It does sound like a fault, and possibly hardware. A factory reset would be part of any repair, so it won't hurt to try that yourself - make sure you've backed up your content first. Remove the card as the process sometimes formats them.
Do you have a card reader so that you can check the card directly in a PC? My first thought was that it could be a card fault, but if it happens with two different ones, that's less likely. What size is the second card you tried? - some phones have trouble with ones larger than 32gb, so it's worth eliminating that possibility.
If you can check the card in a PC, try formatting it there too, just in case that gets it recognised. If all this fails, I think a repair is the route to take. Your phone has a two year guarantee (you'll need proof of purchase).
