The Discover it® Secured Credit Card is one of the best options for applicants seeking to build credit scores, since it offers a good cashback rewards program.
Discover has a great secured credit card option for those seeking to rebuild credit while avoiding costly fees: the Discover it® Secured Credit Card. The card provides the ability to earn cashback rewards on every purchase, as well as the chance to establish or rebuild one’s credit history. These features make the Discover it® Secured Credit Card one of the best credit cards for people with bad credit.
Review: Is the Discover it® Secured Credit Card good for rebuilding credit?
Very few credit cards for people with bad credit will offer as much as the Discover it® Secured Credit Card. The card provides users with as much as 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases - automatically. Usually, having a subprime credit score means you have to settle for less than stellar options, but the Discover it® Secured Credit Card has changed up the secured credit card scene in a major way.
We recommend individuals only charge purchases to it that they can afford to pay off at the end of each month. Otherwise, any positive effects of the cash back rewards will be eaten away by interest fees, and you’ll be walking away with a net loss.
Bottom line: The Discover it® Secured Credit Card is one of the best credit cards for rebuilding credit.
Discover it® Secured Credit Card benefits and features
Unlike a lot of secured credit cards, the Discover it® Secured Credit Card comes with a rewards program.
Cardmembers get 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases - automatically.
In this way, the Discover it® Secured Credit Card is similar to the Discover it® chrome.
In lieu of a traditional sign-up bonus, the Discover it® Secured Credit Card will match all the cash back you earn at the end of your first year, if you’re a new cardmember.
This is one of the best credit card bonuses we’ve seen, though your mileage may vary — this bonus is proportional to how much you put into spending on the card. In the realm of secured credit cards, however, bonuses are few and far between. Therefore, even a small cashback reward can be great for individuals with bad credit.
Account reviews starting at eight months
After eight months as a Discover it® Secured Credit Card cardmember, you'll start receiving automatic reviews to see if you qualify for an upgrade to another Discover it® card without a security deposit. In order to qualify, cardholders will need to exhibit good financial behavior, such as paying their bills on time. If approved, the security deposit will be returned to users and a new card will be mailed to them. The transition will likely be seamless, and all the old rewards users would have earned up until this point carry over to their upgraded card.
How does a security deposit work?
Cardholders must deposit at least $200 to their Discover it® Secured Credit Card 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’re 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 event 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.
Reports to all three major credit bureaus
The Discover it® Secured Credit Card reports your payments to all three major credit bureaus:
This is a key factor in choosing a credit card for rebuilding credit. Some secured cards, especially ones from small or 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 Credit Card compare against other cards?
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 Credit Card performs when compared to some of its leading competitors.
Discover it® Secured Credit Card vs. Secured Mastercard® from Capital One
The Secured Mastercard® from Capital One is another top-notch secured credit card that could 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. You’re required to deposit a minimum amount of $49, $99 or $200 (note, you’ll need access to an authorized bank account to make your security deposit).
Unlike the Discover it® Secured Credit Card, the Secured Mastercard® from Capital One isn’t a rewards credit card. Therefore, you won’t receive any money back by using the card. As long as you don’t need the extra credit line the Secured Mastercard® from Capital One offers, we recommend the Discover it® Secured Credit Card from a pure value standpoint.
Discover it® Secured Credit Card vs. Citi® Secured Mastercard®
The Discover it® Secured Credit Card is a much better offer than the Citi® Secured Mastercard®, as the latter comes with no rewards.
One possible advantage of the Citi® Secured Mastercard® is the fact that the Mastercard is generally more accepted worldwide than Discover. So, if you travel and would like to use your credit card outside of the U.S., it will likely be easier to do so with the Citi® Secured Mastercard®.
All else being equal, we recommend consumers favor the Discover it® Secured Credit Card over the Citi® Secured Mastercard® option.
Is the Discover it® Secured Credit Card worth it?
For cardholders attempting to improve their credit scores, the Discover it® Secured Credit Card is one of the best options on the market. With a mere $200 deposit you can start establishing your credit history, and you can get your deposit back in as little as eight months with responsible credit usage. Plus, you get the benefit of a great rewards program.
The information related to Discover it® Secured Credit Card, Secured Mastercard® from Capital One and Citi® Secured Mastercard® has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.