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  1. Credit
  2. Building Credit

These Debit Cards Claim to Help You Build Credit — Are They Worth It?

By: Mary Ellen Cagnassola
Mary Ellen Cagnassola, expert in Social Security, retirement, housing, and Reporter at Money
Mary Ellen Cagnassola
Reporter | Joined May 2024
Mary Ellen (M.E.) Cagnassola joined Money as a reporter in 2022 covering retirement, housing, employment, personal debt, lifestyle and more. Her reporting is informed by a dedication to service and equity.
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Editor: Julia Glum
Julia Glum, expert in the IRS, taxes, credit scores, saving, colleges, mobile payment apps, and News Editor at Money
Julia Glum
News Editor | Joined February 2018
A graduate of the University of Florida, Julia has more than five years of experience in personal finance journalism. In addition to overseeing Money’s news coverage, she frequently reports on the ins and outs of credit scores, the credit bureaus and free credit reports.
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Published: Sep 11, 2023 11 min read
Person paying groceries using a debit card to build credit
Getty Images

It probably seems counterintuitive to reach for a debit card at the register if you want to build credit with everyday purchases. Debit card activity isn't usually reported to the major credit bureaus, and traditional personal finance wisdom dictates that you typically build credit by taking out loans, opening credit cards and making payments on time.

But lately, new debit cards with credit-building capabilities have hit the market.

Often geared toward younger consumers and customers with little or poor credit, these debit products — including Sesame Cash, the Fizz debit card and the Extra debit card — claim they can build people's credit files and improve scores without exposing them to the risks posed by credit cards.

The rollout of these products is timely considering that credit card debt in the United States has climbed over the past decade, topping $1 trillion earlier this year, according to data from the Federal Reserve Bank of New York. Americans are having a hard time paying their credit card bills thanks to interest rate hikes that have pushed the average annual percentage rate (APR) on credit cards to more than 20%. With student loan payments returning this fall after more than a three-year pause, borrowers with both education debt and mounting credit card debt face a particularly difficult set of financial circumstances.

“Most of the young people who have had credit cards have never seen interest rates like this,” says Cary Carbonaro, a certified financial planner and the director of Women and Wealth at Advisors Capital Management. “Couple that with credit card and student loan debt, and it’s like a triple whammy.”

Even so, building credit is crucial — it can determine much of what you’re able to do (and buy) in adulthood, from renting a place to live to financing a car or an education — so you need to find some way to demonstrate to lenders that you're a safe bet.

Enter the credit-boosting debit card.

Extra, Sesame Cash and Fizz credit-building debit cards