Traditionally, debit and prepaid cards don’t build credit history. But if you don’t want to go with a traditional credit card to improve your credit, there are unique secured card options to check out.
What are prepaid credit cards?
We don’t want to get too bogged down in semantics, but technically, prepaid credit cards don’t exist. Prepaid cards are just reloadable cards that are not tied to a line of credit so they can’t build credit history.
But hold up — there are secured cards that function similarly to debit and prepaid cards that can build credit history.
Some fintechs, like Chime, Extra and Cleo, offer secured credit cards that function a lot like prepaid cards that report payments to credit bureaus. These cards are unique because they often don’t have interest charges and often skip the hard credit check, making them solid options for people new to credit cards or credit building.
These “prepaid credit cards” or “debit-credit cards” don’t charge interest because they require you to pay off your balance every month. Typically, they’re linked to an external bank account, so these cards allow you to borrow up to your linked account balance, and then repaid from your account balance. Payments are reported to the credit bureaus, helping you build a credit history.
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. Credit builder: To apply for Credit Builder, you must have an active Chime® Checking Account. Security deposit: Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. No interest: *Out-of-network ATM withdrawal and OTC advance fees may apply. View the Bancorp agreement or Stride agreement for details; see back of card for issuer.
Step is a mobile banking app with a free credit-building secured card. It builds credit by automatically paying off balances from your Step deposit account and reporting them to the bureaus, with no credit check, APR or monthly fees. You can only spend what’s in your account. Minors can use Step too; once they turn 18 and opt in, their last two years of account activity gets reported to the credit bureaus.
APY
4.00%
Fee
$0 per month
Minimum deposit to open
$0
Step is a mobile banking app with a free credit-building secured card. It builds credit by automatically paying off balances from your Step deposit account and reporting them to the bureaus, with no credit check, APR or monthly fees. You can only spend what’s in your account. Minors can use Step too; once they turn 18 and opt in, their last two years of account activity gets reported to the credit bureaus.
Current is a fintech partnered with Choice Financial Group and Cross River Bank. Its Build card is a secured, credit-building charge card linked to your Current account, with your spending limit based on your deposits. Payments are reported to TransUnion to help build credit. There’s no credit check, interest or annual fee, but a 3% fee applies for late payments.
APY
4.00%
Fee
$0 per month
Minimum deposit to open
$0
Current is a fintech partnered with Choice Financial Group and Cross River Bank. Its Build card is a secured, credit-building charge card linked to your Current account, with your spending limit based on your deposits. Payments are reported to TransUnion to help build credit. There’s no credit check, interest or annual fee, but a 3% fee applies for late payments.
Varo, an FDIC-insured online bank, offers the Varo Believe card to help build credit. There’s no interest, monthly fees or hard credit pull. You fund a Varo Believe Secured Account, which sets your spending limit. With Varo SafePay on, your purchases are automatically covered using these funds, and payments are reported to all three credit bureaus. Any unused funds roll over to the next cycle. While there’s no APR or fees, you’ll need a Varo Bank Account to move money into the Believe Secured Account.
Fee
$0 per month
Minimum deposit to open
$0
Varo, an FDIC-insured online bank, offers the Varo Believe card to help build credit. There’s no interest, monthly fees or hard credit pull. You fund a Varo Believe Secured Account, which sets your spending limit. With Varo SafePay on, your purchases are automatically covered using these funds, and payments are reported to all three credit bureaus. Any unused funds roll over to the next cycle. While there’s no APR or fees, you’ll need a Varo Bank Account to move money into the Believe Secured Account.
Pros
Reports to all three credit bureaus
No APR and no monthly fees
No hard credit pull
Cons
Requires Varo Bank Account
Up to $2,500 purchases per day
Up to $1,000 for cash advances
Annual Percentage Yield (APY)
N/A
Intro or bonus offer
Existing and new customers get a $25 referral bonus when signing up for a Varo Bank account. T&C apply.
