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Discover it® Secured Credit Card review: Earn cash back and build your credit

 /  13 min
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Snapshot

4.5

Bankrate rating
Info
Rating: 4.5 stars out of 5

Bottom line

This standout secured card is one of the most valuable options available thanks to its competitive cash back, issuer-exclusive welcome offer and the opportunity to upgrade to an unsecured card after just seven months.

Best secured card FOR GAS AND DINING
  • Cost of membership
    Rating: 5 stars out of 5
    5 / 5
    Ease of building credit
    Rating: 3.5 stars out of 5
    3.5 / 5
    APR
    Rating: 4 stars out of 5
    4 / 5
    Features
    Rating: 5 stars out of 5
    5 / 5
No Credit History
Info
Recommended Credit

Cashback Match™

Intro offer

Info

1% - 2%

Rewards Rate

Info

$0

Annual fee

28.24% Variable APR

Regular APR

Discover it® Secured Credit Card Overview

The Discover it® Secured Credit Card stands at the top of the pack when it comes to building credit and earning cash back with bad credit or no credit history. Few secured credit cards offer rewards rates on par with traditional credit cards, and Discover’s secured card does so with fewer fees than the competition. You won’t have to worry about an annual fee, foreign transaction fees, a penalty APR or a fee on your first late payment (up to $41 after that).

Although rival secured cards with more robust rewards rates have emerged over the past few years, the Discover it® Secured Credit Card is still perhaps the most valuable option thanks to its first-year bonus. Secured cards typically don’t provide welcome offers, but Discover will match all cash back you earn in your first 12 months with the Discover it® Secured Credit Card.

Read on to learn more about where the Discover it® Secured Credit Card shines, where it may fall short and whether it makes sense as part of your credit-building journey.

  • Credit Card Cash Back

    Rewards

    • 2 percent cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter, then 1 percent) plus 1 percent back on all other purchases
    • 1 percent back on all other purchases

    Expert Appraisal: Good
    See our expert analysis

  • Rewards
    Welcome offer
    • Discover will match all the cash back you’ve earned at the end of your first year

    Expert Appraisal: Exceptional
    See our expert analysis

  • Credit Card Search

    Rates and fees

    • No annual fee
    • No foreign transaction fees
    • No penalty APR or a fee on your first late payment (up to $41 after that)
    • $200 minimum security deposit and $2,500 maximum deposit
    • 10.99 percent balance transfer intro APR for six months (with a 3 percent intro balance transfer fee, up to 5 percent fee on future balance transfers (see terms)*
    • 28.24 percent ongoing variable APR 

    Expert Appraisal: Typical
    See our expert analysis

  • Credit Fair

    Credit-building features

    • Free FICO credit scorecard access: Cardholders get free access to their FICO score through the Discover app, among other credit education resources. This can help users track their credit score and see changes as a result of their credit habits.
    • Credit reporting: As long as you use Discover responsibly, it can help you build your credit — as it shares your credit history with the three major credit bureaus (Equifax, Experian and TransUnion). 
    • Automatic account reviews: Discover will review your account after seven months to determine if you’re eligible for an upgrade to an unsecured credit card. If you qualify, Discover may refund your security deposit and potentially give you a higher credit limit.

    Expert Appraisal: Typical
    See our expert analysis

  • Congrats
    Other cardholder perks
    • Discover® Identity Alerts: Discover Bank offers free identity alert services that are available only online, and currently include daily monitoring of your Experian® credit report and alerts when a new inquiry or account is listed, as well as alerts if ever your personal information is detected on the Dark Web.
    • Free overnight card replacement: If you lose or misplace your card, you can conveniently get a replacement shipped to you at no additional cost. However, the free overnight shipping offer does not apply to P.O. boxes or addresses located outside of the U.S. 
    • Online privacy protection: The Discover Bank mobile app offers Online Privacy Protection at no cost. Your online personal information will be scanned approximately every 90 days and opt-out requests will be submitted on your behalf via 10 select people search sites. The types of personal information that can be found on these sites will vary.
    • Freeze it®: When activated from the online portal or app, it blocks new purchases, cash advances or balance transfers. This provides peace of mind if your card goes missing or is stolen.

    Expert Appraisal: Typical
    See our expert analysis

Discover it® Secured Credit Card pros and cons

Pros

  • Checkmark

    This is one of the rare secured cards that offer rewards. Cardholders will earn 2 percent cash back at gas stations and restaurants and 1 percent for all other purchases (up to $1,000 in combined purchases per quarter, then 1 percent).

  • Checkmark

    Not only is it one of the few secured cards with a welcome offer, but Discover’s first-year cash back match could also be one of the most valuable offers among any no-annual-fee card.

  • Checkmark

    This card poses no annual fee, no foreign transaction fees, no penalty APR and no fee on your first late payment (up to $41 thereafter), unlike the typical credit-building card loaded with fees.

  • Checkmark

    You may qualify for an upgrade to an unsecured card after only seven months of full, on-time payments — faster than some rival cards allow.

