4 Debit Cards to Help Build Your Credit
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A credit-building debit card allows you to build credit without going into debt. While prepaid cards and bank debit cards typically don’t help you build credit, we found a few gems that can make it happen. Here’s a list of debit cards to help you build a better credit score.
4 Debit Cards for Building Credit
These four debit cards report to one or more credit bureaus to help you build a solid credit score.
Sesame Cash
Here’s how it works. Open a Sesame Cash Account and fund your account. Next, turn on the credit builder feature and choose how much money you want to send to your virtual line of credit from your cash account. Then set the credit utilization rate you want Sesame Cash to report to the credit bureaus. For example, if you deposit $500 to your line of credit and set your credit utilization rate to 20%, Sesame Cash can report up to $100 in purchases to the credit bureaus.
Sesame Cash chooses the debit purchases they’ll use toward your credit building and pays them on time. Then Sesame Cash reports the on-time payments to the credit bureaus to help you build a credit score. There’s no monthly charge and no interest on the debit card.
Cost: Free
Does Sesame Cash really work? We scoured Reddit to read more about the user experience, but there isn’t much discussion about Sesame Cash. We do like the fact that Sesame Cash doesn’t charge fees and reports to all three credit bureaus. Because it’s free, it’s worth trying out and monitoring your credit score to see if it improves after a few months of use.
Our verdict: Sesame Cash is a good option for those looking for a free way to build their credit.
Fizz
You get a credit line equal to a portion of your linked bank account balance. Each time you use your Fizz card at a store or pay a bill, they spot the cost. When you turn on the autopay option, Fizz repays themselves from your linked bank account the next day. Depending on your purchases, you can also earn rewards. There are no fees and no interest charged.
Your purchases are reported to all three credit bureaus to help you start building credit while you’re still in college. This way, when you graduate, you’ll have an established credit history.
Cost: Free
Does Fizz really work? It’s hard to say because if you want to try Fizz, you’ll have to join a waitlist. If you still want to give it a try, you can click the waitlist button on the website and leave your university email address.
Our verdict: Fizz sounds like a promising option for students, and we like that it’s free. But since there’s still a waitlist and limited information out there about the card, we’ll have to wait and see if it’s a good product.
Zoro
Your card acts just like a debit card, allowing you to increase or decrease your balance with purchases and deposits. There’s no credit check, and you’ll get instant approval.
However, Zoro’s terms indicate there is a monthly fee to use the card though it doesn’t say what the fee is. We sent an email to Zoro to ask how much it costs. A few minutes later someone from Zoro replied and confirmed there is a monthly fee of $7. You’ll also have to connect your bank account to Zoro and authorize the monthly fee to be debited from your bank account.
Cost: $7/month
Does Zoro really work? There was some interest in this card on Reddit four years ago when Zoro offered early access. The top post indicates that they started onboarding customers about five months ago. On the App Store, Zoro is split between users who love it and users who say they can’t get it to work. The responses from Zoro indicate there may still be some bugs or technical issues that some users are experiencing.
Our verdict: Zoro Card is still early access, and the $7 monthly fee is expensive. We also don’t like that we had to do some hunting to find out the cost. So we suggest a more affordable or free option like Sesame Cash.
Extra Card
Extra Card calls their credit limit “Spend Power.” Most customers start with a small limit but work their way up with responsible use.
Cost: Extra Card offers two subscription options; both are currently 25% off. You can pay $149 (regularly $200) a year for a basic card or $199 (regularly $265) a year for a debit card with reward points for each purchase that you can use in the Extra Rewards Store.
Does Extra Card really work? Reddit users report this is a legitimate way to build your credit score. Users in the Apple app store also give it a high 4.5 rating.
Our Verdict: Extra Card is best for people with bad credit scores or with no or limited credit history. However, it is pricey. You want to keep an eye on your credit score if you decide to use Extra Card and only keep it until you’ve built your score.
The Aligned Company d/b/a Extra (“Extra”) is a technology company, not a bank. Banking services provided by and the Extra Mastercard Debit Card is issued by Evolve Bank & Trust, Member FDIC (“Issuing Bank”), pursuant to a license from Mastercard USA. Cardholders must be at least 18 years old and a citizen of the United States, or a permanent resident with a valid social security number (SSN) or ITIN. Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who applies for an Extra Debit Card. Your eligibility for the Extra Debit Card is the decision of the Issuing Bank.
¹All transaction and account activity is subject to review and approval by both Extra and the Issuing Bank. Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Extra is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including the financial decisions you make with other financial services organizations. The Extra Debit Card and related services will not remove negative credit history from your credit report. Extra will report your activities to Experian® and Equifax®. Please refer to our Terms of Service and Cardholder Agreement for additional details. Pricing and rewards availability will vary depending on plan and term selected.
