“A credit card spending experience.”
Those are words you don’t hear from Chase, American Express and Bank of America. And that’s intentional, because what cred.ai offers is different from the competition.
In this cred.ai review, I’ll simplify what the company offers, answer common questions, and help you decide if the new “credit card spending experience” they promise is good branding or a worthwhile product.
cred.ai is a worthwhile card for consumers who want to build credit without fear of going into debt. The cred.ai Unicorn Card feels like a debit card, but gets reported as a credit card to the three major credit bureaus. Unlike alternatives, cred.ai also reports both on-time payments and credit utilization, allowing for a greater positive impact on your credit score.
- Prevents you from spending more than you can pay back.
- Reports both on-time payments and credit utilization rate.
- Can be used at over 55,000 ATMs for free.
- Guarantees you will never pay fees or interest.
- Card doesn’t offer cash-back or have a reward points program.
- No interest is earned on the cash held in your deposit account.
cred.ai Overview
If you’re brand new to what cred.ai offers, here’s a breakdown:
- cred.ai’s core offering is a combination of a credit card (called the Unicorn Card) and an FDIC-insured checking account.
- The spending limit on the Unicorn Card is set by how much money is in your cred.ai checking account, so the card feels more like a debit card than a traditional credit card.
- So why not just call it a debit card? With this setup, credi.ai is able to report both on time payments and your credit utilization to all three major credit bureaus, the same as a traditional credit card does.
- cred.ai doesn’t wait until your payment due date to pay off the card. Instead, it uses the funds in your cred.ai checking account to pay down the balance throughout the month. As a result, cred.ai reports a very low credit utilization rate to the three credit reporting bureaus; users report having a 3% or less credit utilization rate.
- You will never pay fees for the card, or any interest on balances owed. This isn’t because it’s a 0% APR card but because the way the card functions prevents you from spending more than you can pay back.
- There’s no minimum FICO score required to apply.
- You can choose to sign up only for the Unicorn Card and not the bank account. In that case, the Unicorn Card acts like a traditional credit card, with some of the extra features we’ll mention below and an APR that will vary depending on your credit score.
cred.ai FAQ
Before we get into cred.ai’s features, let’s answer some of the common questions about the cred.ai Unicorn Card and the cred.ai checking account.
cred.ai sounds like a secured credit card. What’s the difference?
Secured credit cards — where you deposit a certain amount of money onto the card, and then can spend up to that deposit amount — have been around for a while, and they help people build credit.
Along with some unique features of cred.ai that we’ll discuss below, some of the key differences between what cred.ai offers and secured credit cards are:
- You can spend up the utilization rate of a secured credit card, while that’s not possible with cred.ai.
- Many secured credit cards report very low credit limits (e.g., $500) while cred.ai will report $1,500.
- It’s still possible to miss payments with a secured credit, while cred.ai handles this for you.
We go into more detail about the differences later in the article.
What are the terms of the credit card?
cred.ai will report a $1,500 credit limit. But, don’t confuse this $1,500 limit with how much you can spend — $1,500 is what cred.ai reports to the credit bureaus.
The amount you can spend is determined by how much money is in your deposit account. cred.ai will limit you to only spending what you can pay back (i.e., how much money is in your deposit account).
It’s like a fail-safe credit card, right?
Yes. As hard as you may try, you can’t get yourself into financial trouble with the credit card combined with the deposit account. If you try to spend more money than you have, cred.ai will deny the charge. While you don’t get bells and whistles of other cards, like cash-back rewards, it’s useful in that it can build your credit score without the risk of incurring debt.
Can you be denied?
While a credit score isn’t required for the cred.ai card, you can still be denied for a credit card.
Can you use the Unicorn card as an ATM card?
Yes. You can use a Unicorn card as an ATM card. cred.ai offers free ATM withdrawals from over 55,000 ATMs across the U.S. You can locate nearby ATMs in the app.
ATM withdrawals are classified as cash advances. However, similar to purchases made, you will not pay interest on these cash advances. Instead, the money you have in the deposit account will pay these off.
Is cred.ai a bank?
No, they’re a software company. The bank account and credit card is issued by Wilmington Savings Fund Society, FSB (“WSFS Bank”). The credit card is issued by WSFS Bank through Visa.
Is direct deposit required?
No, but not enabling direct deposit will limit some features cred.ai offers, like the ability to access your paycheck ahead of time. You’ll also have to constantly replenish your card cred.ai account if you wish to continue to use the card.
Is the credit card only — without the connected checking account — worth it?
Not really. While cred.ai has some unique offerings, a modern app and no annual fees, the credit card has no cash-back rewards. The terms are not great either, at 17.76% APR on purchases and 24.99% APR on cash advances.
cred.ai’s product is geared towards those who want to build or optimize their credit score without changing their daily spending habits, or are looking for a high-tech debit card replacement. There are better credit cards out there for people not in this demographic.
cred.ai Unique Features
With an understanding of what’s at the core of what cred.ai offers, let’s discuss some of cred.ai’s unique features.
- Flux Capacitor. Link your direct deposit to your cred.ai account and Flux Capacitor will enable you to access not only your paycheck but any future deposit up to two days early, as well as help you budget for upcoming debits.
- Stealth Card. Similar to how one-time use credit card providers like Privacy.com work (we discuss this in our Swagbucks hacks article), cred.ai will give you a working credit card number and CSV code you can use on websites you don’t trust. So, if the website got hacked, your credit card information wouldn’t be able to be reused.
