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If you need a secured credit card, there are a number of options on the market. However, two of the leading credit card brands, Capital One and Discover also have an offering.
The Capital One Secured card has no annual fee and you can get a $200 credit limit with a deposit of $49 to $200, depending on your credit. However, with responsible use, you could get your deposit back and upgrade to an unsecured standard Capital One Platinum Secured card. You can also automatically be considered for a higher credit limit after six months.
The Discover It secured card has a more flexible credit limit. The amount you pay as a deposit will reflect as your credit limit from $200.
However, after seven months, Discover will automatically conduct account reviews each month to see if you can qualify for a standard unsecured card and the return of your deposit.
General Comparison
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| |
|---|---|---|
Platinum Secured from Capital One | Discover it Secured | |
Annual Fee | $0 | $0 |
Rewards | N/A | 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and unlimited 1% cash back on all other purchases |
Welcome bonus | N/A | Discover will match all the cash back you’ve earned at the end of your first year. |
0% Intro APR | N/A | None |
Foreign Transaction Fee | $0 | 3% |
Purchase APR | 30.74% (Variable) | 28.24% Variable |
Simulation: Which Card Gives More Rewards?
Since the Capital one secured card doesn't provide any type of rewards, we can only calculate what Discover offers.Â
As you can see, depends on your expenses, the total amount can be nice, especially for a secured card.
|
| |
|---|---|---|
Spend Per Category | Platinum Secured from Capital One | Discover it Secured |
$8,000 – U.S Supermarkets | / | $120 |
$3,000 – Restaurants
| / | $30 |
$2,000 – Hotels | / | $20 |
$4,000 – Gas | / | $40 |
Annual Value | / | $210 |
Compare The Perks
Platinum Secured from Capital One
- Increase your credit line: The Capital One Secured offers the opportunity to raise your credit line. Although the minimum credit line is $200 with a deposit of $49, $99 or $200, you can deposit more up to $1,000 to raise your credit line.
- No foreign transaction fees: You can use your Capital One Secured card abroad without worrying about incurring costly fees. This card has no foreign transaction fees at all.
- $0 fraud liability: If your card is stolen or lost, you will not be responsible for any unauthorized charges.
- CreditWise from Capital One: CreditWise allows you to monitor your credit score, so you can keep track of the progress you’re making with your Capital One Secured.
- Eno Assistance: Eno the Capital One assistant can monitor your account 24/7 and you’ll receive an alert if there are any potentially suspicious transactions on your account. You can also use Eno to answer any questions you may have or use virtual card numbers to pay for online purchases, so you don’t need to share your actual card number.
Discover it Secured
- Cash back match: Discover will also match your cash back dollar for dollar at the end of your first year. This has no earnings cap, so the more cash back you earn throughout the first year, the bigger the cash back match.
- Free FICO score access: Discover allows you to see your FICO credit score for free. This will allow you to track how your credit actions impact your credit score.
- $0 Fraud Liability Guarantee: Discover’s Fraud Liability Guarantee ensures that you are never responsible for any unauthorized purchases on your card.
- Freeze It account controls: You can use the Freeze It feature on the Discover app or website to freeze your account if you misplace your card. This will prevent any new balance transfers, cash advances or purchases.
Compare The Drawbacks
Of course, no credit card is perfect and it is important to be aware of the potential drawbacks before making the decision on which card is best for you.
Platinum Secured from Capital One
- Higher APR
When compared head to head, it is obvious that the Capital One secured card has a higher APR. This makes it a little uncompetitive when compared to the Discover It and other secured card options.
- No Rewards
Unlike the Discover It, the Capital One Secured card offers no rewards. So, you will not get any perks or additional advantages for using this card other than as a credit card for those with poor credit.
Discover it Secured
- Higher Minimum Deposit
Although there is the flexibility to have your credit limit match your deposit, the minimum $200 limit will require a $200 deposit.
However, with the Capital One card, you may be able to access the same credit line with just a $49 deposit.
- No Virtual Assistant
While the Discover app and website interface are good, you don’t have access to a virtual assistant, like Capital One’s Eno.
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Compare Redemption Options
Since there are no rewards with the Capital One Secured, we’ll concentrate on the redemption options for the Discover It.
