What the Discover It Secured Card Does
The Discover It Secured is a credit card backed by a cash deposit you place with Discover Bank. You put down a deposit (usually between $200 and $2,500), and that amount becomes your credit limit. You use the card like any other credit card — make purchases, pay a monthly bill — and Discover reports your payment history to the three major credit bureaus. After you demonstrate consistent on-time payments over time, Discover may convert your account to an unsecured card and return your deposit.
The card charges an annual fee of $0, which is unusual among secured cards. It also offers cash back rewards: 1% cash back on most purchases and 2% cash back on purchases at gas stations and restaurants (up to $20 per quarter, then 1% after). These rewards are the same as Discover's unsecured card, which is rare for a secured product.
Key Takeaways
- Your deposit becomes your credit limit, and Discover holds it as collateral while you build credit history.
- The card has no annual fee and offers cash back rewards (1% general, 2% at gas and restaurants), which is uncommon for secured cards.
- Discover reports your account activity to all three credit bureaus, so on-time payments directly affect your credit score.
- After you show a pattern of responsible use, Discover may convert your account to unsecured and release your deposit without you having to ask.
- The card works best if you can afford to lock up your deposit for several months and make purchases you would make anyway.
How Your Deposit and Credit Limit Work
When you open the account, you choose your deposit amount between $200 and $2,500. Discover freezes that money in a separate account and uses it as collateral. Your credit limit equals your deposit — if you deposit $500, your limit is $500. You cannot spend your deposit; it sits untouched at Discover.
Your deposit earns no interest. Unlike some secured cards or savings accounts, Discover does not pay you anything on the money you deposit. This is a cost of using the card to build credit: your deposit is essentially a fee for access to credit reporting.
If you miss payments or default on the card, Discover can explore your deposit to your balance. If you close the account in good standing, Discover returns your deposit to your bank account, usually within 5 to 7 business days after the account closes.
Cash Back Rewards and How They Work
The Discover It Secured offers 1% cash back on all purchases and 2% cash back at gas stations and restaurants, capped at $20 per quarter (then 1% after you hit the cap). You earn cash back automatically on every purchase — there is no category selection or set up required.
Cash back appears as a credit on your monthly statement. You can use it to pay your bill, request it as a check, or let it accumulate. Discover also runs quarterly bonus categories (like 5% back on rotating categories) for cardholders, though the Discover It Secured may have different or no bonus categories — check your account terms when you open it.
Because the card reports to all three credit bureaus, the cash back is secondary to your real goal: building a credit history that lenders will trust. The rewards are a bonus, not the reason to choose this card over others.
Credit Reporting and Building Your Score
Discover reports your account to Equifax, Experian, and TransUnion every month. This means every on-time payment, every late payment, and your overall balance all show up on your credit report. If you use the card responsibly — paying on time and keeping your balance low — your credit score should improve over time.
The speed of improvement depends on your starting point. If you have no credit history, you may see movement within 3 to 6 months of on-time payments. If you have damaged credit from past late payments or collections, improvement takes longer because negative marks stay on your report for 7 years.
Your payment history is the largest factor in your credit score (about 35%), so making every payment on time matters far more than the cash back or the annual fee. Set up automatic payments for at least the minimum if you struggle to remember due dates.
When Discover Converts Your Account to Unsecured
Discover does not publish exact criteria for when it converts a secured account to unsecured, but the company typically looks for 6 to 18 months of on-time payments and responsible use. Some cardholders report conversion after 6 months; others wait longer. Discover initiates the conversion — you do not have to ask or reapply.
When Discover converts your account, your deposit is released and returned to your bank account. Your credit limit may stay the same or increase. Your cash back rewards and other card terms remain the same. The conversion happens automatically; you will receive a notice in the mail or through your online account.
If Discover does not convert your account after a year or more of on-time payments, you can contact customer service and ask about your options. Some cardholders have reported success requesting a manual review, though there is no may provide Discover will convert.
Comparing the Discover It Secured to Other Secured Cards
Most secured cards charge an annual fee ($25 to $99 is common). The Discover It Secured charges $0, which saves you money if you carry the card for a year or longer. However, other secured cards may offer higher cash back rates, lower deposit minimums, or faster conversion timelines — it depends on your priorities.
The Capital One Secured Mastercard, for example, has no annual fee but offers no cash back. The OpenSky Secured Visa has no credit check and accepts deposits as low as $200, but charges a $35 annual fee and offers no rewards. The Citi Secured Mastercard offers no annual fee and 1% cash back on all purchases, but requires a minimum $500 deposit.
If cash back and no annual fee matter most to you, the Discover It Secured is competitive. If you want the lowest deposit or fastest conversion, another card might suit you better. Compare based on your deposit amount, how long you plan to carry the card, and whether rewards matter to you.
What Happens If You Miss a Payment or Default
If you miss a payment, Discover reports it to the credit bureaus just as it reports on-time payments. A single late payment can lower your score by 50 to 100 points or more, depending on your current score and history. Late payments stay on your credit report for 7 years.
If you miss a payment by 30 days or more, Discover may explore your deposit to your account balance. If your balance exceeds your deposit, you owe the difference. Discover will pursue collection just as it would with any other credit card debt.
If you default, Discover will not convert your account to unsecured. Your account will likely be closed, and your deposit will be applied to what you owe. Defaulting also severely damages your credit score and makes it harder to borrow money for years.
Frequently Asked Questions
Can I use my deposit as a payment?
No. Your deposit is collateral and stays frozen in a separate account. You cannot withdraw it or use it to pay your bill. You must pay your monthly statement from your regular bank account or income.
What if I want to increase my credit limit?
With a secured card, your limit is tied to your deposit. To increase your limit, you would need to deposit more money with Discover. Some cardholders report that Discover offers automatic limit increases after several months of on-time payments, but this is not may provide.
Does Discover check my credit before approving me?
Discover performs a soft credit inquiry for the Discover It Secured, which does not affect your credit score. However, the company may still decline your process based on your banking history, past defaults, or other factors. A soft inquiry means Discover is looking at your credit report but not making a hard pull that lenders see.
How long does it take to receive my deposit back after closing the account?
Discover typically returns your deposit within 5 to 7 business days after your account closes. The money goes back to the bank account you provided when you opened the card. If you close the account with an outstanding balance, Discover applies your deposit to that balance first.
Can I have multiple Discover It Secured cards?
Discover's policies on multiple accounts vary. Most cardholders can hold only one Discover It Secured card at a time, though you may be able to hold other Discover products. Contact Discover directly to ask about opening a second secured account if you need a higher total credit limit.