When you pay for everything in cash or with a debit card, it can be hard to build credit. After all, to build credit, you usually need to obtain debt.
But the Extra debit card is different. This debit card works like a credit card in that it reports your payment activity to the credit bureaus. But because it’s not a credit card, you won’t risk getting into debt.
For a small monthly or annual fee, you can improve your credit score without changing banks or going into debt.
Below we’ll take a look at the best and the worst that the Extra debit card has to offer.
How Does the Extra Debit Card Work?
The Extra debit card is a bit different from a traditional debit card in that it can help you build credit. But how does the card do this?
When you apply for the Extra card, you’ll need to link it to your current checking account. Extra currently supports linking with checking accounts from over 10,000 different banks.
Once your card setup is complete, you can begin using your Extra debit card just as you would any other debit or credit card. It is accepted anywhere that takes Mastercard.
As you make purchases, Extra pays for those purchases and then later pulls the same amount of funds out of your linked checking account.
So, if you swipe your Extra card at a restaurant for $30, Extra pays for it and then deducts $30 from your checking account one business day later. There are no fees or interest charges.
Then, at the end of the month, Extra totals up the purchases you have made and reports this information to the credit bureaus.
Your Extra debit card will appear on your credit report without a credit limit. And your purchases will be reported as part of your monthly payment history.
This means that the Extra debit card is helping you build credit by improving your payment history and credit mix.
Pros of the Extra Debit Card
The Extra debit card offers its customers many advantages, especially when it comes to building up their credit history.
Below are 4 key benefits of using the Extra debit card.
Helps Build Credit
The key benefit of the Extra debit card over a traditional debit card is the ability to help you build credit.
At the end of every month, Extra reports your purchase activity as payment activity to the credit bureaus. This tradeline and it’s corresponding payment activity will help you build up the various aspects of your credit score.
As an added bonus, there is no hard inquiry like there is for credit applications, so you can avoid that new account credit ding. And because they don’t report a credit limit, it won’t affect your credit utilization.
You Won’t Get You Into Debt
Since the Extra card operates like a debit card, you can’t go into debt with Extra.
Extra looks at the transaction history on your bank account as well as your current balance to help set a spending limit for your Extra card. This extra step helps ensure that you always have enough funds in your checking account to pay for your purchases.
Your payment activity is reported to the credit bureaus, but thanks to automatic payments, you can never actually carry a balance on your Extra credit card.
No Credit Check Needed
The Extra debit card does not require a credit check. So even if you have bad credit, it won’t hold you back from getting approved.
This is good news for your credit as a hard inquiry can negatively impact your credit score.
Also, no credit check means you almost everyone who signs up receives approval (so long as Extra supports your banking institution, you are an adult, and a few other basic requirements).
No Security Deposit Needed
Unlike a secured credit card or loan, there is no deposit necessary with the Extra debit card.
As you make purchases using the card, the money for each purchase is pulled directly out of your linked checking account.
Extra keeps a close eye on your transaction and income history to help set you a spending limit which ensures you always have enough money in your checking account to cover your Extra card purchases.
This automatic withdrawal of cash for purchases and the set spending limit means that Extra doesn’t need you to fork over cash for a security deposit just to ensure you are able to pay your bill.
Cons of Extra Debit Card
While the Extra debit card can help you build credit, there are a few downsides to the card, such as the annual fee and inability to use the debit card at the ATM.
Below, we explore these two issues fully and how you can manage these drawbacks.
Doesn’t Report Payments to TransUnion
Extra will report your payment activity every month to the credit bureaus Experian and Equifax. But they don’t report to TransUnion.
So unfortunately your credit report and scores from one of the major credit bureaus won’t be improved from using Extra.
To use the service Extra provides, you will need to pay a monthly subscription fee.
For the base month-to-month subscription plan, the fee is $7 per month. But if you would like to upgrade to the plan that earns you 1% back on all of your debit card purchases, the fee is $12 a month.
Or you can pay as a lump sum annual fee for a discount, $84 for the basic and $108 for the rewards card.
To cover the extra cost of the upgraded/rewards plan annually, you would only need to put $6,000 in spending through the card each year if you are paying for it monthly. This is $500 per month.
So, if you plan on spending more than $500 per month through their card, the rewards plan should be worth it to you.
It is important to note that the monthly fee is the only fee that Extra charges, you can never incur late fees, overdraft fees, returned payment fees, or any other additional fees.
Can’t Use It to Pull Out Cash At an ATM
The one significant downside to using the Extra debit card is that unlike a regular debit card issued by a bank, the Extra card does not let you pull out cash at the ATM.
You can only use the Extra card for debit card transactions that you would normally make by swiping a debit or credit card. This includes in-store purchases, utility bills, and more.
To make a cash withdrawal at the ATM, you will need to use your bank-issued debit card instead.
Requirements for Applying to Extra
The key requirement for applying for an Extra card is that you have a bank account that Extra supports. They currently support linking to accounts issued by 10,000 different banks in the US.
Additionally, you’ll need to have a (non-PO box) US address and be at least 18 years old. They also require that you provide your Social Security number or ITIN. You must also have a US or Canadian-based bank account.
That’s it! There is no credit check. The approval process is simply one where they verify your personal information including name, bank account, social security number, etc.
There is no cash deposit like there is for a secured card or prepaid debit card, and since there are no brick and mortar Extra financial institutions, you’ll want to be familiar with online banking.
Is Extra Legit?
Yes, the Extra debit card and the parent company behind it (Thingy Thing Inc) are legitimate. The Extra debit card has been on the market for just over 1 year now.
With Extra being on the market for such a short period of time, they have not yet been accredited by the BBB, nor do they have any reviews on the BBB’s website.
When looking at reviews on external sites (like Facebook), many of their customers do report success with using the Extra card to help them build credit. And most of the negative responses center around the fact that Extra does not always work with everyone’s bank account.
Their Apple app has a 4.6-star rating on the app store, and Extra features many of these reviews on their website. Many of those reviewing the app have seen their credit scores improve in as little as a month.
The Android app for Extra is still in development.
Is the Extra Debit Card a Good Idea?
If you are looking for a straightforward way to build credit without the risk of going into debt, then the Extra debit could be the perfect tool.
Because the Extra card reports like a credit account but operates like a debit card, you are in no way punished for your spending habits.
If you spend a lot, or only a little, your activity is still reported to the credit bureaus and your credit utilization rate from this card won’t hurt your score.
And since there is no hard inquiry and no deposit required to open an account, the Extra card is a good resource for those who currently have no credit history.
All of the features of the Extra card combined make it a worthwhile resource for people trying to improve their credit. This includes if you have with bad credit, no credit, bankruptcies, and more.
We highly recommend the Extra debit card as a good resource for those looking to build credit.
Paying for everything with cash or a debit card is a great way to stay out of debt, but it is unfortunately not a good way to build credit.
If you are trying to build credit, you usually have to resort to a credit card or a loan, but the Extra debit card offers you an alternative. Spend only the cash you have in your checking account; no taking on unnecessary debt and build your credit at the same time.
Considering this, the Extra debit card can be a useful tool for the right customer who is trying to build their credit.
Amanda Garland is a personal finance blogger living in Dallas, TX. 10 years ago she was living paycheck to paycheck and knew nothing about how credit works. She learned some hard lessons in her fight for financial stability. Now she has a friendly competition going with her husband to see who can reach a credit score of 850 first. She is also a poet, having obtained a Bachelor of Fine Arts degree in Creative Writing.