Cons

  • Several other secured cards offer stronger rewards value if you don’t spend enough to benefit much from Discover’s first-year cash back match.

  • Discover is not as widely accepted as some other networks’ cards, so you may not be able to use the card with some merchants in the U.S. and overseas.

  • Other credit-building cards offer a lower ongoing APR, making them a better choice if you may need to carry a balance.

Why you might want the Discover it® Secured Credit Card

The Discover it® Secured Credit Card is a terrific option if you're looking for a credit card that will help you build credit while still earning rewards. With the Discover it® Secured Credit Card, you can earn rewards on purchases in common categories — plus you can have a higher-than-usual credit limit based on what you put down as a security deposit. 

There are also a low number of fees, so if you're just starting out or need to restore your credit, you more than likely don't have to worry about common charges such as penalty APR or foreign transaction fees becoming a burden. Furthermore, this card comes with a one-of-a-kind welcome bonus, whereas Discover will double the rewards you earn at the end of your first year.

Welcome offer: Gives the unique opportunity to earn double on rewards

The Discover it® Secured Credit Card comes with the same welcome offer as the rest of the issuer's cards: Discover will match all the cash back you earn at the end of your first year. There are no minimum spending requirements or maximums and Discover will match exactly what you earned, dollar for dollar. This means if you spent $1,000 on restaurants each quarter, you’d earn a total of $160 at the end of your first year ($80 via the card’s rewards rate and $80 via the welcome bonus).

Very few cards available with limited credit provide welcome offers, and Discover’s cash back match means you could earn more rewards in a shorter time than you would with competing cards.

Rewards: Decent rate on gas and restaurants

Secured cards aren’t known for strong rewards rates, so it’s impressive that the Discover it® Secured Credit Card offers the same full-fledged Discover cash back rewards you’d get with the Discover it® Chrome — a card that requires good-to-excellent credit.

You’ll earn 2 percent cash back on the first $1,000 you spend at gas stations and restaurants each quarter (1 percent back after that). You’ll also earn 1 percent back on all other purchases.

This isn’t the most competitive rewards rate you’ll find on a secured card, but it’s nothing to sneeze at either. It’s a step up from the typical 1 to 1.5 percent, flat-rate cash back rate some credit-building cards carry. In fact, many secured cards don’t even earn rewards.

You can also redeem your cash back rewards in any denomination at any time, except in the case of gift cards, which require you to redeem in $5 increments for a gift card of up to $200.

Your rewards can be redeemed for:

  • Cash back, in the form of a statement credit or a bank account direct deposit
  • Gift cards
  • Purchases via Amazon
  • Purchases via Paypal
  • Charitable donations

Credit limit: A high $2,500 maximum starting point

The card is an excellent choice for people looking for a secured credit card with a high starting deposit. Your credit limit will be equivalent to the amount you put toward a security deposit, so with a $200 minimum and a $2,500 maximum, you have the ability to kick off with a rather large credit limit, especially when compared to some secured cards, which may only allow you to put down up to $500 to $1,000 as an initial deposit.

Fees: Limited compared to similar cards

The Discover it® Secured Credit Card has remarkably few fees compared to most cards for people with bad or limited credit. You won’t have to deal with an annual fee, foreign transaction fees, a penalty APR or a fee on your first late payment (up to $41 after that). 

Together, these waived fees keep costs down and make learning the ropes a bit more comfortable if you’re new to credit cards.

Why you might want a different secured card

Though the Discover it® Secured Credit Card allows you to earn cash back on purchases, there are only two spending categories that earn elevated rewards, and there is also a spending limit on these categories, so your earning potential is severely restricted if you start out with a decent credit limit. 

Also, the interest rate is a bit steep, so you would have to pay more back on new purchases since the intro APR offer only extends to balance transfers. And besides a few credit-building features, there aren’t many standout perks that would make this card a top contender amongst other cards.

Rewards: Limitations on spending

You may only spend a set amount on gas and restaurant purchases each quarter before you are subject to a spending restriction. Your high cash back rate in these two categories is slashed in half, limiting how much you can earn in the long term. However, if you begin with a low credit limit as a result of making the minimal deposit, this may not have much of an impact on you in this particular situation. If you want to earn infinite points on purchases with no restrictions, this may be insufficient for you.

In quick comparison, the Capital One Quicksilver Secured Cash Rewards Credit Card allows you to earn unlimited cash back on all purchases, but on the flip side, you would be subjected to a higher APR than with the Discover it® Secured Credit Card, so your rewards are still limited, albeit in a different way.

Security deposit: Average compared to similar cards

Though this card’s $200 minimum security deposit and $2,500 maximum deposit offer an accessible entry point and a decent credit limit if you decide to max out your deposit, it’s fairly average and not necessarily a standout feature when it comes to most secured credit cards. There are other similar cards that offer a higher credit limit to applicants, such as the OpenSky® Secured Visa® Credit Card, which allows you to put down a deposit of up to $3,000 — noticeably higher than the Discover it® Secured Credit Card. Still, you would have to sacrifice having to pay an annual fee in order to obtain the potentially higher credit limit with the Open Sky Secured Card. 

