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Discover it Secured Credit Card: Building Credit with Cashback Rewards

Building a good credit score is essential to securing loans, credit cards, or mortgage rates. One way to establish or rebuild a credit score is through secured credit cards, like the Discover it Secured Credit Card.

In this article, we’ll cover the benefits of secured credit cards for building credit, the unique features of the Discover it Secured Credit Card, and who should get the card.

Benefits of Secured Credit Cards for Building Credit

Secured credit cards are available to those with limited credit histories or poor credit scores. They are also helpful for those who are new to credit, such as college graduates or immigrants.

To understand how secured credit cards work, let’s define them. A secured credit card is a type of credit card that requires a security deposit.

The amount of the deposit acts as collateral for the lender. If the borrower defaults on their payments, the lender can retain the deposit to cover any losses.

The deposit also sets the credit limit on the card. Secured credit cards provide an opportunity for those with limited credit histories or poor credit scores to build or rebuild their credit score.

Using a secured credit card responsibly and making timely payments can help increase your credit score over time. By doing so, you’ll be able to qualify for better loan rates or other credit options in the future.

Discover it Secured Credit Card Features

The Discover it Secured Credit Card offers a range of unique features and benefits to cardholders. Here are some of the top features:

Cashback Rewards: Most secured credit cards don’t offer cashback rewards, but the Discover it Secured Credit Card does.

Cardholders can earn 2% cashback at gas stations and restaurants on up to $1,000 in combined purchases each quarter. They also receive 1% cashback on all other purchases.

No Annual Fee: Cardholders don’t have to worry about annual fees, as there are none for the Discover it Secured Credit Card. Free FICO Score: Cardholders have access to their FICO score for free on their monthly statements, making it easy to track their credit score progress.

Flexible Payment Options: Cardholders can choose their payment due date and also have the ability to pay online or by phone. Potential to Convert to an Unsecured Card: After eight months of responsible use, Discover may review the account and offer to convert it to an unsecured card.

If this happens, the security deposit will be refunded, and the cardholder will be able to use their credit card with no deposit requirement. Having an unsecured credit card can be a significant win for your credit score.

Who Should Get the Discover it Secured Credit Card? The Discover it Secured Credit Card is designed for those with limited or damaged credit history, those who are starting to build a credit history, and those who want to rebuild their credit score.

If you have struggled to qualify for an unsecured credit card or are new to using credit cards, the Discover it Secured Credit Card is an excellent option. What makes the Discover it Secured Credit Card particularly appealing is the opportunity to convert to an unsecured card after eight months.

Having an unsecured card can improve your credit score significantly and can ultimately lead to greater financial freedom.

Conclusion

The Discover it Secured Credit Card is an excellent option for those who are building or rebuilding their credit score. Benefits of secured credit cards include helping to establish a credit history, potentially qualifying for more credit in the future, and building good credit habits.

The Discover it Secured Credit Card offers unique features such as cashback rewards, no annual fees, and potential conversion to an unsecured credit card. If you are looking to improve your credit score, this secured credit card may be an ideal option for you.

3) Card Basics

Looking for an ideal credit card can often be a daunting task. Still, the Discover it Secured Credit Card stands out among a variety of credit cards for its excellent features and benefits.

Firstly, the card is designed to help cardholders establish or rebuild their credits. It offers a range of features that not only encourage good credit habits but also provide benefits that reward responsible card usage.

Cashback Rewards and Free Credit Score Access

Most importantly, as mentioned earlier, the Discover it Secured Credit Card offers cardholders the chance to earn cashback rewards, which are a rare perk for secured credit cards. Cardholders earn 2% cashback at gas stations and restaurants on up to $1,000 in combined purchases each quarter.

They also receive 1% cashback on all other purchases, providing cash rewards that add up quickly, even though they seem small. Cardholders also enjoy free FICO score access, giving them more visibility into their credit scores.

Discover automatically updates your FICO score each month, showing the cardholders the progress they’re making in improving their credit scores. This benefit allows cardholders to monitor their credit scores closely while using the card properly and maintaining good credit habits.

Late Payment Fee Forgiveness and Refundable Deposit

It’s frustrating to have to pay a late fee each time you miss your payment deadline, which is why Discover’s late payment fee forgiveness is an attractive feature. This means you won’t be charged a late fee for your first late payment.

