Discover IT Secured Card

The Good

• No annual fee
• Reports to all 3 credit bureaus
• Can automatically transfer to unsecured card after 8 months
• Offers 1-2% rewards on all purchases; first-year bonus
• Free FICO score check; social security monitoring

Our review of the Discover IT card found it to be a solid choice for a secured credit card mainly because it works well in accomplishing its goal – reporting your payments to the credit agencies so that your FICO score increases. It reports as a secured credit card payment to all 3 bureaus.   There is no annual fee, and after 8 months, you have the option to transition your card to an unsecured card.  This means that you get your $200 deposit back, and move to a higher line of credit with no deposit.  This is, of course, the path as your credit improves (but make sure to continue paying your entire bill and not carrying ANY balance).   The Discover IT card offers 2% cash back at gas stations and restaurants.  All other purchases are 1% cash back. In addition, after the first year of using the card, Discover will match whatever cash you’ve earned which essentially doubles your rewards percentage.  You should not purchase anything on a secured card that you don’t need and/or don’t have cash for – but if you’re buying it anyway and it’s within your budget, this is a nice feature.   As a Discover card holder, you’ll also receive a few perks that Discover offers their customers.  You’ll receive your FICO score each month for free.  It is posted on your monthly statement.  So if you are currently paying a credit monitoring service, you’ll save here.  And even if you’re not, it is good to monitor your FICO score as you pay off your secured credit card.  Another perk Discover offers is free social security monitoring.  This service lets you know if your social security number appears on a risky website which helps avoid identity theft.  

The Bad

• 24% APR rate is a little high as compared to other secured cards
• Discover not accepted in all foreign countries

The biggest downside of the Discover IT card is that the 23.24% APR rate is higher than competing cards.  However, if you pay off your entire balance each month, this is irrelevant.  And you absolutely should pay off your entire balance when using a secured card.  Only purchase what you have the cash.  And though you have made a deposit to secure the card, you will still pay a late fee and accrue interest on any missed payments.   While Discover is a highly very highly rated credit card brand, it is accepted in less places than Visa and Mastercard.  This primarily impacts those who might travel abroad to foreign countries where Discover is not accepted.   Finally, a word on one of the Good features above: can automatically transfer to unsecured card after 8 months.  This is good. Unless you know that you cannot handle an unsecured card because you’ll spend more than you have.  As your credit improves with any secured card, you’ll eventually be offered an unsecured card, and you’ll likely receive offers in the mail.  So you’ll need to be abel to resist the temptation eventually.  But if you cannot now, you might want to rethink this card as they make it very easy to transition to an unsecured line of credit.  

The Summary

It’s a secured credit card – the goal is to build your credit.  So are rewards really that important?  Not really.  But since this card has no annual fee, there’s no harm in earning some rewards.  Likewise, this card offers a 10.99% balance transfer fee which is lower than its normal fee.  But if you are opening a secured card, you should NOT be transferring a balance. A balance transfer card with a 0% introductory period would be a much better option for you. We rank the Discover IT card well primarily because if you use it for 8 months and pay it regularly, you will likely see an increase in your credit score and Discover makes it easy & free to monitor.  Plus, Discover generally receives great customer feedback for the free services they offer and other features like waiving fees on your first late payment.  If you have any experience with the Discover IT Secured Card, please leave a comment for us below.