There are credit cards out there for people with bad or thin credit profiles, but most of these cards require you put some money down that serves as — or "secures" — your credit line. The whole thing's a trade-off. Your issuer feels better about the risk it's taking and you get some plastic to (hopefully) demonstrate your credit worth. The ultimate goal: Scoring an upgrade to a traditional credit card. Translation: Your security deposit gets returned and (also hopefully) your issuer offers you a higher credit limit.
Well, Discover just made it easier for their secured credit cardholders to reach said goal. This week, the issuer announced that, effective as of Thursday, it would be conducting reviews of Discover it Secured cardholders after seven months of card use instead a year. That means cardholders have to wait a full four months less for the opportunity to transition to a traditional account and have their security deposit refunded.
What's the Discover it Secured Card?
The Discover it Secured credit card (see full review here) was already one of the better secured credit cards on the market, given it's one of the few that offers rewards. Cardholders, who are required to put down a minimum of $200 to serve as a matching credit line, earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter and 1% cash back everywhere else. Plus, the card touts Discover it's cash back match offer, which essentially means cardholders can receive double the points they earned in their first 12 months at the end of that year. The card carries no annual fee and a standard variable purchase APR of 23.24%. The card reports credit behaviors to all three credit bureaus.
Talking Secured Credit Cards
It's important to note that the Discover it isn't the only solid secured credit card on the market. Capital One also offers a no-annual-fee Secured MasterCard that grants qualified cardholders access to a higher credit limit with no additional deposit after the first five monthly payments have been made on time. Plus, you can get an initial $200 credit line after making a security deposit of $49, $99, or $200, based on your creditworthiness. The Capital One Secured MasterCard (see full review here) carries a variable purchase APR of 24.99%.
Remember, it's important to read the fine print through and through to be sure any credit card you're considering is right for you. And, even if your credit card isn't secured, you'll want to use it responsibly. (Otherwise, you could wind up paying a whole lot of interest and your credit could take a hit. To find out how your financial behaviors are affecting your credit, you can view two of your credit scores, updated every 14 days, for free on Credit.com.)