can also access your FICO score through your Discover.com account at any time.
Discover’s Freeze It feature lets you suspend your card’s purchasing, cash advance, and balance transfer privileges on an indefinite basis. Previously scheduled transactions, recurring payments, interest, account fees, and certain other debits continue as usual when Freeze It is activated. This feature is useful if you lose your card or otherwise suspect that it is in danger of being used fraudulently.
There is no annual fee or foreign transaction fee. Other fees may apply — see rates and terms.
This card is designed for people with below average credit. A recent bankruptcy could pose problems for your application, but most other credit history blemishes are not likely to affect you.
Advantages of the Discover it Secured Credit Card
These are the most appealing benefits of the Discover it Secured Credit Card.
- No Annual Fee. The Discover it Secured Credit Card does not charge an annual fee. That’s great news for frugal cardholders seeking to maximize the value of its generous (for a secured card) cash back rewards program.
- Generous, Flexible Cash Back Rewards Program. For a secured credit card, the Discover it Secured Credit Card’s cash back rewards program isn’t half bad. It earns 2% cash back on restaurant and gas station spending, up to $1,000 per quarter in combined category spending. All other spending, including restaurant and gas station spending above the $1,000 quarterly cap, earns unlimited 1% cash back. It doesn’t matter how much or how little you earn – you can redeem accumulated cash back at any time, in any amount. By contrast, many secured cards, including BankAmericard Secured Credit Card, forgo cash back rewards altogether.
- Cash Back Doubled in First Year. Discover it Secured has a potentially powerful introductory benefit, known as Cashback Match, that magnifies new cardholders’ spending. No matter how much you spend and earn during your first 12 months as a cardholder, your cash back haul during that period is doubled – so, if you earn $100 cash back your first year, you get $200 total. Most other secured cards offer no introductory promotions at all, let alone one that doubles your cash back earnings over the course of a year.
- Monthly Account Review After 7 Months. Once you’ve had this card for 7 months, Discover puts your account through a monthly upgrade review. If you’ve responsibly used this card and other credit facilities (such as car and home loans), you may qualify for an upgrade to an unsecured credit card account. Such an upgrade entitles you to the return of your full security deposit.
- No Foreign Transaction Fee. This card has no foreign transaction fee. That’s a great perk for cardholders who travel abroad with any regularity, even on quick road trips to Mexico or Canada. And it’s somewhat unusual among lower-end credit cards without specialized travel rewards programs.
- No Penalty APR. Discover it Secured does not charge penalty interest. If you miss a payment due date due to liquidity issues or a scheduling oversight, you don’t have to worry about your rate shooting up. By contrast, many other secured credit cards, such as Citi Secured Mastercard, charge penalty interest approaching 30% APR on an indefinite basis.
Disadvantages of the Discover it Secured Credit Card
Consider these downsides before you apply for the Discover it Secured Credit Card.
- Relatively Low Credit Limit. Discover it Secured’s credit limit tops out at $2,500. The credit limits of many competing secured credit cards exceed $3,000, and some top $5,000. If you have an ample household budget and use this as your primary spending vehicle, this limit could cause cash flow issues.
- Moderately High Initial Deposit Requirement. When you open your account, you need to deposit at least $200. If you live paycheck-to-paycheck or maintain a very strict household budget, you’re likely to have trouble coming up with $200 in short order. Some competing cards, including the Capital One Platinum Secured Credit Card, require lower deposits – in Capital One’s case, just $49.
- Deposit Doesn’t Earn Interest. Discover it Secured Credit Card doesn’t pay interest on cardholders’ deposits. Though most secured cards don’t offer eye-popping returns, even $5 or $10 per year can be meaningful for penny-pinching cardholders.
How the Discover it Secured Credit Card Stacks Up
Before you apply for the Discover it Secured Credit Card, make sure there’s not another secured card that suits your needs better. One popular pick that could be a better choice (but isn’t guaranteed to be) is the Secured Sable ONE Credit Card.
Here’s how it stacks up against Discover it Secured.
|Discover it Secured
|Secured Sable ONE
|First-Year 2x Cash Back
|On eligible gas and restaurant purchases, up to $1,000 quarterly spend
|On eligible Amazon, Whole Foods, Uber/Uber Eats, Netflix, and select other purchases
|All other eligible purchases with no caps
|All other eligible purchases with no caps
|Flexible max (tied to deposit)
Most secured credit cards are decidedly no-frills. They’re designed to help struggling consumers rebuild their credit and get back on their financial feet, not bask in the glory of generous cash back rewards or travel perks.
The Discover it Secured Credit Card is a little different. While it’s not the most generous rewards credit card on the market by any stretch, its cash back program actually isn’t half bad, even by non-secured card standards. If you want a card that pays you back as you rebuild your credit, you could do worse than this one.