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.