Who Is This Credit Card Best For?
The Discover it Secured is one of the best picks around for anyone who wants to build or rebuild credit. You’ll earn cash-back rewards while making on-time payments that can bolster your credit history. Also, the card is a great fit if you spend at least $1,000 on dining and gas every three months. Finally, the automatic Cashback Match you get the first year is an extra bonus, too, if you’re looking for an easy way to maximize your rewards.
Because the card is geared toward people aiming to improve their credit score, Discover takes a more lenient approach when it comes to credit qualifications. That doesn’t mean that every application is guaranteed approval. But if you are denied, Discover will tell you why and which score it used to assess your application.
Automatic upgrade to an unsecured card when eligible
Rare access to rewards
First late fee waived
End-of-year cash-back match
No foreign transaction fee
Mediocre maximum credit limit
Low cap on rewards
- Automatic upgrade to an unsecured card when eligible: The Discover it Secured Card not only reports credit activity to all three credit bureaus, but it does automatic monthly reviews starting at eight months to see if your account qualifies to "graduate." With responsible account management, you will be upgraded to an unsecured card. All card terms will stay the same, and your deposit will be returned.
- Rare access to rewards: It’s satisfying to see extra cash come your way when you’re working hard to establish credit, and it’s refreshing that Discover doesn’t reserve rewards for its unsecured customers only.
- First late fee waived: New users or those just getting back on their feet sometimes face a learning curve, which is why Discover doesn’t charge a fee the first time you miss a payment due date. That said, don’t be late—the goal of a secured card is to prove that you can use credit responsibly, and late payments will have a negative impact on your credit file.
- End-of-year cash-back match: Like it does with other cards, Discover matches all of the cash-back rewards earned after your first 12 billing periods. The matching reward will automatically show up in your account one or two billing periods later.
- No foreign transaction fee: The Discover it Secured is one of the few secured cards that won’t charge fees for purchases made abroad, a big plus for travelers.
- Mediocre maximum credit limit: This card’s credit limit is between $200 and $2,500. If you have the means to pay a large deposit, you could get a higher credit limit on another secured card, such as the BankAmericard Secured Credit Card.
- Low cap on rewards: The 2% cash back is far better than most secured cards offer, but you’ll only get that rate on the first $1,000 you spend on gas and dining out each quarter. After that you’ll earn 1% back on those purchases (along with everything else you buy with the card).
Discover it Secured Card Bonus for New Cardholders
A secured card with rewards is impressive enough, but a welcome bonus is unusual. At the end of your first year with the card, Discover will double all the cash back you’ve earned so far. So, if you earned $200, Discover would match it with another $200.
Using average U.S. household spending from the Bureau of Labor Statistics as a base, we estimate the average credit card eligible spending to be $20,524 a year. Our calculation excludes things like housing, cars, pension contributions etc. that are not normally done or bought with credit cards. That means your bonus could be worth about $245 in cash back the first year if you can spend $1,000 a quarter in the 2% categories.
The card is great for people who might not otherwise meet the spending or minimum credit requirements of a card offering a traditional new cardholder bonus (where you get $300 for spending $3,000 in the first three months, for instance.). With this card, you have a full 12 months to earn rewards eligible for the bonus.
Earning Points & Rewards
You’ll earn 2% cash back at gas stations and restaurants on up to $1,000 of spending each quarter, plus unlimited 1% cash back on all other purchases. Those are superior earnings for a secured card, and are even on par with some entry-level unsecured credit cards.
Cash- back rewards never expire and can be redeemed in any amount. At the end of year one, Discover also doubles whatever you’ve earned. We believe you can earn as much as $245 a year in rewards if you can maximize the 2% bonus every quarter.
Discover it Secured rewards come in the form of cash back, meaning they can be redeemed for cash at any time, in any amount, as a statement credit or via transfer to a bank account. You can also use your cash back when checking out at Amazon.com if you link your Discover it card to your Amazon account and use the card for the purchase. Or, you can redeem for gift cards or as a donation to select charities.
If you close the account or are inactive for 18 months, Discover will automatically credit your account with your cash-back balance.
How to Get the Most Out of This Card
Don’t lose sight of what the card’s true purpose is: to improve credit. While the rewards are an excellent fringe benefit, avoid using a large portion of your credit limit (which will be between $200 and $2,500) while you’re trying to up your score. That’s because credit utilization, or how much available credit you use, is a key factor in determining your credit score. Experts recommend keeping it as low as possible—definitely below 30% of your limit at any point.
For example, if your account were to have the maximum credit limit of $2,500, you should aim to keep your card balance at $750 or below.
Use the card in moderation—perhaps stick with gas and dining purchases, since those earn higher rewards. But most importantly, be vigilant about paying off your bill in full each month. With its high APR, carrying a balance for just a month or two on this card could wipe out any cash-back earnings.
J.D. Power ranked Discover second highest for customer satisfaction among U.S. credit card companies in 2020. Discover only missed first place by a single point. Discover’s 100% U.S.-based customer service is available 24/7 by phone or through online chat, and you can pay your bill up to midnight (ET) the day it's due. Discover offers complimentary access to your FICO credit score, accessible online, or on your monthly statement.
Protecting your personal information is important for everyone, but especially if you’re building credit. Errors on your credit report could put your score at further risk.
Discover offers complimentary alerts if your Social Security number is at risk on the dark web, as well as any time, or a new credit card, mortgage, car loan, or other activity appears on your credit report. That’s helpful because if you didn’t apply for a new account, it could be a sign that a thief has opened one in your name.
What’s more, should something suspicious happen or you misplace your card, you can freeze your account in seconds either via the mobile app or website. If your card is lost, Discover will mail you a replacement overnight within the U.S. Like most issuers, Discover has $0 fraud liability: If there are unauthorized purchases on your card, you won’t be on the hook for them.
Discover it Secured’s Fees
The card stands out from other secured credit cards in that it does not charge an annual fee, foreign transaction fee, or late fee the first time you pay after the due date.