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Need to build credit? Look no further than the Discover it Secured Credit Card for cash back and no annual fee

Select reviews the Discover it Secured Credit Card, a top-rated card for building credit.

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Beginners just starting out on their credit journey and those looking to build back up a low credit score should consider getting a secured credit card.

With a secured card, you typically make a security deposit upfront that acts as your credit limit (usually a minimum of $200). This gives you the chance to get used to having a line of credit while also preventing you from overspending. The security deposits acts as collateral should you default on your monthly payments. Once you graduate to an unsecured, or traditional, credit card you get your deposit back.

The Discover it® Secured Credit Card makes it easy to transfer to an unsecured card after only seven months of card membership, plus cardholders get many benefits that are typically found with your everyday credit card. Cardholders can earn cash back, receive a generous welcome bonus, use the card overseas without incurring added fees and more — all for no annual fee.

Below, Select breaks down everything you need to know about the Discover it Secured Credit Card, from its rewards to its additional benefits and fees, so you can decide if this card is right for you.

Discover it Secured Credit Card review

Discover it® Secured Credit Card

On Discover's secure site
  • Rewards

    Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.

  • Welcome bonus

    Discover will match all the cash back you've earned at the end of your first year

  • Annual fee

    $0

  • Intro APR

    N/A on purchases

  • Regular APR

    23.24% Variable

  • Balance transfer fee

    3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

  • Foreign transaction fee

    None

  • Credit needed

    New / Rebuilding

Pros

  • Cash-back program
  • Generous welcome bonus
  • Starting at seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit

Cons

  • Cash-back program limits earnings: 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%
  • Low credit line prevents cardholders from charging high-cost items or many expenses

Discover it Secured Credit Card rewards

Cardholders of the Discover it Secured Credit Card earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter (then 1%). They also earn unlimited 1% cash back on all other purchases automatically.

Discover offers a unique welcome bonus for its new users: In their first year only, new card members will automatically have all the cash back they've earned during the first 12 billing cycles matched by Discover. So, if you earned $200 cash back at the end of your first year, Discover will give you an additional $200. There's no limit on how much cash back Discover will match in the first year, so this could potentially be a large windfall of rewards.

Additional benefits

The Discover it Secured Credit Card stands out for its solid cash-back program and generous welcome bonus for a secured credit card. Opening a secured credit card is also a great way for those with a low or nonexistent credit score to start building credit.

But a big perk is how seamless it is to transition from a secured credit card to an unsecured account. Starting at seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit. This is an incentive to manage your account responsibly by not spending over your credit limit and paying your bills on time and in full each month.

Fees

New cardholders of the Discover it Secured Credit Card must pay a minimum $200 security deposit, which is a typical amount for secured credit cards. Your credit limit is equal to your deposit — with the maximum deposit being $2,500.

This card does not have an annual fee.

Bottom line

For a well-rounded secured card that offers rewards on your spending, a welcome bonus and a clear path for upgrading to a traditional credit card, the Discover it Secured Credit Card is a no-brainer.

The Petal® 2 "Cash Back, No Fees" Visa® Credit Card is a good alternative, especially for those who may not have any credit history. If you do have a credit history, it will be reviewed and considered as part of the application process. Though the card doesn't have a welcome bonus like Discover's, it offers a cash-back program that rewards good credit behavior. You'll earn 1% cash back on eligible purchases right away and up to 1.5% cash back after making 12 on-time monthly payments. Plus, earn 2% to 10% cash back at select merchants. Read Select's review of the Petal 2 Credit Card to find out more.

Petal 2 Visa Credit Card issued by WebBank, Member FDIC.

For rates and fees of the Discover it® Secured Credit Card, click here.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.