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The Discover it® Secured Card - No Annual Fee: Is It A Good Value?

Opinions, analyses, reviews, or recommendations expressed here are the author’s alone, and have not been reviewed or endorsed by the issuer. We may be compensated through the issuer’s Affiliate Program. For a full list of our advertisers, including American Express, see our disclosure page.

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"With no annual fee and a cash back rewards program, this is one of the best credit cards for rebuilding credit."

Contents

Discover just announced the launch of a new secured credit card option: the Discover it® Secured Card ­- No Annual Fee. The card provides both the ability to earn cash back rewards on every purchase, as well as the chance to establish/re-build one’s credit history. These features, combined with the fact that the card has no annual fee, makes the Discover it® Secured Card ­- No Annual Fee one of the best credit cards for people with bad credit.

Good For… Bad For…
  • Rebuilding one's credit history
  • Carrying a balance month-to-month
  • Earning cash back rewards
  • Getting an extended credit limit

Review: Is the Discover it® Secured Card ­- No Annual Fee Good For Rebuilding Credit?

Very few credit cards for people with bad credit will offer as much as the Discover it® Secured Card ­- No Annual Fee. The card provides users with as much as 2% cash back restaurant or gas purchases up to a combined $1,000 in purchases each quarter, and an unlimited 1% back on all else – all this for no annual fee. Usually, having a subprime credit score means you have to settle for less than stellar options or high annual fees, but the Discover it® Secured Card ­- No Annual Fee has changed up the secured credit card scene in a major way.

Since it has a very high APR, you should always pay off your balance in full each month. Like a lot of other secured cards, the Discover it® Secured Card ­- No Annual Fee has an unfortunately high interest rate of 23.99%. Because of this, we recommend indiviuals only charge purchases to it that they can afford at the end of each month. Otherwise, any positive effects of the cash back rewards will be eaten away by interest fees, and you will be walking away with a net-loss.

Bottom Line: The Discover it® Secured Card ­- No Annual Fee is one of the best credit cards for rebuilding credit. If you have a FICO score below 670, this card is a solid option for building up your score.

Discover it® Secured Card ­- No Annual Fee Benefits & Features

Unlike a lot of secured credit cards, the Discover it® Secured Card ­- No Annual Fee comes with a rewards program. Cardmembers get 2% cash back at restaurants or gas stations up to $1,000 in combined purchases each quarter. All other spending will earn an unlimited 1% back. In this way, the Discover it® Secured Card ­- No Annual Fee it is very similar to the Discover it® chrome.

Annual Fee $0
Purchase APR 23.99% Variable
Card Details
  • 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 restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • New! Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

In lieu of a traditional signup bonus, the Discover it® Secured Card ­- No Annual Fee will double all the cash back you earn at the end of your first year, if you are a new cardmember. This is one of the best credit card bonuses we’ve see, though your mileage may vary. This bonus is proportional to how much you put into spending on the card. The average credit card bonus is valued at $211, meaning you would have to spend at least a minimum of $17,100 on your card during the first year to match it. In the realm of secured credit cards, however, bonuses are rare and few between. Therefore, even a small cash back reward can be great for individuals with bad credit.

According to Jerry Young, Director of Acquisition at Discover, after 8 months as a Discover it® Secured Card ­- No Annual Fee cardmember, cardholders will be considered for an upgrade to one of the other Discover it cards. In order to qualify, cardholders will need to exhibit good financial behavior – paying their bills on time, etc. If approved, the security deposit will be returned to users and a new card will be mailed to them. The transition will be seamless, and all the old rewards users would have earned up until this point will carry over to their upgraded card.

Secured Credit Card Features

Cardholders may deposit anywhere between $200 and $2,500 to their Discover it® Secured Card ­- No Annual Fee account. Your credit limit will be equal to the amount of money you deposit. Afterwards, this card will operate just as any other credit card. You are not allowed to use your security deposit towards your monthly payments. Instead, the security deposit will be used to pay off your balance in the even that you become delinquent in your obligations. As long as your account remains in good standing, and you pay off all your debts, you can always get the security deposit back by closing your account. 

The Discover it® Secured Card ­- No Annual Fee reports your payments to all three major credit bureaus – TransUnion, Equifax, and Experian. This is a key factor in choosing a credit card for rebuilding credit. Some secured cards, especially ones from small and regional banks, may not report secured bank accounts to the proper institutions. In such a case, your good credit history will go unrewarded. We urge consumers to always verify whether a card reports to the credit bureaus before applying.

How Does the Discover it® Secured Card ­- No Annual Fee Compare Against Other Options?

In order to make the best decision, consumers should apply for a credit card only after weighing several different options. This section explores how the Discover it® Secured Card ­- No Annual Fee performs when compared to some of its leading competitors.

Discover it® Secured Card ­- No Annual Fee vs Capital One® Secured Mastercard®

The Capital One® Secured Mastercard® is another top-notch secured credit card that may be perfect for individuals in need of a higher credit limit. While most secured credit cards will extend a credit limit equal to one’s security deposit, Capital One provides the option to give users a little extra credit line. If you deposit more than your minimum required amount you can get your credit line extended even further. The minimum amount will vary between $49, $99, and $200 – based entirely on your creditworthiness. Unlike the Discover it® Secured Card ­- No Annual Fee, the Secured Mastercard from Capital One isn’t a rewards credit card. Therefore, you will not receive any money back by using the card. As long as you don’t need the extra credit line the Capital One card offers, we recommended the Discover it® Secured Card ­- No Annual Fee from a pure value standpoint.