Rewards
Get up to 6% Cashback when you use your card with select brands
Chime is a fintech company with banking services through its partners, The Bancorp Bank, N.A. and Stride Bank, N.A. Chime offers a Credit Builder secured card with no credit check, annual fees or APR. You set your spending limit by transferring money from your Chime Checking account, and payments are reported to all three credit bureaus. To qualify, you need a Chime Checking Account.
Fee
$0 per month
Minimum deposit to open
$0
Chime is a fintech company with banking services through its partners, The Bancorp Bank, N.A. and Stride Bank, N.A. Chime offers a Credit Builder secured card with no credit check, annual fees or APR. You set your spending limit by transferring money from your Chime Checking account, and payments are reported to all three credit bureaus. To qualify, you need a Chime Checking Account.
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. Credit builder: To apply for Credit Builder, you must have an active Chime® Checking Account. Security deposit: Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. No interest: *Out-of-network ATM withdrawal and OTC advance fees may apply. View the Bancorp agreement or Stride agreement for details; see back of card for issuer.
The fintech Extra offers a credit-building debit card that links to your existing bank account, with spending limits based on your balance. When you make a purchase, Extra fronts the money and pays itself back the next day. At the end of the month, it reports transactions to Experian and Equifax to build credit. You'll choose between two plans: Credit Building and Credit Building + Rewards, costing between $149 to $199 annually or $20 to $25 monthly.
Fee
From $20 per month
Minimum deposit to open
$0
The fintech Extra offers a credit-building debit card that links to your existing bank account, with spending limits based on your balance. When you make a purchase, Extra fronts the money and pays itself back the next day. At the end of the month, it reports transactions to Experian and Equifax to build credit. You'll choose between two plans: Credit Building and Credit Building + Rewards, costing between $149 to $199 annually or $20 to $25 monthly.
Pros
No credit check and no APR
No opening deposit requirement
Reports to Experian and Equifax
Cons
Fees range from $149 to $199 annually or $20 to $25 monthly.
The Extra Debit Card is issued by Evolve Bank & Trust or Patriot Bank N.A. (Member FDIC), pursuant to a license by Mastercard International. Line of credit provided by Lead Bank. Extra is responsible for credit reporting and reports on time and late payments, which may impact a credit bureau’s determination of your credit score. Rewards points only available with rewards plan.
Cleo is a financial app with its Credit Builder Card, requiring as little as $1 as an opening deposit to set your spending limit. There’s no credit check, no interest (balance repaid monthly) and Cleo reports to all three credit bureaus. For $14.99 per month, the Credit Builder membership includes cash advances, cashback rewards and an AI chatbot to keep tabs on your spending. But compared to others on this list, Cleo's credit-building card is more expensive.
Fee
$14.99 per month
Minimum deposit to open
$1
Cleo is a financial app with its Credit Builder Card, requiring as little as $1 as an opening deposit to set your spending limit. There’s no credit check, no interest (balance repaid monthly) and Cleo reports to all three credit bureaus. For $14.99 per month, the Credit Builder membership includes cash advances, cashback rewards and an AI chatbot to keep tabs on your spending. But compared to others on this list, Cleo's credit-building card is more expensive.
The Fizz debit card can help build your credit score with no APR or credit check, though it does have an annual fee — $49.99 for students and $119.99 for non-students. While designed with college students in mind, it’s open to everyone. The card links to your bank account, adjusting your spending limit daily based on your balance, and automatically repays the outstanding balance from your account. Fizz reports payments to all three major credit bureaus. Fizz also offers cashback rewards, and you can transfer rewards to your bank once you reach $5 by spending with participating merchants.
APY
N/A
Fee
From $4.17 per month
Minimum deposit to open
$150
The Fizz debit card can help build your credit score with no APR or credit check, though it does have an annual fee — $49.99 for students and $119.99 for non-students. While designed with college students in mind, it’s open to everyone. The card links to your bank account, adjusting your spending limit daily based on your balance, and automatically repays the outstanding balance from your account. Fizz reports payments to all three major credit bureaus. Fizz also offers cashback rewards, and you can transfer rewards to your bank once you reach $5 by spending with participating merchants.
