If you’re a regular reader of this blog, you’ll have seen mention of the Discover it secured card. It’s one of the best secured cards currently on the market due to the fact it has the same rewards program as the regular unsecured version. For those with excellent credit this isn’t anything exceptional – but for those with no or bad credit even having a rewards program is fantastic.
Unfortunately there is no way to apply for the secured card directly. You have to apply for the regular version of this card, if you’re denied they will sometimes offer you a secured card. I did a bit of snooping (talked with somebody who works with Discover) and was told that they are currently offering the secured product to denied applicants that they believe would make good long term customers. When asked what they consider good long term applicants this is what he told me:
- Must not have any bankruptcies on file
- No credit history, with income
- Not a lot of new accounts on file
- 3+ years of paying on time if bad history on credit report
These are not hard & fast rules (apart from the bankruptcy on file) but guidelines. He also gave me a little tip, he said that if you’re denied for the unsecured card and don’t receive the secured card offer you can call the regular reconsideration/hotline and specifically ask for the secured product. This won’t guarantee that they’ll give it to you, but it will greatly increase your chances of being offered this product.
He wasn’t able to either confirm or deny that the card will graduate to the unsecured product with responsible prolonged used. For the majority of our blog readers this won’t be particularly useful information, but this product is one we get a lot of e-mails about so we hope this helps sort out some of the confusion.
I had a bankruptcy on my credit report and was still approved for the secured card $400 deposit and credit line. Two and a half years later after paying balance off in full each month the card still has not been graduated to an unsecured card. I applied for and was approved for a second discover it card with a $5000 unsecured line.
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I’ve had this card for 16 month and it will not graduate. Please don’t let them fool you when they say all you have to do is make timely payments for 12 months. This is not the case. I made perfect payments, 5-7x my minimum payment and I paid them the day the statement dropped. I also ran the balance up to 500,600,800,900 and made lump sump payments in those same amounts to pay it off. One person told me that I don’t have enough credit. I told her I am not going to open another account, just to get my money back from Discover ($1,000). Then I was told its based on total credit report. I have paid off the only two outstanding things on my credit and those were there when I got the secured card. Granted, for the last two months, I was carrying a VERY high balance of $900, but then I paid it off in a lump sum again. I am a student, so I have to use my card and then pay it off when I get a refund. Unfortunately, it looks like I have to pay the card off AND not use it and I am still not sure that will do the trick. I can assure Discover of one thing… I WILL NOT open another credit account just to get my funds back from Discover. I was told the same EXACT thing other people are reciting, “After 12 months of making timely payments, your deposit will be returned to you”. I can’t find anything about the deposit being returned anywhere in the Cardholder Agreement and the customer service reps are extremely vague. They will only tell you they cannot tell you why you were denied (which means I don’t know what to fix). How can I fix something if I don’t know what is broken? So, not sure if I would have done this knowing it could take 2-3 years to get my funds back. Other than refusal to release deposit, I love this card. Of course, I could pay off and close my account but that would hurt my credit and take me right back to where I was. I feel Discover is misleading people when offering the card and they don’t want to release the funds because they make interest on our deposits. Ho-hum.
i have read in other forums that after 12 months with good payment history they will become unsecured with a minimum of $500 credit line.
Also surprised to hear about the no BK considering they have approved unsecured cards with BK. Do you know if they will consider you for a secured account if you had a past CO with them.
Not sure, but I imagine having a CO with them would greatly reduce your chances of being offered the secured product.