Although Discover recommends that cardholders should always try to make their payments on time, it’s nice to have this feature as a backup. The Discover it Secured Credit Card requires cardholders to place a refundable deposit to act as collateral for the card.

The minimum deposit amount is $200, and the cardholder is limited to a maximum deposit of $2,500. Apart from the security aspect that the deposit provides, it also helps to determine the card’s credit limit, which ranges between $200-$2,500.

4) Discover it Secured Credit Card Benefits and Perks

Generous Welcome Offer and Earning Cashback Rewards

Firstly, the Discover it Secured Credit Card offers a generous welcome offer to its cardholders. Discover matches all the cashback rewards you earn at the end of your first year, effectively doubling the rewards accumulated throughout the year.

Besides, earning cashback rewards while using secured credit cards is an uncommon feature, and Discover offers this great perk to its cardholders. As mentioned earlier, cardholders earn 2% cashback at gas stations and restaurants on up to $1,000 in combined purchases each quarter.

Cardholders also receive an unlimited 1% cashback on all other purchases automatically. The cashback is redeemable in any amount and at any time, and cardholders have a lot of options when it comes to redemption.

Accessing A Free Credit Score and Security Features

The Discover it Secured Credit Card’s considerable advantage worth mentioning is free credit score access. Cardholders get free FICO score access, which refreshes every month, giving customers more control over their credit score tracking and improvement progress.

Security features are essential when it comes to credit cards, and Discover it Secured Credit Card offers a few added security measures. The card comes equipped with a $0 fraud liability feature, which acts as a second layer of security in the event of unauthorized purchases on the card account.

Furthermore, cardholders can freeze or unfreeze their account in-app if they suspect fraud or need to pause their spending temporarily.

Conclusion

Overall, the Discover it Secured Credit Card provides users with a range of features and benefits that help users establish or rebuild their credit scores while still enjoying a decent credit card experience. With cashback rewards, free credit score monitoring, and late payment fee forgiveness, the Discover it Secured Credit Card sets itself apart from other secured credit cards.

With additional features like a generous welcome offer and security features, the card becomes an excellent option for those looking for a card to build or rebuild their credit score.

5) Drawbacks to This Card

The Discover it Secured Credit Card may have numerous benefits, but like all credit cards, it also has its share of drawbacks. Let’s explore two possible disadvantages of this credit card.

Required Security Deposit and Limited Line of Credit

The Discover it Secured Credit Card requires cardholders to pay a security deposit. Most other cards that do not require a security deposit, so this may be seen as a drawback.

The minimum deposit amount is $200, and the deposit determines the card’s credit limit. While this is an excellent way to ensure responsible card usage and offers less risk to issuers, it is a significant burden for some users.

The maximum deposit is $2,500, so the total credit limit tops out at $2,500. This can be a problem for users who may need higher credit limits in emergencies or unforeseen scenarios.

Absence of a 0% APR Intro Offer for Balance Transfers

Balance transfer cards are attractive to those who have high debt balances. This is because they provide 0% introductory APR for a specific period, allowing cardholders to pay off their balances interest-free.

Still, the Discover it Secured Credit Card doesn’t offer this feature, making it unattractive to users looking for it. As a result, the Discover it Secured Credit Card may not be the best option for those who want to transfer their balances from other credit cards to save on higher interest rates.

6) Earning and Redeeming Cashback Rewards

The Discover it Secured Credit Card offers cashback rewards, making it more appealing than other secured credit cards. But just how does this rewards program work?

The Unique Rewards Program That Includes Bonus Categories

Cardholders earn 2% cashback in bonus categories that change every quarter, such as gas stations, restaurants, grocery stores, Amazon, and more. The bonus category cashback is capped at $1,000 in purchases each quarter, and all other purchases earn 1% cashback automatically.

Cardholders receive a quarterly calendar informing them of the upcoming bonus categories. This system is unlike traditional rewards programs where cardholders must spend a certain amount to qualify for bonus rewards.

Discover awards cardholders for the purchases they make, making it easy for everyone to benefit from the cashback rewards program.