You can redeem your rewards at any time and there are no reward expires to worry about. You can opt for an account credit or check. However, you can also use your rewards at checkout with PayPal purchases. There is also a list of merchant partners where you may choose gift cards from $5. Alternatively, you can make a charitable donation from one cent.
How to Maximize Cards Benefits?
Like any other card, there are some things that can help you to get more rewards with the same use, here are some:
- Monitor Your Credit Score – One of the features common to both cards is a way to track your credit score. This is the best way to maximize the benefits of card membership. If you’re looking for a secured card, the chances are that you are looking to build or fix bad credit. With access to your credit score, you can monitor how your actions impact your score, so you can develop good financial habits for the future.
- Build Your credit – besides making payments on time, make sure to increase your credit limit when you're eligible. It would help you to decrease your credit utilization rate and build your score more quickly.
- Maximize Rewards Responsibly (Discover) – You can also maximize the card benefits of the Discover It Secured by ensuring that you make use of the 2% cash back category. You can earn 2% on up to $1,000 each quarter on restaurant and gas station purchases, so make sure that you plan your purchases accordingly.
Customer Reviews: Which Card Wins?
Capital One Secured
Satisfied customers report that this card does make it easier to improve your credit score. It is a basic card that allows you to focus on building or rebuilding your credit.
Negative reviews highlight some frustration about upgrading to an unsecured card. While Capital One advertises the potential to upgrade after six months, many users have been waiting for over one year and have had no luck.
Discover It Secured
Satisfied customers report that the application and approval processes for this card are remarkably smooth, and you can start making improvements to your credit score almost immediately.
Negative reviews highlight some issues with customer support, particularly if you want to cancel the card and get your deposit refunded. However, these complaints are fairly infrequent, so it may not be a widespread issue.
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Bottom Line
A secured card can be a great way to gain access to credit card functionality and start working on building or rebuilding your credit.
However, there are some key differences between the Capital One Secured and Discover It secured which will influence which one is the better option for you.
Why You Might Want the Capital One Secured?
The Capital One Secured is a great option that could be good if:
- You want to pay a lower deposit: While both cards have a minimum credit limit of $200, if your credit supports it, you may only need to pay a $49 deposit to access this level of credit. This creates flexibility that you may not get with the Discover It, as your line of credit is equal to your deposit, dollar for dollar.
- You want transaction alerts: Eno the Capital One virtual assistant will monitor your account 24/7 and will send you an alert if there is any suspicious activity.
- You’re looking to upgrade to a Capital One Platinum: If you’re working on your credit, the Capital One Secured provides a good avenue to access the unsecured Capital One Platinum card. Capital One will automatically review your account and if you’ve demonstrated responsible account activity you could get an upgrade and your deposit refunded.
When You Might Want the The Discover it Secured?
The Discover It Secured can be a good fit for your needs if you're looking for:
- You want to earn rewards: This is the biggest attraction as most secured cards do not offer rewards. There is the potential to earn up to 2% cash back and the base 1% is unlimited.
- You want a welcome bonus: Discover has an excellent welcome bonus for its new customers. It will match your cash back, dollar for dollar, at the end of the first year. This means that the more cash back you earn, the larger your bonus.
- You want to upgrade to a Discover Unsecured card: As with the Capital One Secured, the Discover It provides a pathway to access an unsecured Discover card. After seven months, you’ll get automatic account reviews monthly to evaluate your qualification.
Compare The Alternatives
If you're looking for a secured credit card to build credit – both Discover and Capital One have great options. However, there are some alternatives you may want to consider, especially if your have poor credit:
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|
| |
|---|---|---|---|
OpenSky® Secured Visa® Credit Card | First Progress Platinum | Milestone® Mastercard® | |
Annual Fee | $35 | $29
| $175 the first year; $49 thereafter |
Foreign Transaction Fee | 3%
| 3%
| 1% of each transaction in U.S. dollars
|
Purchase APR | 25.64% (variable) | 25.24% Variable
| 35.90%
|
Compare Discover It Secured Card
Unlike the Citi Secured card, the Discover it Secured offers rewards in addition to credit-building features, and therefore, it's our winner.
Discover it Secured vs Citi Secured Mastercard: How They Compare?
Chime wins when it comes to no credit check and no foreign transaction fees, but Discover it Secured is our winner due to rewards and bonus.
Chime Credit Builder Secured Visa vs Discover it Secured: How They Compare?
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Discover It Secured
