The Extra Debit card, founded in 2020 in New York, is the perfect go-to for those who like to use cash yet want to build credit.

The Extra Debit card is a debit card that connects to your checking account. When you use your card to make a purchase, the funds are drawn from your checking account, using only the money that is in your account. That’s the “using cash’ part. But you also get to build credit with this debit card because Extra reports to two credit bureaus at the end of each month. That’s the “building credit” part.

Those are the main attractions of the Extra Debit card. The fact that you don’t need to get a credit card if it’s against what you believe in, but still have a chance to build credit. 

The Extra Debit card, the first debit card to help you build credit, seems like the perfect mix put into one card. Let’s see what this card is all about and what attracted over 80,000 users to Extra. 

What’s wrong with a credit card

Before we get into the card, you may be asking, “what’s wrong with the regular credit card? Why get a debit card to build credit?”

There is actually nothing wrong with a credit card. However, you often need good credit to get approved for a credit card, plus applying for a credit results in a hard credit pull which affects your credit score. Plus, it is so easy to hurt your credit if you do something wrong on your credit card, such as keeping a high balance or missing a payment. 

Yes, credit cards are great and probably the best way to keep your credit up. But if you have difficulties with any of the credit card facts above, the Extra Debit card may be the perfect thing for you. And you don’t have to worry about getting into debt. 

Avoid getting into the red

What’s a debit card? A debit card automatically extracts funds from the associated checking account when you use the debit card to buy something. Right?

That is how the Extra Debit card works as well, with a bit of a catch because with the Extra Debit card, you can never carry a balance. That’s great! Instead of running into debt you get to stay on top of your spending.

When you swipe your card to make a purchase with Extra Debit, Extra extends credit to you so that you can make that purchase, as if they’re lending money to you like with a credit card (that’s how they can report the card transactions to the credit bureaus). Within a day of making the purchase, Extra draws the funds from your connected checking account to pay themselves back for the money they “lent you” and to pay off the balance.  

So yes, the money only leaves your bank account within the following day but you can’t carry a balance for longer than that.

The fear of owning a credit card and racking up debt, more than you’d ever spend using cash, is not at all relevant when using the Extra Debit card since it’s impossible to carry a balance for more than 24 hours.

The only way you can get into the red with the Extra Debit card is if you spend more with your card than you have in your account, and by the time Extra draws funds from your account to cover the previous days purchases, you’ve overdrawn your account and there aren’t enough funds to cover the balance. This is a negative mark and can surely hurt your credit. 

So there is some room for conscience spending, even with an Extra Debit card. However, Extra does have spending powers set in place to help you stay within your budget.

Your spend power credit limit

Unlike the usual debit card, an Extra Debit card user gets a credit limit, known as Spend Power. Your designated spend power is the maximum credit available to you on your card and you cannot go over that amount.

Extra sets your spend power based on your connected bank account’s transaction history and current balance. This ensures that the maximum amount you are allotted to spend on your card is within the range of your current and previous account balances. So you will not have much room for overspending on your card once your spend power is set, not much more than your usual balances.

Your spend power will be relatively low at the start since right at the beginning, you don’t have much Extra credit history. Spend power does increase as you use your Extra card and build history and the balance in the connected bank account grows. 

Your spend power can also increase if you complete tasks from the Extra app.

So although there can be a fear of overspending and Extra not having funds to draw from your account, the fear is not valid because your spend power will keep you in check.

It is important to note that despite your Extra Debit card being reported to the credit bureaus, it does not get reported with a credit limit. So credit utilization, the percent of the available credit you use on the card, will not affect your credit. Bonus points to Extra for that.

Do I need to have credit to get the card

The good news is that Extra does not pull your credit from any bureaus when you apply for the card. That basically means that no credit is needed to get approved for the card, so whatever credit stage you’re at, you can get approved for the card. 

Plus, no hard inquiry is made so applying for the card will not affect your credit at all!

Qualifications needed for the card

Although no credit is needed or checked when you apply for the Extra Debit card, there are some qualifications you need to meet in order to be eligible for the card:

• You must be at least 18 years old
• You must have a U.S. non-PO address
• You must be the holder of a social security number or ITIN
• You must have a U.S. checking bank account that is supported by Extra

You can apply for the card here. 

Once you qualify for the card and you apply for the card, Extra simply scans your personal information, such as your name, date of birth, address, social security number, and of course your bank account. You may need to verify your phone number with a verification code sent to your phone.

You must have a supported checking account

Most complaints from Extra Debit reviews are regarding bank accounts not being supported by Extra and therefore a consumer not being eligible for the card. Extra supports over 10,000 different bank accounts, so it is hard to imagine that your bank should not be amongst that, but it is important to ensure that. 

Without a supported checking account, Extra has no place to draw funds from so your card must be connected to a checking account. You can check here, in the “Does Extra Connect with My Bank” section, if your bank connects with Extra.

How to use your card

Firstly, you get your card fair and square, no security deposit needed from your end. You just need to connect the card to your existing checking account. 

You will get your actual card in the mail but since it can take up to 5-10 business days to get your physical card, you can use a virtual card as soon as you finish the application, until you get your physical card. 

Once your card is linked, you can use and swipe it anywhere in the US (and only in the US) just like any debit or credit card, anywhere Mastercard is accepted, and you can even use it with Apple Pay. You can use it to pay your bills, to make purchases in stores, to shop online, and more.

However, you are unable to withdraw money from ATM machines with your Extra Debit card. To withdraw from an ATM, you will have to use your regular bank debit card.

