Discover Launches Credit Building-Focused Card

Discover announced today (Jan. 25) the rollout of a new credit card aimed at helping consumers build and/or rebuild their credit.

But it comes with a twist: There’s a built-in security deposit to ensure those consumers are motivated to use the card responsibly. It’s coined the Discover it Secured Credit Card, a no annual fee card that’s designed to mimic the same benefits offered by the more well-known Discover it Card, that’s most known for its cash-back bonuses and free monthly statement FICO credit scores.

Due to the nature of whom the card is tailored for, the Discover it Secured Credit Card requires applicants to provide a security deposit, which Discover holds for the first year of the cardmember’s agreement. Discover then reviews the account to see if that customer can transition to the type of account that doesn’t require such measures, which would be based on responsible credit management.

“We know how essential it is to establish a healthy credit history when applying for a car or home loan, an apartment lease and when determining interest rates on loans,” said Ryan Scully, Discover VP of marketing. “Discover wants to help consumers build their credit. Our experience shows that 99 percent of new Discover it Secured cardmembers who didn’t previously have a FICO credit score received one on their Discover statements within nine months.”

While this card was previously available to select online applicants, Discover has now officially launched the option to all consumers. Features of the card include 2 percent cash-back bonus at gas stations and restaurants on up to $1,000 in combined purchases each quarter, plus 1 percent cash-back bonus on all other purchases. New cardmembers can double that cash back they earn at the end of their first year as a cardmember. Credit limits will range from $200–$2,500, and limits will be based on how much the applicant can put down as a deposit.

“Some secured cards in the marketplace are watered-down versions of other card products that have annual fees and don’t offer any rewards,” Scully added. “Discover’s Secured Credit Card comes with the same rewards and benefits that every Discover it cardmember enjoys, all with no annual fee.”