Pros
No credit check or APR
Balance repaid automatically
Cashback rewards program
Reports to all three major credit bureaus
Cons
Requires iPhone with iOS 12.0 or later
Requires existing bank account with at least $150
Annual fee of $49.99 or $119.99
Annual Percentage Yield (APY)
N/A
Intro or bonus offer
Earn 1,000 points ($10 value) when you download the Fizz app and enter code FINDER.
Experian’s digital account, Experian Smart Money, is offered with its FDIC-insured partner, Community Federal Savings Bank. There are no monthly fees, and it works with Experian Boost® to add non-reported payments (like rent and utilities) to your credit file. Using the debit card for eligible bills can build credit history, and other perks include 55,000 free ATMs, early direct deposits, and both virtual and physical debit cards. An Experian membership is required, but there's a no-fee option.
Fee
$0 per month
Minimum deposit to open
$0
Experian’s digital account, Experian Smart Money, is offered with its FDIC-insured partner, Community Federal Savings Bank. There are no monthly fees, and it works with Experian Boost® to add non-reported payments (like rent and utilities) to your credit file. Using the debit card for eligible bills can build credit history, and other perks include 55,000 free ATMs, early direct deposits, and both virtual and physical debit cards. An Experian membership is required, but there's a no-fee option.
Pros
No monthly fees
Works with Experian Boost®
Large 55,000 ATM network
Cons
Requires Experian membership
Bills must be eligible for Experian Boost® to gain credit history
Annual Percentage Yield (APY)
N/A
Intro or bonus offer
Get a $50 bonus if you deposit at least $1,000 in direct deposits within 45 days of opening the account
Credit Sesame’s Sesame Cash account, backed by Community Federal Savings Bank, offers a credit builder feature for $9.99 per month. You deposit funds as a security for a virtual Secured Credit Card, set your credit utilization ratio (e.g., $500 deposit with a 30% ratio means a $150 limit) and Credit Sesame reports to the major bureaus. Purchases within your set ratio are tracked, with funds set aside for automatic on-time payments each month. Fees are waived for the first month and ongoing fees can be avoided with a $500 monthly deposit or at least $1,000 in spending. However, know there is an inactivity fee of $3 if there are no transactions for 30 days.
Fee
$9.99 per month
Minimum deposit to open
$0
Credit Sesame’s Sesame Cash account, backed by Community Federal Savings Bank, offers a credit builder feature for $9.99 per month. You deposit funds as a security for a virtual Secured Credit Card, set your credit utilization ratio (e.g., $500 deposit with a 30% ratio means a $150 limit) and Credit Sesame reports to the major bureaus. Purchases within your set ratio are tracked, with funds set aside for automatic on-time payments each month. Fees are waived for the first month and ongoing fees can be avoided with a $500 monthly deposit or at least $1,000 in spending. However, know there is an inactivity fee of $3 if there are no transactions for 30 days.
Pros
No APR
Automatic payments available
Set your own utilization ratio
Card offers cashback rewards
Cons
$9.99 waivable monthly fee
$3 inactivity fees
Not clear which bureaus it reports to
Annual Percentage Yield (APY)
N/A
Rewards
Cash back requires the activation of any active offer before payment is made and depends on geographic location
Fee
$9.99 per month
To waive the fee
Must set up a deposit of at least $500 per month or spend at least $1,000 per month with the Sesame Cash account
One of the best benefits of secured cards is the opportunity to build a better credit history, and usually, it also means fewer fees than traditional credit cards.
Usually no APR. Most prepaid credit cards don’t charge interest.
Fewer fees. Many of these credit-building secured cards we’ve found don’t charge monthly fees.
The account is secured. Most of these cards require some type of security, whether it be a linked bank account or a security deposit, making them a safer way to borrow due to the lower risk of accumulated debt you can’t repay.
No credit check. The majority don’t require a hard credit pull, and if they do, the requirements tend to be easier to meet than traditional credit cards or loans.
There aren’t many downsides to these unique secured cards, as many of them lack interest charges, late fees and hard credit pulls.
But just like any form of credit, there’s still some risk of harming your credit history. Late payments and high utilization ratios can harm your credit score. While they’re called credit building products, it’s up to you to maintain a positive payment history to actually improve your credit score.
