The Discover it® Secured Credit Card is one of the most highly regarded secured credit cards on the market, offering an excellent pathway to build or rebuild credit while enjoying rewards that are often not associated with secured cards. This card stands out for its unique features, rewards program, and customer-friendly terms, making it an ideal choice for individuals looking to establish or strengthen their credit history.
What is a Secured Credit Card?
Before diving into the specifics of the Discover it® Secured Credit Card, it’s important to understand what a secured credit card is. Secured credit cards are designed for individuals with no credit history or those who have damaged credit. Unlike unsecured credit cards, secured cards require a refundable security deposit, which typically serves as the cardholder’s credit limit. This deposit reduces the risk for the card issuer, making it easier to obtain approval compared to unsecured cards.
Key Features of the Discover it® Secured Credit Card
1. Refundable Security Deposit
The Discover it® Secured Credit Card requires a refundable security deposit, which ranges from $200 to $2,500, depending on the applicant’s creditworthiness and the amount they are willing to deposit. The deposit you make will determine your credit limit, so if you deposit $500, your credit limit will be $500. This deposit is refundable, meaning if you close your account or transition to an unsecured Discover card in good standing, you’ll receive your deposit back.
2. Rewards Program
One of the most notable aspects of the Discover it® Secured Credit Card is its rewards program, which is virtually unheard of for secured credit cards. Cardholders earn:
- 2% Cashback: On up to $1,000 in combined purchases each quarter at gas stations and restaurants. This allows you to earn substantial rewards on everyday spending categories.
- 1% Cashback: On all other purchases, with no cap on how much you can earn.
Additionally, Discover offers a Cashback Match program, where they automatically match all the cashback you’ve earned at the end of your first year as a cardholder. For example, if you earn $100 in cashback, Discover will match that with an additional $100, effectively doubling your rewards for the first year.
3. Credit Bureau Reporting
To help you build or rebuild your credit, Discover reports your payment history and card usage to all three major credit bureaus—Equifax, Experian, and TransUnion. This is crucial for establishing a positive credit history, as consistent, on-time payments can help improve your credit score over time.
4. No Annual Fee
The Discover it® Secured Credit Card comes with no annual fee, making it an affordable option for those looking to build credit without incurring extra costs. This is a significant advantage, as many secured cards charge an annual fee that can eat into your budget.
5. No Foreign Transaction Fees
Another benefit of the Discover it® Secured Credit Card is that it doesn’t charge foreign transaction fees, which can be a great perk for those who travel internationally. This means you can use your card abroad without worrying about additional charges, which typically range from 2% to 3% with other cards.
6. Free FICO® Credit Score
Discover offers free access to your FICO® Credit Score through your online account or mobile app. This feature allows you to monitor your credit score regularly, helping you track your progress as you build or rebuild your credit.
7. Fraud Protection
Discover takes security seriously, offering $0 fraud liability on unauthorized purchases. This means you won’t be held responsible for any fraudulent charges made to your card. Additionally, Discover offers alerts for unusual activity and the ability to freeze your account instantly if your card is lost or stolen.
8. Transition to an Unsecured Card
After seven months of responsible use, Discover will automatically begin reviewing your account to determine if you qualify for an upgrade to an unsecured card. If you meet their criteria, they may offer you an unsecured card without requiring an additional deposit, allowing you to continue building credit with a potentially higher credit limit.
Applying for the Discover it® Secured Credit Card
Applying for the Discover it® Secured Credit Card is a straightforward process, and it’s designed to be accessible to individuals who may have difficulty getting approved for traditional credit cards. Here’s a step-by-step guide on how to apply:
1. Check Your Credit Score
Before applying, it’s a good idea to check your credit score. While the Discover it® Secured Credit Card is designed for those with limited or damaged credit, knowing your score can help you understand your credit standing and set realistic expectations.
2. Gather Necessary Information
To complete the application, you’ll need to provide the following information:
- Personal information: Full name, date of birth, Social Security number, and address.
- Employment status: Details about your employment or source of income.
- Financial information: Annual income, which helps Discover assess your ability to make payments.
- Deposit amount: Decide how much you want to deposit as your security, which will also be your credit limit.
3. Visit the Discover Website
Go to the Discover website and navigate to the Discover it® Secured Credit Card application page. You can also find the card by searching for it on the Discover homepage.
4. Complete the Application Form
Fill out the application form with your personal, financial, and deposit information. Be sure to double-check all entries for accuracy to avoid any delays in processing your application.
5. Review the Terms and Conditions
Before submitting your application, take the time to read and understand the terms and conditions, including the APR, fees, and other important details. The APR for the Discover it® Secured Credit Card is typically higher than that of unsecured cards, so it’s crucial to be aware of this if you plan to carry a balance.
6. Submit Your Application
Once you’ve reviewed everything, submit your application. In many cases, you may receive an instant decision. If your application requires further review, Discover will notify you of their decision within a few days.
7. Make Your Security Deposit
If your application is approved, you’ll need to make your security deposit. This can usually be done online or over the phone. Once your deposit is received, Discover will send your card, which typically arrives within 7-10 business days.
8. Activate Your Card
Upon receiving your Discover it® Secured Credit Card, you’ll need to activate it. This can be done online, through the Discover mobile app, or by calling the number provided on the card. Once activated, you can start using your card to make purchases and earn rewards.
Using Your Discover it® Secured Credit Card Wisely
Building credit with the Discover it® Secured Credit Card requires responsible usage. Here are some tips to maximize the benefits of your card:
1. Pay Your Balance in Full Each Month
To avoid interest charges, aim to pay your balance in full each month. This will help you build credit without accumulating debt. Since the APR on secured cards can be high, carrying a balance can quickly lead to expensive interest charges.
2. Make Payments on Time
Your payment history is one of the most important factors in your credit score. Ensure you make all payments on or before the due date. Late payments can negatively impact your credit score and result in late fees.
3. Keep Your Credit Utilization Low
Credit utilization, or the percentage of your credit limit that you’re using, is another key factor in your credit score. Aim to keep your utilization below 30% of your credit limit. For example, if your credit limit is $500, try to keep your balance below $150.
4. Monitor Your Credit Score
Take advantage of the free FICO® Credit Score that Discover offers to monitor your progress. Keeping track of your credit score can help you understand how your actions impact your credit and make adjustments as needed.
5. Consider a Transition to an Unsecured Card
After several months of responsible use, check if you’re eligible to transition to an unsecured Discover card. This can help you continue building credit with a higher credit limit and potentially better terms.
Conclusion
The Discover it® Secured Credit Card is an excellent option for individuals looking to build or rebuild their credit while earning rewards. With no annual fee, a generous cashback program, and the opportunity to transition to an unsecured card, it stands out as a top choice among secured credit cards. The application process is straightforward, and Discover’s commitment to reporting to all three major credit bureaus ensures that responsible use of this card can significantly improve your credit score over time. If you’re in the market for a secured credit card, the Discover it® Secured Credit Card is certainly worth considering.