Overall, you have options if you rather have a higher credit limit, but you would have to weigh the pros and cons of having no annual fee versus the opposite scenario. 

APR: A bit steep compared to similar cards

Unfortunately, the card’s APR is well above the current average interest rate. You can find other secured cards with slightly higher rates, but there are also a few lower-interest credit cards to consider if you think you may need to carry a balance.

And although the card’s intro APR on balance transfers is much less common among credit-building cards (you’ll get a 10.99 percent intro APR on balance transfers for your first six months, then 28.24 percent variable APR; 3 percent intro balance transfer fee, up to 5 percent after the date listed in your application), you can’t use this offer toward new purchases. That’s quite a disadvantage, especially when you can only earn rewards on purchases and not have time to pay them off without interest. Also, transferring a balance to a secured card may not always be the best strategy. Depending on the size of your balance and your APR, you may be better off using the money you would have used to cover your deposit to pay down debt instead.

Perks: Unnoteworthy besides credit-building features

For a card that’s designed for cardholders with limited or damaged credit, it shouldn’t come as a surprise that its extra perks are limited. It does have the standard secured card features, like $0 fraud liability and credit education resources — both of which are big assets credit builders — but other than that, there isn’t anything remarkable about the Discover it® Secured Credit Card’s benefits.

We tried it: Here’s what our experts say

Despite offering few perks, Christina Ly, a credit card expert at The Points Guy, still thinks the Discover It Secured Credit Card should be considered for your first credit card.

The Discover It® Secured Credit Card can seem a little lackluster when compared to other cards, but that is only because it is designed to be the perfect starter card. Since it is a secured card, prospective cardholders with a poor credit history or no credit history may have a high chance of approval. In addition, the card has no annual fee and offers 2 percent cash back at gas stations and restaurants for up to $1,000 in combined purchases per quarter and unlimited 1 percent cash back on everything else. Not many secured cards allow you to earn rewards with no annual fee! In addition, you can potentially upgrade to one of Discover’s many cards after Discover transitions you to an unsecured credit line. The Discover It® Secured Credit Card was my first card, and I have it to thank for the many reward cards in my wallet today.

— Christina Ly, Writer, The Points Guy

How the Discover it® Secured Credit Card compares to other secured cards

The Discover it® Secured Credit Card stands out among the best secured credit cards. It has far fewer fees than its rivals and its cash back and first-year offer allow you to earn competitive rewards while building credit.

On the other hand, several secured cards may be stronger alternatives depending on how much effort you want to put into earning rewards, your spending habits and how much you can put down as a deposit.

Image of Discover it® Secured Credit Card
Bankrate Score
See Rates & Fees , Terms Apply
Apply now Lock
on Discover's secure site

Annual fee

$0

Intro offer

Cashback Match™
Info

Rewards rate

1% - 2%
Info

Recommended Credit Score

No Credit History
Info
Image of Capital One Platinum Secured Credit Card
Bankrate Score
See Rates & Fees , Terms Apply
Apply now Lock
on Capital One's secure site

Annual fee

$0

Intro offer

N/A

Rewards rate

N/A

Recommended Credit Score

No Credit History
Info
Image of Capital One Quicksilver Secured Cash Rewards Credit Card
Bankrate Score
See Rates & Fees , Terms Apply
Apply now Lock
on Capital One's secure site

Annual fee

$0

Intro offer

N/A

Rewards rate

1.5% - 5%
Info

Recommended Credit Score

No Credit History
Info

Who is the Discover it® Secured Credit Card right for?

Bankrate’s Take: Is the Discover it® Secured Credit Card worth it?

The Discover it® Secured Credit Card offer is ideal if you’re just starting to build credit or trying to rebuild credit. Discover reports your payments to all three major credit bureaus and you could graduate to an unsecured credit line after just seven months of responsible card use. By the time you upgrade, this card’s rewards, low fees and issuer-exclusive welcome offer may have delivered more value than competing cards would in that timeframe.

Other secured cards may offer better rewards rates, more accessible security deposits or higher credit limits, but the Discover it® Secured Credit Card is still one of the best all-around credit-building cards.

Dig deeper: Is the Discover it® Secured Credit Card worth it?

Written by
Sarah Estime
Former Associate Writer, Credit Cards

As a former staff writer for Bankrate and CreditCards.com, Sarah offers sound advice that will improve your financial life and help simplify topics like travel hacking and credit card rewards.

Co-written by
Garrett Yarbrough
Writer, Credit Cards
Edited by Senior Editor, Credit Cards

* See the online application for details about terms and conditions for these offers. Every reasonable effort has been made to maintain accurate information. However all credit card information is presented without warranty. After you click on the offer you desire you will be directed to the credit card issuer's web site where you can review the terms and conditions for your selected offer.

Editorial Disclosure: Opinions expressed here are the author's alone, and have not been reviewed or approved by any advertiser. The information, including card rates and fees, is accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information.