Keep these in mind while compared secured card options:
Low spending limits. Because these prepaid credit cards often require a security or deposit, the spending limits are typically much lower than traditional credit cards.
Often requires linked bank accounts. Most require you to link an existing bank account, and require you to open a specific checking account to qualify.
Check where they report. Some credit-building products don’t report to all three credit bureaus. For example, Experian Boost only reports to Experian.
Credit building loans take time. Unlike traditional installment loans, credit-building cards with loan installments won’t let you access funds until the term is over.
Building credit takes time — often years of hard work. While credit-debit cards can help push you in the right direction, they’re also not the only way to boost your credit history — see more tips on how to build your credit.
Who are credit-building cards best for?
Credit-building debit cards are best for anyone who wants to start improving their credit history, and many are often designed for college students or young people who are new to borrowing. Most of these prepaid credit cards don’t require a hard credit pull, so your credit history may not be a factor at all during the application process.
But count on needing a security deposit or a linked bank account to qualify for a prepaid credit card. And they won’t build credit on their own — you may have to use the card so that repayments get reported to the credit bureaus.
These cards aren’t designed for large purchases, earning cashback rewards or emergencies. They’re not made for seasoned borrowers who already have regular credit cards, either. If you’re a student in need of a regular credit line, but your credit score isn’t up to par, consider looking at student credit cards instead as they tend to have more lax credit score requirements than regular credit cards.
How credit-building cards compare to traditional cards
Both can help you build a credit history, but overall, debit-credit cards are likely to have fewer fees.
Type of card
Credit check
Charges interest
Annual fee
Late fees
Credit-building debit cards
Rarely
No
Rarely
Rarely
Secured credit cards
Yes
Yes
Usually
Usually
Unsecured credit cards
Yes
Yes
Usually
Usually
How to build credit for free
Most methods of credit-building involve taking on credit — personal loans, credit cards, auto loans and so on — and those tend to include interest charges. If you want to build credit for free, there are a few secured cards with no monthly or annual fees, and some free rent reporting services.
Secured credit cards. There are a few free credit-building debit cards like the Step card. It doesn’t charge monthly fees, annual fees or interest charges. If you go with a traditional secured card that is backed by a security deposit, you can choose one that has no annual fees and just be sure to pay your owed balance off each billing cycle to avoid APR.
Rent reporting. Some rent-reporting services charge monthly fees, but a few like Self and Experian Boost don’t charge anything to report your rent payments.
Subscription reporting. While most subscription reporting services do have some sort of monthly fee, there’s one that stands out for its very long trial period: Grow Credit. This service can report your subscription payments and its base plan called Build is free for 12 months and you can report up to $17 a month in subscriptions.
Frequently asked questions
Can I use a regular prepaid card to build credit?
No, regular prepaid debit cards don’t build or establish credit history. Prepaid cards aren’t a form of credit so they’re not added to credit reports. The term “prepaid credit card” is being used to describe some secured credit cards with reloadable deposits, making them similar to regular prepaid cards in that you can only spend what you’ve deposited in the linked account.
Do debit cards build credit?
No, regular debit cards that are linked to a deposit account don’t build or establish credit history. Similar to prepaid cards, debit cards are not a form of credit and are not added to credit files. Some credit-building secured cards refer to themselves as “debit cards” such as Extra and Fizz, but for payments to be reported, there has to be some sort of credit involved. For example, with Extra, you use the Extra card to make purchases and the amount is pulled from “Spend Power,” which is the line of credit. Extra pays itself back with the funds you deposited.
What is the fastest way to build credit from no credit?
There isn’t a perfect answer for this, but we will say that establishing a good history with no credit history tends to be easier than rebuilding a negative history. If you have nothing on your credit file, adding a credit card or installment loan can create a positive credit score quickly, often within a few months of on-time payments. If you go with a credit card, remember that your credit utilization ratio will greatly impact on your overall score, so try to keep your owed credit card balances below 30% of their credit limit and stay on top of your minimum payments.
Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto.
Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt.
Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others.
Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio
Bethany's expertise
Bethany has written 435 Finder guides across topics including:
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