Key takeaways

  • Both the Discover it® Secured Credit Card and the Petal® 1 "No Annual Fee" Visa® Credit Card are solid cards for building credit.
  • With the Discover it Secured card, you can earn cash back on every purchase.
  • On the other hand, the Petal 1 card does not require a credit history or a security deposit to open.
  • Depending on what you need, either card could be a good fit for you.

Using credit cards isn’t the only way to build your credit from scratch or bounce back from a credit misstep, but it can often be the easiest option. There are several credit cards that are specifically designed to help consumers who find themselves in these situations, and they don’t have to cost an arm and a leg. To be clear, some subprime credit cards do include a number of fees, but the two cards we’re going to talk about here — the Petal® 1 “No Annual Fee” Visa® Credit Card* and the Discover it® Secured Credit Card — don’t even carry annual fees.

That said, be aware that both the Petal 1 and Discover it Secured have lofty variable APR rates — 25.24 percent to 34.74 percent for the Petal 1 and 28.24 percent for the Discover it Secured — so these cards are less than ideal for cardholders who tend to carry their balances.

Main details

Cards Petal 1 “No Annual Fee” Visa Credit Card Discover it Secured Credit Card
Welcome bonus N/A Discover will match all cash back earned in your first year as a cardholder
Rewards rate
  • N/A — but 2% to 10% cash back via select merchant offers
  • 2% cash back at gas stations and restaurants (on up to $1,000 in combined purchases per quarter, then 1%)
  • 1% cash back on other purchases
Intro APR N/A 10.99% intro APR on balance transfers for 6 months (28.24% variable APR after); Balance transfers subject to 3% intro balance transfer fee and 5% balance transfer fee on future transfers
Annual fee $0 $0

Petal 1 vs. Discover it Secured

Badge Welcome bonus winner

Discover it Secured

  • Neither card offers a traditional welcome bonus (where you’ll earn bonus points or cash back after meeting a card’s spending requirement within a specific timeframe), but Discover will match all of the cash back you earn during the first year. For example, if you earn $150 in cash back during the first year of card membership, you will receive another $150 from Discover at the end of the year, for a total of $300 in cash back.

Badge Rewards rate winner

Discover it Secured

  • While the Petal 1 doesn’t offer a traditional cash back program, the Discover it Secured does. Cardholders will get 2 percent cash back at gas stations and restaurants (on up to $1,000 in combined purchases per quarter, then 1 percent) and 1 percent cash back on all other purchases.

    However, note that the Petal 1 has a limited cash back program called Merchant Offers. Through this program, cardholders can earn 2 percent to 10 percent cash back at select merchants, but this is a much weaker offer than earning cash back on all purchases.

Badge Annual fee winner

Tie

  • Neither card carries an annual fee.

Badge Foreign transaction fee winner

Tie

  • Neither card charges a foreign transaction fee. That said, keep in mind that Discover cards tend to have more limited acceptance abroad than Visa cards, so Petal 1 may be more useful to cardmembers traveling abroad or shopping online in foreign currency.

Which card earns the most?

Since the Discover it Secured includes a traditional cash back rewards program, while the Petal 1 only includes a limited Merchant Offers program, the Discover it Secured would earn more rewards for the average consumer.

Petal 1 vs. Discover it Secured spending example

If you maximize the Discover it Secured card’s 2 percent cash back at gas stations and restaurants (on up to $1,000 in combined purchases per quarter, then 1 percent back), you’ll get at least $80 in cash back per year, plus 1 percent cash back on all other purchases. And that’s before the Discover match at the end of the first year.

So, say you spend $12,000 per year total, broken down into $4,000 spent at restaurants and gas stations ($1,000 quarterly) for $80 cash back, plus $8,000 on other purchases, netting you another $80 in cash back. You’ll earn $160 in cash back for the year, and, thanks to Cashback Match, your total cash back haul for your first year will be $320.