Discover it® Secured Card ­- No Annual Fee vs Citi® Secured Mastercard®

The Discover it® Secured Card ­- No Annual Fee is a much better offer than the Citi® Secured Mastercard®. The latter comes with no rewards and no ability to upgrade to a better credit card account. Both of these cards also have equal qualification requirements, since they are intended for individuals with damaged credit. One possible advantage of the Citi® Secured Mastercard® is the fact that the Mastercard is generally more accepted worldwide than Discover. If you travel, and would like to use your credit card outside of the U.S. it will be easier to do so with the Citicard. All else being equal, we recommend consumers favor the Discover it® Secured Card ­- No Annual Fee over the Citi option.

Compare Credit Cards Based On Your Spending

If you’re wondering how the Discover it® Secured Card ­- No Annual Fee compares against other credit cards on the rewards front our interactive tool can give you an idea. Input your estimated monthly expenditures in the tool below to calculate the estimated net rewards over a 2-year period.

Edit Monthly Spend: $1,430
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Card Annual Fee 2-yr Net Rewards Rate

The Net Rewards Rate is equal to the Rewards Value over two years divided by the total spending. The total spending is equal to the values entered into the tool and multiplied by 24 months. See the Rewards Value note to see details on how it is calculated.

The estimates here are ValuePenguin's alone. They are not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Bonus Value

The bonus field shows our estimate for the value of the card’s sign-up bonus. If the bonus is point or mile based, we multiply the total bonus points/miles by our estimate for their value to arrive at a dollar equivalent. We display $0 if there is no bonus or if the user doesn’t qualify for the bonus based on the current spending entered into the tool.

The estimates here are ValuePenguin's alone. They are not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

2-yr Rewards Value

The Rewards Value is calculated by adding together the rewards earned from charging purchases to the card over two years and any sign-up bonuses (if applicable). They are then multiplied by our estimated point/mile value, with any annual fees (if applicable) subtracted. All values are based on our own estimates for the dollar value of any points, miles or bonuses earned using a card.

The estimates here are ValuePenguin's alone. They are not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Discover it® Secured Card ­- No Annual Fee
$0 1.43%
$171
Discover gives a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically. (New cardmembers only)
$514
Graph Card Read Review More Details
Annual Fee $0
APR 23.99% Variable

Card Details

  • 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 restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • New! Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 343 x $1 = $343
Bonuses
171 x $1 = $171
Total Net Estimated Rewards Through 24 Months 514
Savings Secured Visa Platinum Card
No Annual Fee 0.95%
$0
$343
Graph Card Read Review More Details
Annual Fee No Annual Fee
APR 6.99%

Card Details

  • Earn 1 Flexpoint reward for each dollar you spend
  • Flexpoints can be earned on any net purchases at the rate of 1 per dollar

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 34,320 x $0.01 = $343
Total Net Estimated Rewards Through 24 Months 343
Navy Federal nRewards Secured Credit Card
No Annual Fee 0.48%
$0
$172
Graph Card More Details
Annual Fee No Annual Fee
APR 8.99%

Card Details

  • Earn 1 nRewards point for each dollar you spend
  • nRewards can be earned on any net purchases at the rate of 1 per dollar

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 34,320 x $0.005 = $172
Total Net Estimated Rewards Through 24 Months 172
Capital One® Secured Mastercard®
$0 0.00%
$0
$0
Graph Card Read Review More Details
Annual Fee $0
APR 24.99% (Variable)

Card Details

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide

Note: The information in this box was provided by Capital One® and is not part of our independent analysis.

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 0 - $0
Total Net Estimated Rewards Through 24 Months 0
DCU Visa Platinum Secured Credit Card
No Annual Fee 0.00%
$0
$0
Graph Card More Details
Annual Fee No Annual Fee
APR 11.5%

Card Details

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 0 - $0
Total Net Estimated Rewards Through 24 Months 0
Citi® Secured Mastercard®
No Annual Fee 0.00%
$0
$0
Graph Card Read Review More Details
Annual Fee No Annual Fee
APR 21.99%

Card Details

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 0 - $0
Total Net Estimated Rewards Through 24 Months 0
U.S. Bank Secured Visa Card
$35 -0.19%
$0
$-70
Graph Card More Details
Annual Fee $35
APR 20.99%

Card Details

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 0 - $0
Less Annual Fees -$70
Total Net Estimated Rewards Through 24 Months -70
BankAmericard Secured Credit Card
Image of BankAmericard Secured Credit Card $39 -0.22%
$0
$-78
Graph Card More Details
Annual Fee $39
APR 20.24%

Card Details

Estimated Rewards Through 24 Months

Card Rewards Estimated Rewards Value Dollars*
Spending Rewards 0 - $0
Less Annual Fees -$78
Total Net Estimated Rewards Through 24 Months -78

Comments and Questions

* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the "Apply Now" button, you can review the credit card terms and conditions on the issuer's website.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program. 

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Advertiser Disclosure: Some of the offers that appear on this website are from companies which ValuePenguin receives compensation. This compensation may impact how and where offers appear on this site (including, for example, the order in which they appear). The site does not review or include all companies or all available products. For more information please see our Advertiser Disclosure.