A secured credit card makes an excellent tool to rebuild or boost your credit score. When you get one, the important thing is to pay your bills on time each month. If you pay off the bill in full each month, you will also avoid paying any interest. Only one secured credit card will give you cash back with your purchases – the Discover it® Secured Credit Card.
How a Secured Credit Card Works
When your credit score is low and you need to raise it, you will find that it can be difficult to get a credit card of any kind. If you find one, you will quickly see that it has a very low credit limit and high-interest rates. A secured credit card is a way around this problem.
The secured credit card works just like a regular credit card. You can use it anywhere a regular credit card would be accepted. The difference is that you do not want to try to charge more than your credit limit. You will get a bill each month for your charges.
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A Deposit Is Required
When applying for the card, you pay the credit card company a deposit – which will become the credit limit on the card. This Discover card requires a $200 minimum deposit, but it will accept any amount up to $2,500. The deposit will be held until you either cancel the card or accept an offer from the company for an unsecured credit card. The company will often offer you one once you have proven you can make the payments and pay them on time.
The company offering a secured credit card (Discover) reports to all three credit bureaus. Using this type of credit card is one of the fastest ways to raise your credit score.
Get 2% Cash Back
The Discover it® Secured Credit Card is the only secure card that will give you cash back. Other ones are not so generous. You will get 2% cash back on all purchases made at gas stations and restaurants. There is a limit of $1,000 per quarter that will earn cash back. Discover will also give you 1% cash back on any other purchases you make and there is no limit on them.
The Discover it® Secured Credit Card will provide you with an additional cash back benefit. At the end of your first year, the company will automatically give you a matching amount of all the cash back you earned that year. The matched amount does not come with a limit.
The Deposit Is Refundable
Eventually, you will get your deposit back. It is fully refundable but it is not refundable if you default on payments. You can also get your deposit back if you pay off the entire bill and close the account.
The Discover company will conduct automatic reviews on your payment history after you have had the credit card for eight months. You will need to have raised your credit score to about 670 before getting an offer for a new card. If you have shown that you can make your payments on time each month and not go over your deposit amount, the company may refund your money and issue you an unsecured credit card.
There is no annual fee on this card. If you do not pay the bill entirely each month, you will be charged an annual interest rate of 23%.
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