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11 Prepaid Credit Cards to Build Credit

Prepaid credit cards are secured cards that work like debit cards to avoid APR and build credit.

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.

Featured credit-building cards

Second-chance credit building

Chime Secured Credit Builder Visa® Credit Card

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  • No annual fees
  • No credit check to apply, no interest and no minimum security deposit
  • Apply with a Chime Checking account and qualifying $200+ direct deposit

Credit building for young adults

Step Visa Card

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on Step's secure site
  • $0 monthly fee
  • No credit check, security deposit or interest charges
  • Up to 3% cashback
  • Earn 4% with $500+ in direct deposits
  • Build positive credit history before 18

4% bonus with all-in-one account

Current Credit Building Card

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on Current's secure site
  • $0 monthly fees
  • No credit check, interest charges or security deposit
  • Build credit plus earn up to 4% on savings

11 cards that build credit

1. Step Visa Card

Step Visa Card

4.7
★★★★★

Finder score

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on Step's secure site
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APY4.00%
Fee$0 per month
Minimum deposit to open$0

2. Current Build card

Current Credit Building Card

4
★★★★★

Finder score

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on Current's secure site
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APY4.00%
Fee$0 per month
Minimum deposit to open$0

3. Firstcard

Firstcard

4.4
★★★★★

Finder score

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on Firstcard's secure site
APYUp to 4.00%
FeeFrom $4.99 per month
Minimum deposit to open$0

4. Varo Believe card

Varo Believe

5
★★★★★

Finder score

Existing and new customers get a $25 referral bonus when signing up for a Varo Bank account. T&C apply.
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Fee$0 per month
Minimum deposit to open$0

5. Chime Credit Builder card

Chime Secured Credit Builder Visa® Credit Card

5
★★★★★

Finder score

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Fee$0 per month
Minimum deposit to open$0
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.
Building credit: On-time payment history may 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.
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.

6. Cleo Credit Builder Card

Cleo Credit Builder Card

4.4
★★★★★

Finder score

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Fee$14.99 per month
Minimum deposit to open$1

7. Fizz debit card

Fizz debit card

4.7
★★★★★

Finder score

Earn 1,000 points ($10 value) when you download the Fizz app and enter code FINDER.
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APYN/A
FeeFrom $4.17 per month
Minimum deposit to open$150

8. Sesame Cash prepaid debit card

Sesame Cash

4.2
★★★★★

Finder score

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Fee$9.99 per month
Minimum deposit to open$0

9. Kikoff

Kikoff Secured Credit Card

4.7
★★★★★

Finder score

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on Kikoff's secure site
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FeeFrom $20 per month
Minimum deposit to open$50

10. Extra debit card

Extra debit card

4.3
★★★★★

Finder score

Read review
FeeFrom $20 per month
Minimum deposit to open$0
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.

11. Experian Smart Money Digital Checking Account and Debit Card

Experian Smart Money™ Debit Card

4.7
★★★★★

Finder score

Get a $50 bonus if you deposit at least $1,000 in direct deposits within 45 days of opening the account
Read review
Fee$0 per month
Minimum deposit to open$0

Benefits of prepaid credit cards

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.

What’s the catch with prepaid credit cards?

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 cardCredit checkCharges interestAnnual feeLate fees
Credit-building debit cardsRarelyNoRarelyRarely
Secured credit cardsYesYesUsuallyUsually
Unsecured credit cardsYesYesUsuallyUsually

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.

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To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.
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Written by

Editor, Banking

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

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Bethany has written 441 Finder guides across topics including:
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