Bad credit can affect you in many ways — from limiting your lending options to preventing you from renting an apartment or even getting a job, in some cases. Similarly, having no credit history can cause problems because lenders don’t have enough information to know whether or not you’ll pay back your loan.

A secured credit card can help you build or rebuild your credit score; the money is secured with a refundable deposit, and your credit limit equals your upfront deposit.

In terms of the best secured credit cards on the market, the Discover it® Secured Credit Card definitely stands out. With no annual fee and an ongoing cash back rewards structure, it offers more than most other secured cards in the way of features. Here’s a closer look at the Discover it Secured to help you decide if it’s worth adding to your wallet.

As a reminder: Details of the Discover it Secured

Rewards rate: 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1 percent; 1 percent back on all other purchases

  • Welcome bonus: Discover will match all the cash back you’ve earned at the end of your first year
  • Annual fee: $0
  • Intro APR: 10.99 percent APR for six months on balance transfers
  • Regular APR: 27.24 percent variable

When is the Discover it Secured worth it?

Before taking out a credit card, you want to ensure it’s the right fit for your situation. Here are a few scenarios where the Discover it Secured is worth it.

You want to improve your credit score

No credit score is required when you apply for the Discover it Secured. That makes this card a good option for borrowers with minimal credit history or anyone looking to improve their credit score. Further, Discover will report your on-time payment history to the three major credit bureaus (however, that means payment delinquencies can also hurt your credit score).

You don’t want to pay an annual fee

The Discover it Secured Credit Card doesn’t come with an annual fee, but you will have to pay an upfront deposit between $200 and $2,500 in order to “secure” the card. If you make your first six payments on time, Discover will refund your deposit at the start of the seventh month.

You’re looking for cash back rewards

Unlike most secured credit cards, the Discover it Secured comes with an ongoing cash back rewards structure. You’ll earn 2 percent cash back on the first $1,000 spent at gas stations and restaurants each quarter (then 1 percent back), as well as 1 percent back on all other purchases.

Even better, Discover offers a special Cashback Match program to its cardholders. At the end of your first year of card ownership, Discover will match all your cash back earnings. That means if you earn $100 in cash back for the year, the issuer will award you an additional $100.

You want to eventually convert it to an unsecured card

Once you’ve been a cardholder for seven months, the lender will review your account to see if you’re ready to move to an unsecured credit card. And once you transition to a regular card, you’ll keep your same account, so your credit score won’t be affected.

When is the Discover it Secured not worth it?

The Discover it Secured Credit Card is a good choice for many borrowers, but it won’t be right for everyone. Here are a few situations where the card may not be worth it.

You already have good credit

If you already have a good credit score, the Discover it Secured Credit Card likely isn’t worth applying for. The card comes with a higher-than-average APR (27.24 percent variable), and you can get a higher credit limit and better rewards by choosing another option.

You regularly pay your bills late

If you can’t manage to make your monthly payments on time, a secured credit card is not going to help you. Since Discover will report your payments to the credit bureaus, making late payments could further drag down your score. Plus, you must make at least six consecutive on-time payments before you get your deposit back or switch to an unsecured card.

You can’t afford the minimum deposit

When you open the Discover it Secured, your credit limit equals your initial deposit. The minimum amount you can deposit is $200, which could be a financial burden for some people.

If you can’t afford the upfront deposit, you can look into another card that lets you make smaller monthly installments. For example, the Capital One Platinum Secured Credit Card offers a $200 initial line of credit for a $49 deposit (though this card doesn’t offer the opportunity to earn a welcome bonus or ongoing rewards).

You don’t have a bank account

The Discover it Secured has to be funded by a bank account, so it isn’t an option for borrowers without a bank account. In that scenario, you may be better off looking into cards that allow alternative payment methods, though they may come with higher fees. If this is a challenge you’re facing, consider reading through our guide to getting a secured credit card with no bank account.

Should you get the Discover it Secured?

If you’re looking for an opportunity to build or rebuild your credit score, the Discover it Secured can help you do just that — and while earning cash back rewards, to boot. Just make sure you can afford the upfront deposit and commit to making your monthly payments on time.

The bottom line

Before choosing a secured credit card, be sure to fully consider the fees, security deposit, upgrade options and any other perks that come with that card.

Also prior to applying, be sure to read through our Discover it Secured Credit Card review to scan through the nitty gritty card details and benefits. If you end up on the fence, there’s always our list of the best secured credit cards to scroll through, updated monthly.