Following the aggressive marketing done by Extra about their product and the many questions I got from readers, I created this post to tackle the question “Is the Extra card any good for building credit?”.

In general, I don’t have a positive feeling about building credit with Extra.  Here’s some in depth reasoning to that.

What is the Extra card

The Extra debit card works like any debit card. You swipe the card and the money is extracted from your bank account. Extra does not have their own bank account. Rather, the card is linked to your original bank account and Extra takes the money from there, for every purchase you make, as soon as you swipe.

If you have no funds in your bank account, the transaction will not go through.

Does Extra have any fees?

Yes, the Extra card has a fee and that’s precisely the problem. Extra has a monthly fee of $20 a month. That comes to a grand total of $240 a year! 

But let’s say you already made peace with the $240 fee. Will the $20-a-month-card help you build credit?

Does the Extra card help build credit?

Extra boasts about being the first ones with a debit card that helps build credit. Whether the first part of that sentence may or may not be true and honestly, who cares, the part about it helping to build credit… I have what to say about that.

The fee

Even though you already made peace with the $20 a month now, are you going to keep paying $20 per month for the card, every month for the rest of your life? Most probably not (I can’t imagine someone sitting at their grandson’s wedding and still having a $20 a month debit card that they opened when they were 18 years old….). 

So once you’re fed up with the $20, you’re going to cancel the card and close the account.

Since the Extra card is your only tradeline, or likely your first tradeline, closing the card is BAD for your credit. That’s just how it is; closing your first tradeline has a big negative impact on your score, and so does closing your one and only tradeline. 

So whatever credit it did help you build, it’ll go down the drain as soon as you want to stop paying the monthly fee and you close the card.

That is the reason I recommend your first few cards to be no annual fee cards, so that you can keep it open forever and never have to cut your credit history short.

Extra does not report to all credit bureaus

In addition, Extra only reports to two of the three credit bureaus. They report to Experian and Equifax, but not to Transunion. 

Will Extra help you build credit? If it does in any way, it will never help you build up your Transunion score.

They might go bankrupt and take your credit along

Being that Extra is a newcomer on the block, in my opinion, they are not established enough for you to rely on them for credit. If they end up closing down and no one takes over their portfolio then your account will be shut down, you will be losing your oldest tradeline, and your credit score will be affected (possibly) severely.  

To sum up Extra

While Extra has the dynamics of a debit card, being that the funds are extracted from your account as soon as you swipe the card, you do get rewards on purchases like some sort of a credit card. And Extra may help you build credit if you use the card well. 

But Extra will not help you build credit with Transunion. And since the card has a monthly fee, you may wind up closing the card down the line and that’ll take your credit down the dumps.

Are there alternatives to Extra?

I researched other products out there to see if there are any alternatives to Extra; debit cards that help for your credit. These are some possible alternative options I came up with.

Chime

Chime is an app-based bank account. You get the Chime Credit Builder debit card and link it to the Chime account. You use the Chime debit card by transferring money from your Chime bank account onto your debit card.

Chime reports payments to all three credit bureaus so that may lead you to believe the card helps you build credit. It does, but here’s a catch. 

In order to open a Chime debit card, you must first receive a $200 direct deposit to your Chime bank account. And to keep the debit card open, you must receive a minimum of a $200 direct deposit to your bank account every year thereafter.

If those direct deposits ever stop, your card is shut. And your credit is killed. Oh, and the card does not earn rewards.

Sequin

Sequin is yet another debit card that claims to help you build credit. It works similarly to Extra, being that the card connects to your existing bank account and draws funds from the account as you make purchases. In order to be eligible for the card, you must give a security deposit at the time of applying. That deposit amount becomes your credit limit.

Sequin reports only to Experian of the three credit bureaus, which is a major downside. You can’t build proper credit when you’re only building credit with one credit bureau. Many lenders pull from all three bureaus, so Sequin will not help you much. 

The card does not have any fees but you also don’t earn rewards.

Conclusion

While all of the above debit card products claim to help you build credit, I have not found any of them to be at all worthy. 

As I mentioned above, the cards are either ones that you will not manage to keep open forever due to the fees, such as Extra, or they simply don’t report to all of the credit bureaus. And in my opinion, none of them are established enough for you to trust with your credit.

A much better and effective way to build credit would be through following the steps in this post.

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