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Good News for Cardholders: Discover It Secured Card Updates Terms

[Wednesday, December 21st, 2016]

Consumers trying to establish or rebuild credit will be glad to know that Discover it has updated their terms to make it easier for folks to get an unsecured credit card faster.

The Discover it Secured card, which is specifically designed for folks with poor or fair credit who are unable to be approved for an unsecured credit card, will now begin reviewing account holders for eligibility to transition to an unsecured line of credit after seven months, rather than a whole year.

This means people can have a regular, unsecured credit card much faster than they previously could. Being approved for an unsecured credit card is an important step on the road to good credit; a secured credit card is generally a sign that you aren’t able to get another type of credit card and are working to rehabilitate your credit score.

The role of secured credit cards

When you don’t have a credit history at all, or have a poor credit score, you may not be able to get a regular consumer credit card. That’s because credit issuers don’t have any guarantee that you’re a good risk for credit; they don’t know if you’ll pay back the loan. A secured card lets you put down a lump sum as a deposit, or collateral, so the bank is protected in case of default on your part. They keep this deposit, and you pay your credit card balance off each month. Then when you transition to an unsecured account, they give back your deposit.

The important thing about secured credit cards is that they report to credit bureaus, so your credit history can improve when you use your secured card in a responsible manner. Before, it took a year of good use of your Discover it Secured card before they would review your account to see if you were eligible for an unsecured card. But now, they will review your account after only seven months.

Discover’s Jerry Young says the company made the change after receiving feedback from customers. “This change means that with responsible credit management, cardmembers can now receive their security deposit back sooner and take that next step toward building or rebuilding their credit by graduating to an unsecured line of credit.”

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