Aspect Details
Topic Upgrading a Discover it Secured Card to an Unsecured Card
Who it’s for Individuals with a Discover it Secured Card looking to transition to an unsecured credit product, especially those building or rebuilding credit.
Key Criteria for Upgrade Consistent on-time payments, low credit utilization (ideally below 30%), responsible account management for typically 7-8 months.
Typical Timeline Discover generally initiates automatic reviews after 7 months of account opening.
Bottom Line Discover offers a clear, often automatic, path to an unsecured card and a security deposit refund, making it a strong choice for credit building.

Your path to an unsecured Discover it card

Upgrading your Discover it Secured Card to an unsecured version is usually an automatic process driven by your responsible credit behavior. Discover is unique among secured card issuers for its transparent path to an unsecured card and the return of your security deposit, making it a reliable tool for credit building.

Comparing Discover it Secured and unsecured cards

Option Best for Real cost The catch
1. Discover’s Automatic Review Cardholders with consistent on-time payments and low utilization aiming for a seamless transition. No direct cost; security deposit refunded. Requires patience (typically 7-8 months minimum); upgrade isn’t guaranteed.
2. Applying for a New Discover Unsecured Card Those who want a specific Discover card (e.g., Discover it Cash Back) or haven’t been automatically upgraded after a year. Potential temporary credit score dip from hard inquiry. Approval depends on your current credit score and history; may not be approved for the best cards.
3. Applying for an Unsecured Card from Another Issuer Individuals seeking different rewards, benefits, or a higher credit limit than Discover offers post-upgrade. Potential temporary credit score dip from hard inquiry. Requires careful research to find a suitable card; may not be approved if credit is still developing.

What your Discover it card choices mean

1. Discover’s Automatic Review

Discover is known for its relatively straightforward path from a secured card to an unsecured one. The company periodically reviews your account for upgrade eligibility, typically starting around seven months after you open the card. During this review, Discover assesses your payment history, credit utilization, and overall financial behavior. If you’ve consistently paid on time, kept your balances low (ideally under 30% of your credit limit), and avoided any negative marks, you stand a good chance of being upgraded. Once approved, Discover converts your secured card into an unsecured one, often with a higher credit limit, and refunds your security deposit.

Watch-out: This process is entirely at Discover’s discretion. There’s no way to directly request an early review or force an upgrade.

2. Applying for a New Discover Unsecured Card

If you’ve had your Discover it Secured Card for a while (say, over a year) and haven’t received an automatic upgrade, or if you’re looking for a different type of Discover card (like the Discover it Cash Back with rotating bonus categories), you can apply for a new unsecured Discover product. This involves a new credit application, which will result in a hard inquiry on your credit report. A hard inquiry can temporarily lower your credit score by a few points for a short period, typically a year. However, if your credit has improved significantly since you opened the secured card, you might qualify for a more rewarding unsecured option.

Watch-out: Applying for a new card means you’ll need to meet the eligibility requirements for that specific product. There’s no guarantee of approval, and a denial could be disappointing after building credit.

3. Applying for an Unsecured Card from Another Issuer

Sometimes, the best path forward isn’t with Discover at all. After responsibly managing your Discover it Secured Card for a year or more, your credit score might be strong enough to qualify for unsecured cards from other major issuers like Capital One, Chase, or American Express. This approach allows you to explore a wider range of card benefits, reward programs, and potentially higher credit limits. For example, you might qualify for an entry-level travel rewards card or a cash back card with a sign-up bonus. Just like applying for a new Discover card, this will involve a hard inquiry on your credit report.

Watch-out: Research is critical here. Different issuers have different underwriting standards. Make sure to check pre-qualification tools (if available) before formally applying to minimize the risk of a denial and unnecessary hard inquiries.

