Table of Contents
Introduction
When it comes to building or rebuilding credit, secured credit cards can be a valuable tool. One such option is the Discover it Secured card, which offers individuals with limited or poor credit histories the opportunity to improve their creditworthiness. However, like any financial product, it's important to weigh the pros and cons before making a decision. In this article, we will explore the perks and potential disappointments of the Discover it Secured card, helping you make an informed choice about whether it's the right fit for your financial goals.
The Perks of Discover it Secured
1. Cashback Rewards: One of the standout features of the Discover it Secured card is its cashback rewards program. Cardholders can earn 2% cashback on up to $1,000 spent at gas stations and restaurants each quarter, and 1% cashback on all other purchases. This can be a great way to earn some extra money while building credit.
2. Credit Limit Increase: Discover offers cardholders the opportunity to have their account reviewed for a credit limit increase after just eight months of responsible card use. This can be a significant benefit for individuals looking to improve their credit utilization ratio and increase their overall creditworthiness.
3. No Annual Fee: Unlike many secured credit cards on the market, the Discover it Secured card does not charge an annual fee. This can save cardholders a significant amount of money over time, especially when compared to other secured cards that may charge annual fees of $50 or more.
4. Free FICO Credit Score: Discover provides cardholders with free access to their FICO credit score, allowing them to monitor their progress and track improvements in their creditworthiness over time. This can be a valuable tool for individuals looking to rebuild their credit.
The Potential Disappointments of Discover it Secured
1. Security Deposit: As a secured credit card, the Discover it Secured card requires cardholders to provide a security deposit, typically equal to the credit limit they are approved for. While this deposit is refundable, it can be a barrier for individuals who may not have the funds available to secure the card.
2. Limited Credit Limit: The credit limit on a secured credit card is typically equal to the amount of the security deposit. While this can be a positive aspect for individuals looking to control their spending and avoid accumulating excessive debt, it can also be a limitation for those who require a higher credit limit for certain purchases or emergencies.
3. Higher Interest Rate: Secured credit cards often come with higher interest rates compared to traditional unsecured credit cards. The Discover it Secured card is no exception, with an APR of 22.99% variable. It's important for cardholders to pay their balance in full each month to avoid accruing interest charges.
4. Limited Acceptance: Discover cards may not be as widely accepted as Visa or Mastercard, especially outside of the United States. While this may not be a significant concern for some individuals, it's important to consider if you frequently travel internationally or live in an area where Discover is not widely accepted.
Conclusion
The Discover it Secured card offers several perks that can make it an attractive option for individuals looking to build or rebuild their credit. From cashback rewards to the potential for a credit limit increase and free access to FICO credit scores, there are many benefits to consider. However, it's important to weigh these perks against the potential disappointments, such as the security deposit requirement, limited credit limit, higher interest rate, and limited acceptance.
Ultimately, the Discover it Secured card can be a valuable tool for individuals who are committed to responsible credit card use and are looking to improve their creditworthiness. By understanding the perks and potential disappointments, you can make an informed decision about whether this card aligns with your financial goals. Remember, building credit takes time and patience, so it's important to choose a card that fits your needs and supports your long-term financial success.