The Petal 1, with its limited cash back program at select merchants, would not be able to beat the cash back you can earn from the Discover it Secured (in most cases). Although you may be able to snag a solid cash back offer, these offers are for specific merchants and are inconsistent.

Why should you get the Petal 1?

Unlike the Discover it Secured, the Petal 1 is a traditional unsecured credit card. If you don’t want to put down a minimum security deposit, and if you don’t care much about the Discover it Secured card’s cash back program, you may find the Petal 1 more appealing. Also, the Petal 1 doesn’t require you to have an established credit history, although it may look into your banking history (besides your credit score) to establish your creditworthiness. With that said, select cards in the Petal family have had their already limited benefits downgraded — so keep that in mind prior to choosing the right card for you.

Additional benefits

  • Petal’s Leap program: Petal 1 cardmembers can have their credit limit increased after six months of consecutive payments as long as they stay within a specific credit score range.
  • Merchant Offers: You can earn 2 percent to 10 percent cash back at select merchants.
  • Free credit score access: You can track your credit score in the Petal app.

Redemption options

For cash back earned with Merchant Offers, you can redeem cash back as a statement credit in any amount. If you have a balance of at least $20, a check or an ACH transfer to your bank account is available by request.

Recommended credit score

No credit history is required to apply for the Petal 1.

Why should you get the Discover it Secured?

For all the advantages of the Discover it Secured credit card, its main disadvantage is in the name — it’s a secured credit card. That means you’ll need to put down a security deposit (from a minimum of $200 to a maximum of $2,500) to open an account, which will be equal to your credit limit.

In terms of building or rebuilding credit, secured cards work the same way as unsecured cards. But if you like earning steady cash back and don’t mind a security deposit, you may prefer the Discover it Secured to the Petal 1 — since the former offers a traditional cash back program and Discover Cashback Match.

Additional benefits

  • Chance to qualify for an unsecured card after seven months: After seven months, Discover will review your payment record and credit standing to decide if you qualify for an unsecured card. If you do, your security deposit will be returned.
  • FICO credit score access: You can view your FICO credit score through your account and you’ll be able to see up to a year of recent FICO scores online.
  • Late payment forgiveness: Discover will waive the late fee on your first late payment (then up to $41).
  • Discover Identity Alerts: Discover will monitor your Experian credit report daily and alert you when a new inquiry or account appears on your report. In addition, it will monitor thousands of Dark Web sites known for exposing personal information and alert you if it finds your information on one of those websites.
  • Online privacy protection: Approximately once every 90 days, Discover will scan 10 select people-search sites for your personal information and submit opt-out requests on your behalf. Only available in the mobile app.

Redemption options

You’ll have several ways to redeem cash back:

  • Apply toward your Discover bill as a statement credit
  • Deposit to your banking account
  • Pay with your rewards at checkout at Amazon.com and PayPal.com
  • Buy gift cards (starting at $5; look for discounted gift cards)
  • Make a charitable donation

Note that, unlike some other credit cards, your Discover cash back never expires.

Recommended credit score

No credit history is required to apply for the Discover it Secured.

The bottom line

Both the Petal 1 “No Annual Fee” Visa Credit Card and Discover it Secured Credit Card are solid, low-cost cards for consumers looking to build or rebuild their credit. Since both cards have no annual fees, the card you should choose comes down to what you value most. If you’re looking for cash back, choose the Discover it Secured. On the other hand, if you’re interested in an unsecured card, pick the Petal 1. Remember, though, that your path from a secured card to an unsecured card with Discover can be as short as seven months, provided you use your credit responsibly.

However, keep in mind that, while the Petal 1 and the Discover it Secured are among the best credit cards for bad credit, they aren’t the only ones. Before you make a decision, you should check out other options to make sure you find the best fit for you.

*All information about the Petal 1 “No Annual Fee” Visa Credit Card has been collected independently by Bankrate and has not been reviewed or approved by the issuer.