Can a Secured Credit Card Help You Earn Free Travel?

PHOTO: Starting with a secured credit card may be just the ticket for certain rewards-coveting travelers. (photo via Flickr/kuhnmi)

If you’re angling to get into the travel rewards game but your credit history is questionable at best, a secured credit card might be the only type of card you can qualify for at first. 

Unlike unsecured credit cards that don’t require a cash deposit as collateral, secured cards require you to put down a deposit to get started. Generally speaking, if you put down a cash deposit of $500, you’ll receive a credit limit of around $500 right away.

How a Secured Credit Card Can Help You Score Free Travel

While it might seem counterproductive to put down a cash deposit to earn a line of credit of a similar amount, secured credit cards can help you build your credit so you can get a better, unsecured rewards credit card in the future. 

This is because secured cards work similarly to unsecured cards in the fact that your responsible credit use is reported to the three credit reporting agencies–Experian, Equifax, and TransUnion.

Sign up for a secured credit card, put down a cash deposit, then build credit through responsible credit use. It’s as simple as that. If you can’t qualify for an unsecured credit card on your own, this could be your only option at first. 

The One Secured Card that Offers Rewards

While secured credit cards were created to help people repair or build their credit, one secured credit card does offer cash rewards you can use for anything you want, including travel.

With the Discover it Secured Credit Card, you will earn 2 percent cash back on your first $1,000 in combined restaurant and gas station purchases each quarter. You’ll also get 1 percent cash back on every other purchase you make.

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Another perk that helps this card stand out is the fact that it doesn’t charge an annual fee or an application fee (or any other hidden fees). 

As an added bonus, Discover promises to double the amount of cash back you earn during your first 12 months as a cardholder.

Lastly, Discover can actually help you monitor your credit progress over time. They do this by offering a free FICO credit score on your monthly statement and by offering free alerts when someone uses your social security number to sign up for services with thousands of websites around the web.

The Bottom Line

If your credit isn’t great but you want to earn travel rewards, you are mostly out of luck. The best thing you can do for yourself and your credit is to figure out ways to improve your credit score over time. 

While paying your bills on time and resolving debts in collections are smart first moves, a secured credit card can also help you build a history of responsible credit use.

With that in mind, one of the best-secured credit cards on the market is the Discover it Secured Credit Card. Not only does it come without an annual fee or application fee like many other secured cards, but it offers cash back rewards you can use however you want. 

Over time, you can (hopefully) build your credit enough to qualify for the top travel credit cards in the future. At the very least, you’ll put yourself on the path to improve your credit health.