It can be challenging to get loans and open accounts with no credit to show under your name. As students or fresh graduates, finding ways to build your credit early on can help point to a sound financial life.
With so many limitations, however, what’s a good strategy? A debit card could be a good idea, but conventional ones don't contribute to your credit record or rating.
Fortunately, some banks and financial technology (fintech) companies now allow you to use debit cards to improve your credit.
We've looked into the best debit cards that help build credit, checked their official sites, and read dozens of reviews from real users through independent sites.
From there, we’ve uncovered the best tip for using a debit card to build your credit. Don’t miss the opportunity to make the most of your debit card!
What are the best debit cards that can help build credit?
Most people assume that debit cards don’t affect your credit score. Conventionally speaking, it’s true, but not with some modern debit cards today.
These debit cards work by linking to your existing bank account. Credit limits are based on your current account balance or lower, effectively adding a credit-building function.
What sounds worth a try if you need to build credit? Here are some recommendations:
1. Zoro
Zoro is a relatively new fintech company offering credit-building debit cards. It started in 2017 and has its headquarters in Austin, Texas.
Unfortunately, its Visa-backed cards are only available as an early-release promo, and you must be willing to be on the waiting list.
But the waiting time could be worth it. We’ve discovered that you can start immediately, even without a physical card. It also doesn’t do credit checks, so you can get a card even if you don’t have good credit.
Once you get approved and link your Zoro account to your checking account, it begins evaluating your purchases and cash transactions. This can be helpful because it allows you to set up a custom spending limit as you pay bills, shop online, and even use your Visa card in the real world.
Zoro will pay for your transactions initially, and it will later reimburse the funds from your linked checking account. It will summarize your purchases and send them to the three credit bureaus (Equifax, TransUnion, and Experian), helping you build a good credit history.
The only downside is that you will need to pay a $3 monthly fee.
| PROS | CONS |
| You only need to pay a minimal fee of $3.You can begin using it as soon as you get approved—no need to get the physical card.You can access tools designed to track finances.The three major credit bureaus can access your payment history.You can connect to your checking accounts. | You must sign up for a waiting list.There’s a $3 monthly fee. Zoro is a new company. |
2. Sesame CashÂ
Credit Sesame’s Sesame Cash is a free credit-building debit card you may want to look into.
Most debit cards listed here are limited to having your account balance as the set credit limit, but Sesame Cash operates differently.
With Sesame Cash, you must set aside a monthly amount to serve as a security deposit. This will be your ticket to using a virtual card, and the scheme allows you to build a good credit history.
Making purchases using the Sesame Cash virtual debit card will reflect on your other virtual card—the credit card version—which will appear as your payment history. The security deposit required monthly will then be used to pay it off.
This means that the monthly amount you set will determine the amount you can use per month. Although it allows you to make strategic purchases, Sesame Cash also reports your credit utilization ratio, so you must avoid spending more than 30% of the monthly security deposit.
| PROS | CONS |
| You don’t need to deal with hidden charges, overdraft fees, or foreign transaction fees.You can get paid to improve your credit, as users can earn a $10 bonus every time you achieve 10 to 99 points added to your credit score. For 100 points or more, you can earn a $100 bonus. You can set your credit limit and ensure you don’t overspend. | You must first open a standard Sesame Cash bank account before accessing the debit card.You must link to another bank account to make your monthly security deposit.It also reports your credit utilization ratio. |
3. ExtraÂ
Established in 2020, Extra claims to be the first to offer debit cards designed to help build credit. It issues Mastercard debit cards linked directly to your checking account.
With Extra, you don’t have to worry about the bank you’re with—it can accommodate and support over 10,000 banks across the United States.
After getting approved, Extra will take the time to analyze your purchase habits and cash flow to set a reasonable daily spending limit. Again, you don’t have to worry about hard inquiries. Even with bad credit, you have a chance to own a debit card.
The debit card works like a credit card. Unlike traditional credit cards, Extra automatically deducts a certain amount from your bank account after purchasing. You can pay back your purchase, eliminating late fees and interest rates.
At the end of each month, Extra summarizes your purchases and reports your payments to Experian and Equifax. Thankfully, you don’t have to worry about your credit utilization. No matter how much you spend through the debit card, Extra gives you some leeway.
Unfortunately, you must pay a $7 monthly fee for your basic account. A premium account costs $12 monthly, allowing you to earn 1% rewards that can be redeemed as gift cards or items.
| PROS | CONS |
| It has access to over 10,000 banks.You don’t have to go through a credit check.You don’t have to worry about hidden costs.You can enjoy the perks of a credit card without actually owning one. | You must pay a monthly fee.It only reports to Experian and Equifax.It only caters to U.S. residents. |
4. Sequin
The Sequin card caters mostly to women who need help building credit. From our research, we discovered that Vridna Gupta, after being rejected for credit card products she helped develop, founded Sequin and its mission of helping women access good credit.
