The new Discover it Secured Card wins: No fee, Free FICO and up to 2% cash back

Updated August 1, 2017
Discover has just launched a new product, the Discover it® Secured Card – No Annual Fee . Secured credit cards are an excellent way to build your credit with responsible use. With this product launch, Discover has created one of the best secured cards on the market. You do need to make a security deposit of $200 or more to establish your credit line (up to the amount that Discover can approve). If you are unable to afford the $200 deposit, you should consider the Capital One Secured MasterCard , which only requires a $49 deposit. But if you can afford the $200 deposit, this new card is clearly one of the best no fee secured credit cards available.

Key Product Features
Here are the key product features:
No annual fee:  There is no annual fee on this card. You do need to make a security deposit of at least $200. If you want a bigger limit, you will have to make a bigger deposit.
Automatic monthly reviews starting at 8 months:  After just eight months, Discover will start monthly automatic reviews of your account to see if you can be transitioned to an account with no security deposit. With an 8-month review, Discover has one of the best upgrade policies in the market.
Earn cash back:  Most secured credit cards do not offer any rewards. With Discover it, you have the opportunity to earn cash back while earning rewards. You can earn 2% at restaurants and gas stations (on up to $1,000 of combined purchases each quarter). Plus, get 1% cash back on all your other purchases. Earning cash back is not the primary reason to select a secured credit card, but it is a nice option to have available.
Free FICO Credit Score:  Discover will provide you with a copy of your official FICO credit score. If you use a secured credit card properly, you should expect to see your score increase over time. And by providing your FICO score for free, you will be able to watch your improvement.
Monitor Your Social Security Number:  Discover will monitor your Social Security Number and alert you if they find your Social Security Number on any of thousands of risky websites. Activate for FREE. This is a great feature that will help alert you of possible fraud.
You can learn more and apply by clicking on the link below:

How to Use a Secured Credit Card
A secured credit card is an excellent way to build or rebuild your credit history. In order to gain the most number of points in the shortest amount of time, you need to have a strategy. We recommend the following strategy (and describe how it helped someone build an excellent score in one year here ):

Avoid spending more than 10% – 15% of your available credit limit . Yes, that means if your credit limit is only $200, you should not spend more than $20 – $30 a month. Utilization is a very important part of your credit score. To calculate utilization, divide your statement balance by your available credit. People with the best credit scores have utilization well below 20%. Because you want to build an excellent credit score, you should keep your utilization low.
Pay your statement balance on time and in full every month. To ensure your payments are made on time every month, you should consider automating the monthly payments. At the Discover website, you can sign up to have your monthly payment debited automatically from your checking account.
Just continue to repeat Step #1 and Step #2. Your credit score should improve over time, which will help you qualify for a standard credit card.

If you have less than perfect credit and need to borrow money, you should consider shopping for a personal loan .
Who is Eligible to Apply?
According to disclosures on the Discover website, you are eligible to apply if:

You are at least 18 years old.
You have a Social Security Number.
You have an address in the United States.
You have a bank account in the United States. Note:  You will need to provide your routing number and account number when you apply. If your account is overdrawn, it is highly unlikely that you will be approved.

Your credit history will be reviewed, and not all applications will be approved. The card is best for those with no credit, or scores of 670 or less.
The Application Process
You can apply online and Discover usually provides a decision instantly. You will need to make your security deposit as part of the application, which is why Discover asks for the routing number and account number of your bank.
Please remember that when you apply for the secured credit card, you will have an inquiry on your credit report just like an application for a normal credit card.
Alternate Secured Credit Cards
Discover it has one of the strongest offerings in the market. However, it might not be right for everyone. Here are some other good options.
If you cannot afford the $200 minimum deposit, you should consider the Capital One Secured MasterCard. There is no annual fee and a minimum deposit of $49. You will also be able to receive your FICO score for free. Capital One is known for accepting people with more adverse credit histories. So, if you are rejected by Discover, you might want to consider trying Capital One instead.

You should also consider a secured credit card from your local credit union. MagnifyMoney has a list of some of the best no fee secured credit cards offered by credit unions here .
Build Your Score, Not Your Balance
Secured credit cards are a great way to build your credit score. And, with this product launch, Discover has created an excellent tool. Just make sure you don’t use your credit card to build a balance and borrow money. Keep your balance well below 20% of your available credit, and pay your statement balance on time and in full every month. If you do that, you should start to see real improvement in your score.
The post The new Discover it Secured Card wins: No fee, Free FICO and up to 2% cash back appeared first on MagnifyMoney .

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