The Discover it® Secured Credit Card is an excellent option for individuals looking to build or rebuild their credit. Unlike traditional credit cards, secured credit cards require a cash deposit that serves as collateral, making them a safe choice for lenders. This guide will delve into the key features of the Discover it® Secured Credit Card, its benefits, and how to apply for one.
Key Features
1. Security Deposit
The most notable aspect of the Discover it® Secured Credit Card is its security deposit requirement. When you apply, you’ll need to make a cash deposit, which will determine your credit limit. Typically, the minimum deposit is $200, and the maximum can go up to $2,500. This deposit ensures that if you fail to make payments, the issuer has collateral to cover the debt.
2. Rewards Program
One of the standout features of the Discover it® Secured Credit Card is its rewards program. Cardholders earn 2% cash back on up to $1,000 spent in combined purchases at gas stations and restaurants each quarter. Additionally, you’ll earn 1% cash back on all other purchases. Discover also matches all the cash back earned in your first year, effectively doubling your rewards for new cardholders.
3. No Annual Fee
Many secured credit cards come with high annual fees, but the Discover it® Secured Credit Card does not charge an annual fee. This feature makes it a cost-effective option for individuals looking to establish their credit without breaking the bank.
4. Credit Reporting
Discover reports your payment history to all three major credit bureaus—Experian, TransUnion, and Equifax. This consistent reporting helps you build a positive credit history, which is crucial for improving your credit score over time.
5. Free FICO® Score
Cardholders receive free access to their FICO® Credit Score on their monthly statements and through the Discover app. This feature allows you to monitor your credit health and track your progress as you build your credit history.
6. Automatic Reviews for Upgrades
After eight months of responsible card use, Discover will automatically review your account to determine if you qualify for an unsecured credit card. If approved, your security deposit will be refunded, allowing you to transition to a standard credit card without losing your credit line.
7. Fraud Protection
Discover provides a suite of fraud protection features. You won’t be held liable for unauthorized purchases if you report them promptly. Additionally, the card offers alerts for suspicious transactions, making it easier to spot and report fraud quickly.
Benefits of the Discover it® Secured Credit Card
1. Building Credit
The primary benefit of using the Discover it® Secured Credit Card is the opportunity to build or rebuild your credit score. By making timely payments and keeping your credit utilization low, you can significantly improve your creditworthiness.
2. Rewards on Everyday Spending
Unlike many secured cards that offer minimal rewards, the Discover it® Secured Credit Card allows you to earn cash back on everyday purchases. This feature makes it easier to offset the cost of your deposit and spending.
3. No Hidden Fees
The absence of an annual fee and no foreign transaction fees means that you won’t be surprised by unexpected charges. This transparency is particularly beneficial for individuals who are new to credit.
4. Educational Resources
Discover provides various educational resources, including articles and tools to help you understand credit scores, budgeting, and responsible credit use. This support is invaluable for anyone looking to improve their financial literacy.
How to Apply for the Discover it® Secured Credit Card
Applying for the Discover it® Secured Credit Card is a straightforward process. Here’s a step-by-step guide to help you get started:
Step 1: Check Your Credit Score
Before applying, it’s wise to check your credit score. While the Discover it® Secured Credit Card is designed for those with limited or damaged credit, knowing your score can help you understand where you stand and how to improve.
Step 2: Gather Necessary Information
You’ll need to provide some personal information during the application process, including:
- Name
- Address
- Social Security number
- Income information
- Employment details
Step 3: Choose Your Security Deposit
Decide how much you want to deposit. The minimum is typically $200, but you can choose to deposit more, increasing your credit limit accordingly.
Step 4: Complete the Online Application
Visit the Discover website to fill out the online application. Ensure that all your information is accurate to avoid delays.
Step 5: Review and Submit
After completing the application, review all your information to confirm its accuracy, then submit your application.
Step 6: Await Approval
Once submitted, you will receive a decision, often within minutes. If approved, you’ll receive your card in the mail within a few days.
Step 7: Make Your Security Deposit
If approved, you’ll need to make your security deposit, which will then be used as your credit limit.
Conclusion
The Discover it® Secured Credit Card is an excellent choice for those looking to build or rebuild their credit while earning rewards. With its lack of an annual fee, robust rewards program, and automatic upgrades to unsecured credit, it stands out in the crowded market of secured credit cards. By following the straightforward application process, you can take a significant step toward achieving your financial goals and improving your creditworthiness. Whether you’re just starting or looking to recover from credit setbacks, the Discover it® Secured Credit Card can help pave the way to a brighter financial future.
