Debit cards are convenient — they help you manage your day-to-day expenses without the risk of falling into debt. But there are benefits to using a credit card, including the chance to increase your credit score.
So, can you build credit with a debit card? Not always, since not all debit cards offering credit-building features are universally available or debt-free. But, while traditional debit cards don’t typically impact your credit, there are newer options that can help you build credit. Let’s take a closer look at how these options can help you reach your credit goals.
Does a debit card build credit?
Can you build credit with a debit card? Technically, the answer is no — not in the traditional way. Since your debit card pulls funds from your
checking account, using it doesn’t rely on borrowed funds. Because of this, debit card transactions aren’t reported to the major credit bureaus: Equifax, Experian, or TransUnion. And any debit card that does report to a credit bureau doesn’t necessarily build your credit, either. It depends entirely on your financial institution, financial behavior, and credit bureau policies.
Does a debit card affect your credit score?
Again, the answer is no: You can’t use your debit card as credit, since it’s a way to access your own funds, not a way to borrow money or build credit.
What debit cards build credit?
Most debit cards don’t help you build credit, but some newer cards make it possible. These debit cards that build credit are linked to your bank account like a standard debit card. But these options report your transactions to the major credit bureaus, helping you establish a positive credit history without taking on the risks of high-interest credit card debt. Just know that many come with membership fees, limitations, and eligibility criteria, so you might need to do more research before signing up for a card.
Here’s how they work: When you make a purchase, the card pays the merchant on your behalf and then withdraws the money from your checking account to cover the transaction. These cards then report your spending as repayments, boosting your credit report and improving your score over time — all without borrowing money or worrying about interest charges.
Here are a few options to check out:
Extra Card. The
Extra Card works like a secured card by linking to your bank account, reports transactions to the credit bureaus and offers rewards like cash back. It’s one of the best debit cards to build credit for those looking for added rewards, and comes with a spending limit based on your bank balance. You don’t need a credit score — just an SSN or ITIN number. Extra does charge monthly fees to become a member, with two tiers available.
Fizz. Designed for students,
Fizz helps you build credit responsibly by syncing with your checking account and reporting payments to the credit bureaus. Signing up doesn’t require a credit check but it does cost a monthly fee and require a linked bank account. It’s a revolving, unsecured line of credit that runs on the Mastercard network.
These cards offer a great way to build credit without getting into debt, making them ideal for anyone looking for low-risk options.
When to use a debit card versus a credit card
Choosing between a debit card and a credit card depends on your financial goals, spending habits, and what you're trying to achieve with your purchase. Let’s break down some situations where one might be a better option than the other.
When to use a debit card
A debit card is a great choice when you want to stay within your budget, avoid borrowing money, or make small purchases. Here are some situations when a debit card is the better option:
To avoid interest. Debit cards don’t charge interest because you’re spending money directly from your checking account, rather than borrowing it.
To prevent debt. Since you can only spend what you have in your account, debit cards can help you avoid accumulating credit card debt.
To stop overspending. With a debit card, you’re limited to the balance in your account, making it easier to stick to your budget. Even if you overdraft — or have
overdraft protection — the ability to only use the funds in your account makes it less likely you’ll spend beyond your means. And credit cards used to avoid overdraft fees could incur finance charges if balances aren’t paid in full.
For small, everyday purchases. For transactions like groceries or coffee runs, a debit card is convenient and prevents small purchases from piling up on your credit card balance.
When to use a credit card
To improve your credit score.
Using a credit card responsibly by paying your balance on time can help build your credit history and raise your credit score.
To earn reward points. Many credit cards offer rewards like cashback, travel miles, or points, making them a good choice if you want to benefit from your everyday spending.
To avoid overdraft fees. A credit card acts as a buffer, allowing you to make purchases even if your checking account balance is low and
avoiding overdraft fees.
For purchase protection. Credit cards often come with protections like extended warranties or fraud protection, offering more security for larger purchases or online shopping.
5 alternatives to build credit
Building credit takes time, but you don’t need to rely solely on traditional credit cards or even a particular debit card. Whether you’re starting from scratch or rebuilding, here are five practical ways to strengthen your credit history and improve your credit score.