²In order to transact with your Extra Debit Card, you must have an active, Plaid-compatible bank account linked to Extra’s services (“Partner Account”). In the event your Partner Account is disconnected from Extra services for any reason, you will not be able to use your Extra Debit Card. Within 30 days of the date of each transaction made using your Extra Debit Card, Extra will initiate one or more ACH debits to deduct equivalent funds from your Partner Account. These ACH debits typically deduct funds from your Partner Account within 2 to 3 business days after initiation by Extra. You are responsible for keeping track of your available Partner Account balance. If the ACH debit is successful, Extra will report positive payment history to the credit bureaus. If the ACH debit fails and remains unpaid for 30 or more days as of the last day of the month, Extra may report negative payment information to the credit bureaus.
Why Use a Debit Card to Build Credit?
A solid credit history can help you get the best rates and terms on future loans and the lowest premiums on insurance products. But building credit usually requires you to get into debt. For example, if you open a credit card to build credit and don’t pay your balance in full every month, it accrues interest.
When you use one of these debit cards to build credit, though, you can only spend what you have in your account. So there’s no risk of getting into debt.
Debit Cards vs. Credit Cards
A debit card links to your checking account. It usually has the Visa or Mastercard logo on it, and you can use it anywhere Visa or Mastercard is accepted. You don’t have a credit line or interest with a debit card. Instead, the money to pay for your purchases comes from your checking account.
A credit card isn’t linked to your checking account. It’s a separate credit line that you can spend. You can charge up to the total limit (which isn’t recommended), and you must pay the balance back. You’re obligated to make the minimum payment each month, and if you don’t pay the balance in full, your balance will incur interest.
Other Options for Building Credit
A credit-building debit card can be one way to build credit, but there are a few other options to help you build an even stronger credit history.
Secured Chime Credit Builder Visa® Credit Card
The Chime Credit Builder Secured Visa ® Credit Card is another way to build credit.1 There’s no annual fee or interest2, and your credit line is equal to the money you move to your credit-builder account. You can use your Chime® card for purchases anywhere Visa is accepted. The money you move to your Credit Builder account is used to pay your balance so that Chime can report on-time payments to the credit bureaus.3
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC. The Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.
1 To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
2 Out-of-network ATM withdrawal fees apply except at MoneyPass ATMs in a 7-Eleven location or any Allpoint or Visa Plus Alliance ATM.
3 On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
Grain
Grain is a credit-builder account that works with your existing debit card. Once you sign up and connect your checking account, they’ll pre-approve you for a credit line that they choose based on your income and spending habits.
Grain transfers the credit line to your checking account and sets up automatic minimum payments of 10% of the credit line. Interest accrues on the amount borrowed, but you can choose to pay the full balance back to avoid interest charges. You’ll pay a 15% APR on all charges and a 1% fee for each withdrawal.
Capital One Platinum Secured
The Capital One Platinum Secured Credit Card is a credit card with a security balance. Unlike most secured credit cards, though, Capital One may allow a security deposit of $49 – $200 for a $200 credit line. There are no hidden fees, and with proper use, you can get upgraded to an unsecured credit card or a higher credit line after just six months of use.
Experian Boost
Experian Boost is a way to boost your credit score for free. It’s not a credit line or even a credit card. Instead, it’s a service Experian offers to log on-time payments when you pay for bills including your cell phone or streaming services.
You link your checking account to Experian Boost, and they track the payments for phone, utility, and streaming payments. If you make your payments on time, your Experian credit score benefits.
LevelCredit
If you don’t have any credit, LevelCredit can help you build it by reporting payments including utilities, rent, and cell phone bills to the credit bureaus. You’ll pay a monthly subscription cost of $6.95/month and build credit naturally using the bills you already have rather than racking up new debt. You also can add up to 24 months of past bill payments to your credit score for a one-time fee of $49.95.
FAQs
How long does it take to improve your credit score?
Your credit score won’t improve overnight or even in one month. It can take several months of consistent on-time payments and good credit history to improve your credit score.
What is the best way to raise your credit score?
Your payment history and credit utilization are the two largest parts of your credit score. To increase your credit score, pay your bills on time and keep your credit utilization (comparing your outstanding debt to your credit lines) to less than 30%.
What is the fastest way to build credit?
The fastest way to build credit is to make your payments on time to existing credit lines. If you don’t have existing credit lines, you can open a secured credit card, a credit-building debit card, or even become an authorized user on a family member or friend’s credit card. The key is to have a timely payment history and not go over 30% of your credit utilization rate for the best results.
Final Thoughts
Using a credit-building debit card can be a great way to build credit without the risk of getting into debt. With proper use of your credit line and timely payments, you can build up your credit score without paying interest in some cases. Just watch out as some products charge a subscription fee or require a security deposit to help you build a credit score.
You can use one of these products until you’ve reached a score high enough to access a good credit card. Then when you do get that credit card, pay your bills on time and pay your balance off each month. Practicing these habits will continue to help improve your score.