When to keep or upgrade your Discover it

If you’ve consistently made on-time payments and kept your credit utilization low for at least seven months, sticking with Discover’s Automatic Review is often the easiest and most advisable path. You don’t have to do anything but continue your good habits, and your security deposit will be returned without needing a new application. This is the least disruptive option for your credit profile.

But if you’ve been a responsible cardholder for over a year and Discover still hasn’t upgraded your account, or if you’re specifically eyeing a different Discover product with better rewards, then Applying for a New Discover Unsecured Card makes sense. You’ll already have a relationship with Discover, which can sometimes be a slight advantage, and you can potentially get a card better suited to your spending habits. Just be prepared for the temporary credit score dip from the hard inquiry.

Consider Applying for an Unsecured Card from Another Issuer when your credit score has comfortably moved into the “good” range (typically FICO scores above 670), and you’re looking for specific benefits that Discover doesn’t offer. Maybe you want a card with no foreign transaction fees, or a robust travel rewards program, or a higher starting credit limit than your upgraded Discover card might provide. This strategy lets you diversify your credit relationships and potentially access premium benefits, but it requires diligent research into other issuers’ offerings and approval odds.

One wrinkle: If you need a significantly higher credit limit immediately for an upcoming expense and your current Discover secured limit is, say, only $500, waiting for an automatic upgrade might not be fast enough. In that case, exploring a new unsecured card, either from Discover or another issuer, could be a faster route, assuming your credit profile supports it.

FAQ

Q: How long does it typically take for Discover to upgrade a secured card to unsecured?

Discover generally begins reviewing accounts for upgrade eligibility around 7 to 8 months after the account is opened. However, some cardholders report it can take up to 12 months or even longer in some cases, depending on their individual credit history and payment behavior. The process is not instant.

Q: What factors does Discover consider for an upgrade?

Discover primarily looks at your payment history, ensuring you’ve made all payments on time. They also consider your credit utilization ratio (how much credit you use compared to your limit), aiming for it to be low, ideally below 30%. Other factors include your overall credit report, any changes in your income, and the length of your credit history.

Q: Can I request an upgrade from Discover?

No, Discover does not allow cardholders to directly request an upgrade from their secured card to an unsecured one. The process is automatic, initiated by Discover based on their internal review schedule and your account performance. Your best course of action is to continue managing your card responsibly.

Q: What happens to my security deposit when my card is upgraded?

Once your Discover it Secured Card is successfully upgraded to an unsecured card, your security deposit is fully refunded. This refund is typically issued as a statement credit to your account or as a direct deposit to your bank account, usually within a few business days or weeks after the upgrade is finalized.

Q: Will upgrading my card affect my credit score?

When Discover automatically upgrades your secured card, it generally does not result in a new hard inquiry, so there’s no immediate negative impact on your credit score. In fact, getting your security deposit back and potentially receiving a higher credit limit can positively impact your credit utilization ratio, which can help your score over time. If you apply for a new card, however, that will result in a hard inquiry.

Q: What if Discover doesn’t upgrade my card after a year?

If Discover hasn’t upgraded your card after a year or more, it’s worth reviewing your credit report for any issues. You can also consider applying for a new unsecured card, either from Discover or another issuer, if your credit score has improved. Alternatively, you can continue using your Discover it Secured Card responsibly, as reviews are ongoing, or contact Discover customer service to understand specific factors affecting your account, though they may not disclose exact criteria.

Q: Does my card number change after an upgrade?

In most cases, when Discover upgrades your secured card to an unsecured one, your card number, expiration date, and security code remain the same. This means you won’t need to update your card information with recurring billers, making the transition quite smooth.

Q: Are there other secured cards that offer a path to unsecured status?

Yes, other issuers like Capital One also offer secured cards with a path to unsecured status, though their specific review processes and timelines may differ from Discover’s. For instance, Capital One’s Platinum Secured Card also offers reviews for deposit refunds and upgrades. It’s always wise to check the terms of any secured card you consider if an upgrade path is a priority.

References