The Discover it Secured Card offers numerous cash-back rewards and has no annual fee—just like unsecured Discover cards. It carries a variable APR of 27.74% as of May 2023.

Do secured credit cards build credit?

They can. Secured credit cards are aimed at people with limited or poor credit history and can be a good way to improve your credit score. By making regular, reliable payments on a secured credit card, you can improve your credit score and access less expensive forms of credit.

How does a secured credit card differ from an unsecured credit card?

With a standard, unsecured credit card, no deposit is required. With a secured credit card, the money that you borrow from your card issuer is a covered by a deposit.

This deposit acts as collateral on the account, providing the card issuer with security in case the cardholder can’t make payments. This reduces the risk to the card issuer, which in turn means that secured cards are available to borrowers with a poor or limited credit history.

How do I close a secured credit card?

You can generally close a secured credit card at any time, as long as you are up to date with your payments and there is no balance outstanding on the card. To do this, contact your card issuer.

When you close a secured credit card, you should get your deposit back, less any fees that your card issuer imposes. Alternatively, your card issuer may offer to convert your secured credit card to a standard card if you regularly meet your payments.

How can I change a secured credit card to an unsecured card?

If you regularly meet your payments on your secured credit card, your credit score should gradually improve. You can check your credit score online at regular intervals so you know when you have a good chance of being approved for a regular credit card. Sometimes, your card issuer will do this for you and automatically convert your secured card to an unsecured card (and typically increase your credit limit as well).

The amount of time this takes to happen varies greatly, but if your credit score is poor, then you should expect to make regular payments for a few months before you are approved for an unsecured credit card

The Bottom Line

Secured credit cards are a type of credit card that are backed by a cash deposit. This reduces the risk of lending to borrowers with poor or limited credit histories, and these borrowers can use secured credit cards to improve their credit score. Secured credit cards generally come with high levels of fees and interest, but they can allow borrowers to improve their credit history and access lower-cost forms of credit