Versatility of Cashback Rewards Redemption Options

The Discover it Secured Credit Card offers a range of options for redeeming cashback rewards. Cardholders can choose to redeem their cashback rewards as a statement credit, electronic deposit to a bank account, gift cards from participating retailers, or online shopping from Amazon.com.

Discover’s mobile app and website make it easy to redeem your rewards, and there is no minimum to redeem. This versatility helps you use your rewards to their fullest potential.

Conclusion

No credit card is perfect, and the Discover it Secured Credit Card has its share of drawbacks. Despite the security deposit requirement and limited line of credit, the card provides a terrific opportunity for building or rebuilding credit scores while earning valuable cashback rewards.

The absence of a 0% APR intro offer for balance transfers may deter some users, but the advantages of the cashback rewards program make the Discover it Secured Credit Card a worthy consideration. By keeping in mind how to earn and redeem cashback rewards, the Discover it Secured Credit Card can provide users with an excellent credit card experience.

7) Discover it Secured FAQs

If you’re still considering the Discover it Secured Credit Card, here are some frequently asked questions that may help you learn more about the card.

Confirming Discover it Secured as a Good Card for Building Credit

The Discover it Secured Credit Card is an excellent option for building or rebuilding your credit score. The card provides numerous features that help encourage good credit habits, such as regular reporting to credit bureaus of your responsible card usage.

By using the card responsibly and paying on time, users can build their credit scores and eventually qualify for better credit options.

Information About Increasing Credit Limits and Becoming Unsecured

Discover it Secured Credit Card cardholders may be allowed to increase their credit limit based on whether they make on-time payments, use their card regularly, and manage their credit responsibly. While the credit limit typically corresponds to the amount of money deposited, an increase increases users’ buying power.

Additionally, after eight months of responsible use, Discover may consider cardholders for unsecured card conversion, which means you’ll no longer need to place a security deposit. The ability to switch to an unsecured credit card ultimately signifies that you’ve built a solid credit score and proven yourself with responsible card usage.

Payment Reporting to Credit Bureaus

Discover it Secured Credit Card reports cardholder payment activities to all three major credit bureaus – Equifax, Experian, and TransUnion. By doing so, this allows users to establish a solid credit history and maintain strong credit scores, potentially opening up more significant lines of credit in the future.

8) Other Cards to Consider

Discover it Secured Credit Card is not the only secured credit card available. Here’s a comparison of the Discover it Secured Credit Card with other secured credit card options available in the market.

Comparison of Discover it Secured to Other Options

The first on the list is the Capital One Platinum Secured Credit Card. It is a secured credit card with no annual fees and a refundable security deposit that ranges from $49 to $200, depending on your creditworthiness.

This card also offers access to higher credit lines after making the first five monthly payments on time. Another option is the OpenSky Secured Visa Credit Card.

With a minimum deposit of $200, this card offers credit lines up to $3,000. While it doesn’t offer rewards or cashback, it’s perfect for those who want to rebuild credit and establish a solid credit history.

Apart from this, this card doesn’t require a credit check, making it an excellent option for those who have poor credit scores. Both Capital One Platinum Secured Credit Card and OpenSky Secured Visa Credit Card are great options that provide the essential benefits of a secured credit card, such as building or rebuilding credit.

However, Discover it Secured Credit Card’s cashback rewards make it a stand-out option compared to the other secured credit cards available.

Conclusion

When choosing the right credit card, it’s important to consider what features align with your requirements. The Discover it Secured Credit Card may not be perfect for every credit card user, but it offers valuable features such as cashback rewards, free credit score monitoring, no annual fees, and the opportunity to become an unsecured credit cardholder.

Other secured credit cards available offer slightly different benefits, so it’s essential to evaluate each option before settling on one. In conclusion, the Discover it Secured Credit Card is an excellent option for those who are building or rebuilding their credit scores.

With its unique features that include cashback rewards, no annual fees, free credit score updates, forgiving late payment fees, and the possibility of becoming an unsecured credit cardholder, it stands out amongst other secured credit card options. While it may have drawbacks like a required security deposit and limited credit, the card presents a range of benefits that make it a worthy choice.

By considering different factors like rewards programs, credit bureau reporting, and comparisons to other secured credit cards, users can make an informed decision about which card suits them best. Building or rebuilding credit helps individuals take control of their financial future and open up more credit options, which can ultimately improve their quality of life.

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