Discover it® Secured Credit Card: A Comprehensive Guide for Building Credit with Rewards
The Discover it® Secured Credit Card stands out in the world of secured credit cards, offering not only a pathway to building or rebuilding credit but also a robust rewards program typically reserved for unsecured cards. This card is designed to help those with limited or poor credit establish a positive credit history while earning cash back on everyday purchases. In this comprehensive guide, we’ll delve into the key features, benefits, potential drawbacks, and overall value of the Discover it® Secured Credit Card, providing you with the insights needed to determine if this card aligns with your financial goals.
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What is the Discover it® Secured Credit Card?
The Discover it® Secured Credit Card is a secured credit card, meaning it requires a refundable security deposit that typically serves as your credit limit. However, what sets this card apart from other secured options is the generous rewards program that allows cardholders to earn cash back on their purchases—a feature usually found only in unsecured credit cards.
Designed specifically for individuals who are either new to credit or looking to rebuild their credit history, the Discover it® Secured Credit Card offers a combination of rewards, no annual fee, and opportunities for credit line increases and upgrades to an unsecured card. The card reports to all three major credit bureaus—Experian, TransUnion, and Equifax—making it an effective tool for establishing or improving your credit score.
HOW TO APPLY
Key Features of the Discover it® Secured Credit Card
The Discover it® Secured Credit Card is packed with features that make it an attractive option for those focused on building credit while enjoying the perks of cash back rewards. These features include:
- Cash Back Rewards Program: One of the standout features of the Discover it® Secured Credit Card is its rewards program. Cardholders earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% cash back on all other purchases. This rewards structure is rare among secured cards and makes the Discover it® Secured Credit Card a unique choice for those looking to build credit while earning rewards.
- Cashback Match: As an added bonus, Discover offers a Cashback Match at the end of your first year. This means they will match all the cash back you’ve earned during your first year as a cardholder, effectively doubling your rewards. There’s no limit to how much Discover will match, making this an excellent incentive for maximizing your spending in the first year.
- No Annual Fee: The Discover it® Secured Credit Card charges no annual fee, allowing you to focus on building credit and earning rewards without worrying about additional costs.
- Refundable Security Deposit: To open a Discover it® Secured Credit Card, you’ll need to provide a security deposit, which serves as your credit limit. The minimum deposit is $200, and the maximum is $2,500. This deposit is fully refundable when you close your account in good standing or when you’re upgraded to an unsecured Discover card.
- Automatic Reporting to Credit Bureaus: Discover reports your payment history and credit usage to all three major credit bureaus. Consistent reporting is crucial for building a positive credit history and improving your credit score over time.
- Opportunity to Upgrade to an Unsecured Card: After eight months of responsible card use, Discover will automatically review your account to determine if you’re eligible to upgrade to an unsecured card. If you qualify, you’ll get your security deposit back, and you can continue to use your Discover card with the same rewards and benefits.
- Free FICO® Score: Discover provides free access to your FICO® Credit Score, updated monthly. This feature allows you to monitor your credit progress and stay informed about your credit health.