These cards are linked to a deposit account balance, which determines your credit limit, allowing you to avoid excessive debt while also building a credit history.
Chime® Credit Builder Secured Visa® Credit Card
Step Black Card
Extra debit card
Credit-building cards are like a debit and credit card hybrid. They’re basically an alternative secured credit card, but with a different security deposit.
Credit-building cards are usually secured with an existing, linked bank account. The linked bank account balance acts as your security balance and sets your spending limit. When you use the card to make purchases, the balance is repaid with the linked bank account. Those payments are then reported to the credit bureaus, which can help you build a positive credit history.
Most traditional secured and unsecured lines of credit charge interest. But most credit-building are free, and most don’t charge annual fees or an APR like a traditional credit card.
One of the best benefits of credit-building cards is the opportunity to build a better credit history, and usually, that means fewer fees than traditional credit cards.
Credit-building products are considered safer than traditional borrowing methods, but with that safety comes some downsides.
Credit-building cards are great for anyone who wants to build or start improving their credit history.
However, you’ll need a security deposit or a linked bank account that’s funded for the card to actually work. They won’t build credit on their own — you have to use the card so that repayments get reported to the credit bureaus.
Building credit takes time — often years of hard work. But many of these cards can help push you in the right direction if you consistently use them and make all your payments on time. But taking on credit-building products isn’t the only way to boost your credit history — see more tips on how to build credit here.
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