However, the advocacy behind Sequin isn’t all there is. Seeing as it’s a credit builder, it works by linking the card to your existing checking account. You’ll also need to transfer a cash security deposit, which is refundable and can help set your spending limit.
Your Sequin Visa card will pay for your purchases, which the company will later reimburse from your account. You don’t have to worry about fees, interest charges, and credit checks.
At the end of the monthly billing cycle, it sums up your payment history and sends it to the three credit bureaus (Experian, TransUnion, and Equifax). You also get rewarded by gaining points for hair care, feminine hygiene, and other female products.
Pro tip: Sequin isn’t limited to female customers only. According to its website, the company’s main goal is to help you build credit high enough to qualify for other credit lines.
| PROS | CONS |
| You don’t have to pay monthly fees. It caters to women who need help building credit but is also open to those who need its services.It offers female products as special rewards.It notifies all three credit bureaus. | You need to pay an upfront deposit fee.Your spending will be limited. |
5. Grain
Grain is slightly different from other cards listed here because it allows you to use your existing debit cards.
It will operate on a different credit line, however, one that’s based on your income and spending habits. The premise is that the credit line can be transferred to your checking account as a cash advance, and you only need to pay back the amount you’ve used.
It helps you build your credit by reporting to the three major credit bureaus, which include payment history, credit limit, account status, and even current balance.
It’s also supported by 10,000 banks across the country, making it an ideal option if you don’t want to use a separate physical debit card.
Thankfully, you don’t have to worry about a monthly fee. You just have to keep careful track of your cash advances because they charge interest of up to 15%.
| PROS | CONS |
| Grain allows you to use your debit card similar to a credit card.It reports to all three major credit checking bureaus.It can affect your credit utilization reports.Grain can help increase your credit line. | Grain has a 15–17.99% interest rate, which is on the higher end.Transferring funds from your credit line to your bank account has a 1% transfer fee.You have to place security deposits.You’ll have to pay late fees when you don’t pay on time.You need an existing debit card. |
Other tips to build credit
Apart from these debit cards, what else can you do to build your credit? Here are some tips to consider:
Consider credit monitoring to track your progress
Credit monitoring services allow you to easily track your credit score changes throughout the year.
These services are often free and allow you to keep an eye on your credit report for changes, which can be helpful in tracking how your score changes when you’re using your debit card to build credit.
They also usually provide access to at least one of your credit scores from Equifax, Experian, or TransUnion monthly.
We’ve found that effective credit monitoring services can also assist you in preventing identity theft and fraud. For example, if you receive a notification about a suspicious new debit or credit card you did not apply for, you can act quickly and contact the company to report it.
Limit your credit applications
Inquiries into your credit history are classified into two types: hard and soft inquiries.
Soft inquiries leave no impact on your credit score. Hard inquiries, on the other hand, can negatively affect your score. Based on FICO’s feedback, a hard inquiry can decrease your credit score by five points. The effect lasts anywhere between two months and two years.
This can affect applications for a new credit card, a mortgage, an auto loan, and other credit lines. Although the process itself can’t affect your credit score, being unable to pay for these loans can lead to more significant risks. Because of this, it’s best to limit your credit applications.
Quick credit score FAQs
1. What credit score do you start with?
Generally, the baseline credit score is 300, but most people start with a higher score. A score of 300 is only possible with poor financial management.
2. What is a good credit score?
Defining a good credit score depends on the scoring model. However, typically, lenders consider ​​670 and above as good and low-risk. Poor credit scores are below 579, and lenders will be more careful when giving loans.
3. Is it possible to have a zero credit score?
You can’t have a credit score of zero, but you can lack a credit score. If you don’t have a credit score, it just means the credit scoring models can’t generate a score yet due to a lack of data.
4. How long does it take to get a 700 credit score from having no score?
Having a good credit score won’t happen instantly, and you need at least six months of timely payments to build a decent score. It’ll take even longer to have scores of 700 and above.
5. How can you raise your credit score to 800, and what builds credit the fastest?
Raising your credit score to 800 requires consistency and strategic use of credit. You must pay your bills on time and keep your balances low to improve your credit.
Final Thoughts
We all deserve to live a good financial life, even as we’re starting out. Accessing credit lines can be tricky, especially if you’re unable to qualify. Companies like those listed above are designed to help you, however, so get creative and explore your options! The only thing left to do now is to find which one works best for you—and see your credit score grow from there.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
