Discover it® Secured Review

The Discover it Secured is designed to help cardholders build or rebuild their credit. It requires a security deposit to activate but features no annual fees and allows you to earn cash-back rewards for everyday spending. Following the trend of Discover’s other credit options, the company offers only a single version of its secured card to make the application process seamless and straightforward. If cardholders consistently pay bills on time, it’s possible to have their deposit refunded and convert to an unsecured credit option.

This card is ideal for clients looking to get their credit back on track; Discover provides reliable service and good coverage across the United States. With a limited international presence, however, and a lack of substantive reward incentives, this card isn’t a good fit for regular travelers or those looking to accumulate points or miles as quickly as possible.

The Essentials of the Discover it Secured

  • APR: 24.49%, which varies according to prime rate
  • Annual fee: $0
  • Primary feature: Secured credit based on the amount of your security deposit
  • Introductory bonus offer: Discover will match all cash back earned at the end of your first year

What’s Interesting About the Discover it Secured

This card is designed to help clients rebuild their credit or ensure that they don’t overspend on their credit cards. As a result, a security deposit is required to open an account — and the total credit line is tied directly to the amount of this deposit. In practice, this means that a $500 security deposit equals a $500 credit line. If you choose to pay more, you can increase your credit, and if you close the account or upgrade to an unsecured card, your deposit is refunded if you pay your balance in full and close your account.

The Discover it Secured is also noteworthy because it has no annual fee, no late fee on your first late payment, and no APR increases if you pay your balance late. After you’ve used the card for 8 months, Discover will automatically review your account every month to determine if you’re eligible for an unsecured card transition. This card also reports credit information to all three major credit bureaus and, unlike most secured cards, offers some rewards: 2% cash back at restaurants and gas stations up to $1000 in combined purchases each quarter, along with unlimited 1% cash back on all other purchases.

Things to Consider

While there’s no annual fee and no APR penalties for the Discover it Secured, opening an account requires a minimum $200 balance. This can be problematic if you’re just getting back on your feet financially or need credit immediately. This secured credit card also features slightly higher-than-average APR, which may make it more difficult for cardholders to fully pay their balance each month.

It’s also worth noting that although Discover cards are now widely accepted across the United States, they’re not as broadly accepted elsewhere. If you’re planning extensive travel or an international move in the near future, the Discover it Secured may limit where and when you can use credit to purchase goods and services.

How to Get the Most from this Card

This card is designed to help you build or rebuild your credit by limiting your spending and tying it directly to a secure deposit. Getting the most from the Discover it Secured means taking a slow and steady approach; only spend as much as you can reliably pay on time each month, and use Discover’s free FICO credit score reporting to track your credit progress.

Since this isn’t a prepaid or debit card, it’s possible to build credit with responsible use and on-time payments. Combined with consistent payment and balance management habits, the Discover it Secured can help you transition back to unsecured cards without spending beyond your means. In addition, this card can help to improve you cash flow with bonus cash-back offers on common purchases such as those from gas stations and restaurants, along with 1% cash for all other purchases.

Other Card Options that Might Interest You

If the Discover it Secured doesn’t seem like the best fit for your finances, take a look at other options, including:

The Capital One® Secured Mastercard®

Also designed to help build your credit, this card offers more flexibility for new cardholders. Clients can make $49, $99 or $200 security deposits for a $200 credit line, or put down more initially to increase their available credit. After making your first 5 monthly payments on time, you can access increased credit lines; Capital One also makes this process easier by letting you pick your own monthly due date and payment method.

The Discover it® chrome 

If earning cash back at gas stations and restaurants appeals to you and you’ve got the creditworthiness to support an unsecured card, consider the Discover it chrome card. Just like Discover’s Secured option, you’ll earn 2% cash back at gas stations and restaurants, for up to $1,000 in combined spending each quarter, along with unlimited 1% cash back everywhere else and automatic cash-back matching at the end of your first year. You’ll also enjoy no annual fee — and more importantly, a significantly lower APR between 13.49% – 24.49%, which varies with the prime rate.

The Final Word

Discover it Secured makes it easy to start getting your credit score back on track by allowing clients to get started with as little as $200 and ensure that all credit transactions are reported to the big three credit agencies. Combined with no annual fee and cash-back options, this secured credit card offers more perks and flexibility than many comparable secured cards, and allows you unsecured card upgrading once you’ve demonstrated the ability to pay on time and in full.

If you’re looking for a card that can help rebuild your credit — and offer some cash-back rewards in the process — the Discover it Secured is a great choice. If you need even more flexibility in security deposits or have the creditworthiness for lower-interest unsecured cards, this may not be your best option.

Doug Bonderud

Personal Finance Contributor

Doug Bonderud is an award-winning freelance writer with the unique ability to translate complex financial concepts into approachable, actionable content that both captures reader interest and delivers key brand messaging.