Fraud protection

Every time a purchase is made on your card, you will get a text to notify you. That’s Extra’s way of avoiding fraudulent activity on your account.

If any fraud does occur, it is dealt with by Extra and not by the connected bank account. Extra will also handle disputes.

Card annual fee and rewards

The Extra Debit card doesn’t have an annual fee, but rather, you choose from two plans for which you pay a subscription fee.

The plans are as follows.

1- Credit Building Plan

The cost for the Credit Building plan is $7 a month or $84 a year. What you get with the plan is just the ability to build credit. No other rewards or perks are included.

The fee is pretty steep for a card with no rewards so it is really only worth it for you to own the Extra Debit card with the Credit Building plan if you actually build good credit with it. Otherwise, you’re paying a high price for nothing because the card is designed to help you build credit. If you misuse it, don’t spend so much to keep it and find yourself a different card. 

If you do usually rack up high balances on high-interest cards, then for that itself, the Extra Debit card may be worth it for you. Instead of paying high interest fees, you can just pay the subscription fee for the Extra Debit.

2- Credit Building and Rewards Plan

The cost for the Credit Building and Rewards plan is $12 a month ($144 a year) if you pay monthly, or $108 a year ($9 a month) if you pay annually. As you see, it’s cheaper to pay annually rather than monthly. The reason the price is higher is because card holders get to earn rewards besides building credit.

You can earn 5 points on all purchases. The points you earn can be used only for Extra Store purchases, including store gift cards. 

All purchases made on an Extra Debit card qualify for points. You may even sometimes come across promotions or extra point rewards.

Points can be worth up to 1 cent per point but can only be used for Extra purchases.

Start out low

Since your spend power is low at the beginning when you just start out with Extra, and you are therefore limited to how many purchases you can make on the card, and therefore how many points you can earn, it may not be worth it to sign up right at the start for the second, higher paying subscription, the Credit Building and Rewards plan, just to earn points. 

What is more recommended is to start out with the cheaper plan, the Credit Building level. As you use your card and your credit goes up, your spend power will increase. Once your spend power is up and you have more room for spending on your card, you can change to the more expensive plan and earn rewards.

You can only switch plans once your current subscription is up. To give yourself flexibility, you may want to pay monthly versus yearly so that you have the option of shutting your card whenever you want.

To cancel your plan, you will need to call 833-984-2291 or the number on the back of your Extra Debit card. You cannot cancel your subscription online.

Building credit with the credit bureaus

The hype is to build credit and fortunately, the Extra Debit card will enable you to do so. Extra reports your transactions as payment activity to Experian and Equifax at the end of each month, so you get to build your credit with them if you use your Extra card well. Good usage of the card will help you build your credit history and will even positively affect your credit mix, as the Extra Debit card is an additional credit line on your credit report.

It’s interesting to note that customers report having built credit within a month with the Extra Debit card!

Unfortunately though, Extra does not report to Transunion, so you have no chance of building credit with Transunion through Extra.

No interest, no fees!

You will not be charged any APR since full payment for every transaction made with your Extra card is automatically paid for by the next day, as we discussed earlier.

And there are no hidden fees either! You will not find yourself paying late fees, overdraft fees, or any other fee.

Customer service

Customer service is provided via White Glove Member Concierge which offers online chat with a rep. You can access chat in the app or on the website. Chatting is available 24/7 but it seems to be the only means of communication. There are some Extra users who report negatively regarding the Extra Debit card customer service though it seems you can get a response on the live chat within 60 seconds.

As a matter of fact, the Extra Apple app has a star rating of 4.6 out of 5. Not bad.

Can I trust Extra

The Extra parent company is Thingy Thing Inc. and is legit. Also, Extra has a partner bank, Evolve Bank & Trust, who is FDIC insured for up to $250,000. 

In addition, Extra connects to your bank account via Plaid, which is widely used and is safe.

Extra is not yet recognized by BBB since they are around for so short but they are working on it.

Pros versus cons

Like all things, we can definitely weigh the pros and cons. 

The pros of the Extra Debit card are as follows: It allows you to build credit even with it being a debit card. Plus, there is no credit pull or necessary credit needed to get approved for the card.

The high subscription fee on the card is definitely a con for people, plus the fact that Extra does not report to Transunion.  

Alternatives to Extra Debit

There are some secured cards or debit cards that can be alternatives to the Extra Debit card, that may earn more rewards and benefits than the Extra Debit card.

Sequin’s card is a debit card that connects to your checking account. There are no fees with the Sequin card but Sequin only reports to Experian of the three credit bureaus. 

The Sesame Cash debit card works more like a virtual secured card. You need to set aside a deposit which then becomes your available cash to use with your card. 

Secured cards over Extra Debit

You can always use secured cards and they may even help you build credit, plus they usually don’t have an annual fee. But secured cards have interest so if you have a balance that you don’t pay, you might just end up paying more on interest than you’d pay for the Extra Debit card subscription fee. And Extra doesn’t hurt your credit when you apply for their card and you can never miss a payment, while that is not true for secured cards. 

So weigh your pros and cons and make an educated decision before you dismiss the Extra Debit card for secured cards. 

Conclusion

Extra is a great way for beginners to build credit and for people with bad credit to switch over to. 

The subscription fees on the card plans are high but it can be worth it for you if you really want to build credit.

You get to use only the cash you have in their checking account and still build credit, without having to get into debt.

It’s a win-win if you use it right.