These days, everyone is interested in your credit: landlords, potential employers, insurers and even cable companies and telephone companies. So what do you do if you’ve just started your credit journey or made an unfortunate mistake – because we’re human, and humans make mistakes – that negatively impacted your score?
Whatever your situation, there are many solutions to help you get started in credit or rebuild your credit. For example, the Self-Credit Builder account with Visa® secured credit card and the Discover it® secured credit card are two secured credit cards that can help you build your credit.
However, these cards are very different in how they work. For starters, Discover it Secured has no annual fee, while using the Self Visa (which is little more than just a card) will definitely cost you, especially in the long run. Still, depending on your personal situation, it can be money well spent.
Before diving in, keep in mind that the Self Visa and Discover it Secured have exorbitant interest rates – the Self Visa has a variable APR of 24.24% and the Discover it Secured has a variable APR of 24, 49%. So, if you plan to carry your balance from month to month, you should try to find a cheaper solution.
|welcome bonus||N / A||Discover will match the cashback you earned at the end of your first year|
|Reward rate||N / A||2% cash back at gas stations and restaurants (up to $1,000 in combined purchases per quarter, then 1%); 1% cash back on all other purchases|
|Introduction AVR||N / A||10.99% for 6 months, then a variable APR of 24.49%; transfers must be credited to your account before November 10, 2022|
|Annual subscription||$25||N / A|
Self Visa vs Discover it Secured Highlights
Welcome bonus winner: find out in complete safety
The Self Visa does not include a welcome offer, so the Discover it Secured wins in this category. Although not an initial bonus, Discover will match any cashback you earn at the end of your first year. For example, if you earn $100 in the first 12 months of card membership, you’ll receive an additional $100 from Discover at the end of the year, for a total of $200 in cash back.
Reward Rate Winner: Find Out Safely
The Discover it Secured offers 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases per quarter, then 1% back) and 1% back on all other purchases . In comparison, the Self Visa does not offer a cash back program.
Winner of the annual fee: find out in complete safety
The Discover it Secured has no annual fee while the Self Visa has an annual fee of $25.
Foreign Transaction Fee Earner: Find Out Safely
Technically speaking, none of the cards charge foreign transaction fees, but the Self Visa cannot be used outside the United States anyway. Since the Discover it Secured can be used abroad, it wins in this category. However, note that Discover’s acceptance outside the United States may be more limited than Visa or Mastercard, depending on where you are traveling.
Which card pays the most?
The Discover it Secured has a cashback program unlike the Self Visa, so the Discover it Secured will inevitably earn more.
Self Visa vs Discover it Safe Spending Example
Maximizing your 2% Cash Back at Gas Stations and Restaurants every quarter is not that difficult, if you remember that many Gas Stations also sell food and household items, and meals at takeout and food delivery are also eligible. So if you can spend $1,000 per quarter in these two categories, you’ll earn $80 per year in cash back. Discover will match that cashback at the end of the first year, so you’ll get $160.
Also, keep in mind that the unlimited 1% cash back on all purchases will also be matched, which is equivalent to earning 2% cash back on all non-bonus purchases for the first year. If you spend $1,000 per month in 1% categories – in addition to maxing out your 2% bonus categories – you will earn $120 in cash back, which will be $240 at the end of the year with Discover’s Cashback Match. Then add your $160 cash back and your $240 cash back and you’ll have a total cash back of $400 at the end of the first year, which isn’t bad at all.
Why should you get the Self Visa?
The main appeal of the Self Visa is that it combines an installment loan with a revolving credit card account and reports your progress to the three major credit bureaus: Equifax, Experian and TransUnion. Credit scoring, FICO, and VantageScore formulas love seeing that you can responsibly manage both types of accounts. This healthy mix of an installment loan and a revolving account is a minor factor, but it can help boost your FICO score. In other words, if you need all the help in the world to boost your credit score a little faster, the Self Visa can be invaluable and well worth the extra cost.
Additionally, the Self Visa does not require a cash deposit to start, while the Discover it Secured requires a cash deposit of at least $200.
The Self Visa Certificate of Deposit* (CD) earns interest
While that’s not an impressive factor, especially since Self charges interest for your credit builder loan (which, unlike credit card interest, you can’t avoid), earning something is better than gaining nothing.
Basic visa benefits
The Self Visa offers only the basic Visa benefits, which include reporting lost or stolen cards, cardholder inquiry service, emergency card replacement and cash disbursement, liability zero for unauthorized purchases, on-use curbside shipping and ID Navigator Powered by NortonLifeLock.
Since the Self Visa does not have a rewards program, there are no redemption options.
Recommended credit score
No credit history is required to apply for the Self Visa.
Why should you get Discover it Secured?
As mentioned, credit composition is only a minor factor in credit score formulas. So, if you’re not particularly in a rush, using Discover it Secured will save you a lot of money compared to the Self Visa. You’ll also get cash back on all purchases. Additionally, you may qualify for an unsecured card with Discover after seven months of timely payments. In this case, your cash deposit will be returned to you.
Discover will monitor your Experian credit file and alert you to any changes. Moreover, it will monitor thousands of dark websites and let you know if it finds your social security number. Discover will also scan 10 selected people search sites for your personal information and submit opt-out requests on your behalf. Plus, you’ll have access to your FICO credit score and late payment discount on your first late payment (then up to $41).
The easiest way to redeem cash back is to apply it to your credit card bill as a statement credit. However, there are also other redemption options. You can deposit your money in your bank account, use it on Amazon or with PayPal, redeem it for gift cards or donate to charity. Whatever you do, know that your Discover Cash Back never expires.
Recommended credit score
No credit history is required to apply for the Discover it Secured credit card.
The bottom line
While the Self Credit Builder Account with Secured Visa and the Discover it Secured Credit Card can be great tools for consumers trying to establish or rebuild their credit, Discover it Secured has three major advantages over its competitor : fee, it has a strong cash back program and offers valuable protection benefits. That said, the Self Visa can give you an edge if you need to speed things up, as the Self Visa offers two products in one: an installment loan and a revolving credit card account. This healthy mix of accounts can play a role in boosting your score.
In other words, if you’re not particularly in a rush and don’t mind posting at least $200 as collateral, take a closer look at Discover it Secured. If your priority is to get as much help as possible to speed up your credit recovery, check out the Self Visa. However, keep in mind that every credit consumer and their situation is different, so no one can say for sure that one product will help you more than another. Of course, there are more credit cards available, so be sure to take a look at other secured cards or cards for bad credit before making a decision.
*All credit builder accounts created by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, NA Member FDIC, Equal Housing Lender or Atlantic Capital Bank, NA Member FDIC, Equal Housing Lender. Subject to identity verification. Individual borrowers must be US citizens or permanent residents and be at least 18 years old. A valid bank account and social security number are required. All loans are subject to identity verification and consumer report review and approval. Results are not guaranteed. Improving your credit rating depends on your particular circumstances and financial behavior. Failure to make the minimum monthly payments by the payment due date each month may result in delinquent payment reports to credit bureaus, which may negatively impact your credit score. This product will not remove negative credit history from your credit file. All loans are subject to approval. All Certificates of Deposit (CDs) are deposited with Lead Bank, Member FDIC, Sunrise Banks, NA, Member FDIC or Atlantic Capital Bank, NA, Member FDIC.