Discover it® Secured Card - No Annual Fee

Discover it® Secured Card - No Annual Fee Review: Editor’s Take

• No major fees. Discover it Secured is one of only five general-use (i.e. non-credit union) secured credit cards with no annual-, monthly- or one-time fees, according to WalletHub’s database. And since fees are one of the two most important considerations for people with bad credit (along with approvability), it certainly should be one of your finalists for anyone focused on credit-improvement.

• One of the few secured cards with rewards. Only 10 other secured credit cards offer rewards. All but two are more expensive than the Discover it Secured Credit Card, and none give you as much value. The 2% cash back that you’ll earn on the first $1,000 spent at restaurants and gas stations (combined) each quarter is nearly double the average earning rate for cash rewards cards market-wide. And all other purchases yield 1%, or roughly the market average, which is more than respectable for a secured card.

• Great first-year bonus. The thing that really puts the Discover it Secured Card over the top is its promotional offer to match (i.e. double) the cash back rewards that you earn the first year your account is open. It’s a fantastic opportunity to save, to say nothing of the fact that initial bonuses are basically unheard of among secured cards. For example, let’s say you spend $300 per month, half of which goes to gas and dining at restaurants. You would earn $54 cash back the first year from Discover it Secured’s base rewards and then receive another $54 through Discover’s first-year match promotion.

• $200 minimum deposit. Secured cards can afford to offer relatively attractive terms because they require you to place a refundable security deposit, the amount of which generally serves as your spending limit. The Discover it Secured Card’s $200 minimum requirement is tied for the lowest available among fully secured cards. Furthermore, it’s worth noting that you are required to place your deposit when you submit an application for the Discover it Secured Credit Card. You’ll get it back right away if you don’t get approved, though.

• High regular APR. The Discover it Secured Card charges interest at a rate well above the market average for a secured card, according to WalletHub’s latest Credit Card Landscape Report. That’s why it’s a bad idea to carry a balance from month to month with this particular secured card. It’s unwise to do so with secured cards generally because you can only spend money that you’ve prepaid. That means you’d be paying interest on a loan to yourself.

• Reasonable approval requirements. There’s always a chance that you’ll get turned down for a credit card, even one that’s secured. But the Discover it Secured Card is designed for people who are new to credit or looking to rebuild their credit, which Discover classifies as those with credit scores below 670. In other words, you should be able to get approved even if you have “bad” credit. You just need to show that your income can support monthly payments given your existing debt obligations, that you haven’t recently declared bankruptcy, and that you have both a valid Social Security number and a U.S. bank account. You can check your latest credit score for free on WalletHub to gauge your odds of approval.

• Very good reviews. It’s wise to see what current and former cardholders think about an offer prior to applying for it. With that in mind, you can read Discover it Secured Credit Card reviews from the WalletHub community, below. Their overall opinion isn’t quite as high as ours, but it certainly isn’t bad.

John Kiernan, Credit Card Editor
Jul 5, 2017