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Comment by Someone1234 | Hacker News Reader

This is legitimately a useful service for those who need it. The status quo has created a unintended "chicken & egg" problem wherein people need ok credit in order to start building good credit.

This acts as an escape hatch allowing people to build up their bad credit up to a point where they'd qualify for normal credit cards.

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There are already dozens of secured credit cards for the credit-challenged: https://www.creditcards.com/secured/

The 5% back on Amazon.com purchases would give a slight edge to this new secured card.

5% back on only Amazon with a $120 annual fee (prime) is not very good.

Most secured cards have no rewards and many have a yearly fee. If you have prime anyways it's an amazing deal.

Sure, if you weren't otherwise gonna get Prime, you'd have to spend $2400/year to break even. If you're one of Amazon's millions of Prime subscribers, it's a no-brainer.

The target demographic might overlap with the set of people who are candidates for discounted prime membership.

Plus 28% APR, though I can't imagine holding a balance on a secured card.

Secured cards are held by irresponsible people who carry balances. Otherwise they would get unsecured cards.

Holding a balance does not mean you're irresponsible, it just means you will be paying interest.

Are there any other secured CCs which would have similar benefits?

If you buy anything on Amazon, but don't have a CC this may be better than 1% back.

CreditCards.com does a great job comparing different cards, and if I was in a credit-challenged situation I would go for the Discover It Secured card, which offers 2% back on all purchases.

The downside to that is that Discover is accepted at significantly fewer online vendors and retailers than Visa or Mastercard.

Futurama S1E06:

Fry: "Do you take Visa?"

Clerk: "Visa hasn't existed for five hundred years."

Fry: "American Express?"

Clerk: "Six hundred years."

Fry: "Discover Card?"

Clerk: "Hmm...sorry, we don't take Discover."

In many cases you may be able to obtain a secured line of credit from one of your local credit unions if you’re the type who likes keeping your money local. They tend to be more amenable to helping their members with credit rebuilding goals.

That was the path I took, but as with all things ymmv

Discover IT Secured is a great option.

https://www.discover.com/credit-cards/secured/

>Earn 2% Cash Back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases

I hear it auto-converts to a regular, non-secured Discover IT after like six months or so.

This would only be worth it if you pay it off each month, as it has an insanely high interest rate of 28.24%- you can get a secured Discover card at 25.24% or 21.24% with Wells Fargo. You can do even better if you do with a credit union- DCU has secured cards around 13.75%.

Yeah, I was in that bizarre limbo for a while, where annualcreditreport.com and all the other sites would swear up and down that I have a ~730 score, all while I had no debts, but everyone classed me a subprime because I didn't have a credit history.

Even knowing that you can fix it, it's really bizarre that having e.g. utility bills -- which are extending credit to you -- count nothing towards a credit history ... but it does add to your credit history when you simply move your ordinary purchases onto a card that you pay off every month. Huh?

Edit: Reword for clarity.

It's a system created towards incentivizing people to use credit for the purposes of capturing all users. This maximizes the number of users that mismanage their finances and pay interest on the credit usage.

Student loans with no missed payments count, even if you haven't had to make payments yet. Very helpful when I was starting out. I'd been getting preapproved offers in the mail throughout the last half or so of college and finally went with one once I had income.

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