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Your Path to Building a Credit History with a Secured Credit Card
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Your Path to Building a Credit History with a Secured Credit Card

Last Updated: April 4, 2023
3 min read

Key Points About: secured credit cards

  1. You usually don’t need a credit score to get a secured credit card.

  2. A secured credit card requires a security deposit equal to the credit limit the issuer approves you for.

  3. You can build a credit history, graduate to an unsecured credit card, and get your deposit back by making on-time payments and managing your other credit accounts responsibly.

When it comes to financial stability, a secured credit card might be able to help you reach your financial goals. Secured credit cards offer a good option for people with lower credit scores because there’s no credit score required to apply1 for most secured cards.

Did you know?

By using a secured credit card, you can demonstrate responsible credit management, such as making on-time payments and keeping your balances low. As long as your credit card issuer reports your payment activity to the three major credit bureaus, you can build your credit history with responsible use.2 And building a good credit history can help you secure loans like home and car loans and may even help you qualify for better terms, including lower interest rates.

Learn More About Discover Secured Credit Cards

How secured credit cards work

Applying for a secured card is similar to the application process for traditional cards—you’ll fill out an application with your basic financial information and give your permission to perform a credit check. But unlike other credit cards, if approved, you’ll be required to provide a security deposit equal to the amount the credit issuer approves you for. This deposit minimizes the risk for the issuer should you default on your debt.

Once you get your card, you can use your secured credit card just like a traditional credit card—you’ll make purchases up to your credit limit and receive a monthly statement with your payment and due date information.

Secured credit cards typically offer a refundable deposit and allow users to earn rewards while working towards qualifying for an unsecured credit card.

Did you know?

Using a secured credit card responsibly can set you on a path to getting an unsecured credit card. In fact, you can often graduate to an unsecured credit card after a series of on-time payments. With the Discover it® Secured Credit Card, you can upgrade to an unsecured card after 6 consecutive on-time payments and maintaining good status on all your credit accounts.3

Follow the path below to learn more about secured cards and how they may be able to help you start building a credit history.

What is a secured credit card?Is my credit score important?Building your credit should not be intimidatingWhat you need to know about the security depositLearn how to use your secured card responsiblyHow to graduate to an unsecured credit cardShould you apply for a secured card?You are ready to apply for a secured credit card

Important information

Make the most of your tax refund. Build your credit history.*

Apply for a Discover it® Secured Card and use your tax refund as a security deposit.**
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No credit score required to apply: Based on 2021 Discover it Secured credit card application data, applicants without a credit score may qualify. You must meet other applicable underwriting criteria. When we evaluate your creditworthiness, we consider all the information you provide on your application, your credit report, and other information. If you have a credit score, we may use that in our evaluation.

Builds credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your other credit card accounts and loans may adversely impact your ability to build credit.

Secured Card: Graduation Transparency: Monthly reviews start your seventh month as a customer. We will refund your security deposit if you have made all payments on time for the last six consecutive billing cycles on all your Discover accounts including any loans, and you’ve remained in “good status” on all credit accounts you are responsible for whether they are Discover accounts or not. “Good status” means: (1) your credit report shows no delinquencies, charge-offs, repossessions, or bankruptcies for the six months prior to our review; and (2) your Discover Secured Card is not in a prohibited status at the time of our review, including, but not limited to: closed, revoked, suspended, subject to tax levy, garnishment, deceased, lost/stolen, or fraud. Monthly reviews may be delayed if you change your payment due date. We typically process your refund in 2-3 business days based on your delivery preference. If you close your account and pay in full, we’ll return your deposit within two billing cycles plus ten days.

*Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.

**Minimum Security Deposit: A minimum security deposit of $200 is required to open this account and your security deposit must equal your credit limit. Your maximum credit limit (up to $2500) will be determined by your income and ability to pay.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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