1. Become an authorized user
If someone close to you, like a parent or spouse, has a credit card with a good history, ask to be added as an authorized user. Even if you don’t use the card, their credit behavior will be reflected on your credit report. If they’re responsible with the card, a positive credit score could help add yours. But be cautious: if they miss payments or carry high balances, it could impact your credit score, too.
Choose someone with a low credit utilization ratio and a long-standing account for maximum benefit.
2. Open a secured credit card
A secured credit card works like a stepping stone to traditional credit. You provide a refundable deposit — typically $200 to $500 — which becomes
your credit limit. Use the card for small, manageable purchases and pay the balance in full each month. These payments are reported to the major credit bureaus, proving you’re a reliable borrower.
Secured cards could have high fees, so try to look for
secured cards with no annual fees. Some also automatically convert to an unsecured card after a track record of responsible use.
3. Consider a credit-builder loan
A credit-builder loan
helps you build credit history while creating savings. The bank or lender holds the loan amount in a secure account, and you make regular payments over a set term (like 12 months). Once the loan is fully paid, you get the funds back. Meanwhile, the institution reports on-time paymentsEquifax, Experian, and TransUnion, strengthening your credit history and improving your credit score. These loans can still involve interest or additional fees, even if they’re intended to build credit.
Many local credit unions and online services offer affordable credit-builder loans with flexible terms, so shop around to find your best option.
4. Report rent and utility payments
Many people don’t realize their biggest monthly expenses — rent and utilities — can help build credit. Services like Experian Boost, PayYourRent, and RentTrack allow you to report these payments to the credit bureaus. Regular, on-time payments demonstrate financial responsibility and can give your credit score an immediate lift. While this won’t establish credit as quickly as a credit card, it’s a great way to enhance your credit report with existing payments you’re already making.
5. Get a co-signer
If you’re struggling to
qualify for a credit card or loan, a trusted friend or family member with good credit can act as a co-signer. This gives lenders confidence that the debt will be repaid, making it easier for you to access credit as you build your credit history.
But if your co-signer defaults on the loan, your credit score could take a hit. Remember, your co-signer is equally responsible for the debt, so it’s important that you both repay the debt on time. You might end up paying more in interest or deeper in debt if neither of you can afford the monthly payments. To reduce risk, start with a smaller loan or credit card limit that you know you can manage.
How to build a healthy credit score
Building and maintaining a strong score is entirely within your control, but the results are based on consumer behavior and various external factors.
Here are some simple steps to help you improve your credit score.
Pay your bills on time
Paying your bills on time is one of the easiest ways to protect your credit score. Even one missed payment can cause a dip, so setting up automatic payments or setting reminders can save you from unnecessary setbacks.
Don’t open multiple accounts
It might be tempting to open several new credit accounts, but doing so in a short period can hurt your credit score. Each time you apply for a new line of credit, it triggers a hard inquiry, which can lower your score. Stick to opening new accounts only when necessary, and be mindful of the long-term effects.
Keep a low credit utilization ratio
Ideally, you want to use less than 30% of your available credit. This shows lenders you’re responsible with your spending and not relying too heavily on credit. If you’re close to maxing out your credit card, try paying it down to lower your utilization.
Monitor your credit
Regularly checking your credit helps you spot any errors or signs of identity theft early on. If something looks off, addressing it right away can prevent long-term damage to your credit score.
Want to keep tabs on your credit and make sure you're on the right track? Try
EarnIn’s Credit Monitoring tool to get alerts and stay in control of your financial health — with no credit checks or fees.
Unlock the benefits of a healthy credit score
Maintaining a strong credit score is essential for long-term financial well-being. While debit cards generally don’t contribute to credit building, there are new credit tools that can support your financial goals — just watch for potential fees and limitations to ensure compliance.
EarnIn’s Credit Monitoring tool makes it easy to track your score and stay on top of any changes, so you can catch potential issues early and keep your credit in check. Plus Balance Shield can help you avoid low bank balances to potentially
prevent costly overdraft fees by receiving alerts when your account balance is low so you aren’t caught off guard.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
EarnIn is a financial technology company not a bank. Banking Services are provided by Evolve Bank & Trust, Member FDIC.
Calculated on the VantageScore® 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don’t be surprised if your lender uses a score that’s different from your VantageScore 3.0. Learn more.
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