- Cred Optimizer. This is the technology that manages payments from your deposit account to your credit card, so you’re getting reported a low credit utilization rate each time.
- Check Please. Authorize a transaction ahead of time, such as a restaurant charge, with cred.ai to avoid getting it declined. In a way, avoiding the embarrassment from any declined transaction.
- Friend & Foe. Allows you to approve or deny certain transactions. You have the option of selecting merchants to approve and deny. Ideal for those pesky subscriptions you’re finding it impossible to cancel.
- High Security. The ability to create pockets of time where all or certain transactions will be approved or denied.
cred.ai vs. Secured Credit Cards
If you have poor credit and need a quick boost in your credit score, cred.ai is most likely your best option. Cred.ai reports $1,500 to the credit bureaus, while secured credit limits tend to run much lower. All other factors being equal, the higher credit limit will provide more positive impact to your score.
But if you have a longer time horizon — like when you have no credit history, or when you want to turn around poor credit history for potential reasons that are six months or more in the future — then my preference would be a secured credit card.
The best secured credit cards, such as the Capital One Quicksilver Secured Cash Rewards Credit Card, come with no annual fees and allow you to earn unlimited 1.5% cash-back. Most importantly, you can upgrade your card down the line, switching from a secured credit card to a traditional credit card.
Traditional credit cards come with higher limits and pay more cash-back, and upgrading allows you to keep your credit history intact.
The average age of your credit lines is an important metric for scoring models. By upgrading to a traditional card from a secured card (which Capital One allows after you’ve proven to use your card responsibly), you keep your oldest lines open and active in the future.
In contrast, if your cred.ai account is the oldest credit line on your report, closing it would significantly decrease your score.
View the latest offers for secured cards.
cred.ai vs. Chime Credit Builder
Like cred.ai, Chime is a tech company that offers products through an FDIC-insured bank account. They have a similar offering to cred.ai, called the Chime Credit Builder credit card.
How the Credit Builder card works is that:
- To apply, you need a Chime spending account and $200 of direct deposits over the past 365 days. Direct deposits must come from an employer, payroll provider or benefits payer via ACH.
- Once approved, you can spend on your Credit Builder credit card up to the amount of money that’s secured in your Chime spending account. This money is held as collateral and cannot be withdrawn.
- Your balance on your Credit Builder credit card is paid off from the balance on your Chime spending account.
- While Chime reports on-time payments to the three major credit bureaus, they do not report credit utilization.
| cred.ai | Chime | |
| Direct deposit | Not required | Required |
| Annual fee | $0 | $0 |
| Reports on-time payments | Yes | Yes |
| Reports credit utilization | Yes | No |
| Early access to paycheck | Yes | Yes |
While Chime takes a similar, fail-safe credit card approach — making sure you can’t overspend and that payments are made on-time — there’s a limit to how much of an impact it will have on your credit score as it only reports on-time payments.
All things being equal, you’ll see a quicker boost to your credit score using cred.ai as your credit utilization rate also improves with the product.
For an in-depth look at how Chime works, read our Chime review.
cred.ai vs. Extra Debit Card vs. Credit Strong
Extra offers a credit building “debit” card with a dynamic spending limit that’s linked to the funds available in your primary checking account. This limit is referred to as “Spend Power,” and is reported to Equifax and Experian (but not to TransUnion).
The major difference between cred.ai and Extra is that the latter has a hefty $8 per month fee (or $12 per month if you opt for the plan that offers reward points).
Learn more about how it works in our Extra debit card review.
Credit Strong offers three different credit builder loan products. One is their “Instal” product, which allows you to add a $1,000 installment loan to your credit report for a cost of $15 per month. Consider Credit Strong if you want to diversify your credit mix with an installment loan.
Read our Credit Strong review to learn more.
Is the cred.ai Credit Card Right For You?
cred.ai is really a fail-safe way to start building your credit. If you’ve struggled with debt in the past or have been unable to build up your score, cred.ai is a solid overall product offering. The key is using the combination credit card and deposit account.
As a standalone credit card, cred.ai doesn’t have a lot to offer. While there are no annual fees, there’s no cash-back and the card carries a high APR.
So let me see if I understand;
I deposit, say, $1000 in my Cred.AI Account
I then charge dinner with the card for $900. Credi.AI Pays it. But I only have ‘access’ to $900. Then CrediAI takes $100 out of my Credi.AI account on a specific date to pay off the charge?
If so this means I can simply replace my ATM card with Cred.AI and make all my standard purchases yet they get treated as charges and credit history?
When you deposit $1000 in your Cred.AI account and charge dinner for $900 with your Cred.AI card, cred.AI will deduct the $900 from your account balance to pay off the charge. Leaving $100 left. This deduction happens quickly because they’re trying to keep your utilization rate low.
You can now only spend a maximum of $100 moving forward, so you’d need to replenish your account if you want to continue to use it.
Please let me know if that answers your question.
So i applied for the discover it card and was denied. I don’t have bad credit (i mean i checked and it doesn’t seem like it) and I’ve never had a credit card before. I have really good financial habits and won’t over spend but i have a lot of student loans so maybe bad debt to credit ratio? Ive Always paid on them on time. So what’s my best option to build credit?
Hi Ria,
Thank you for sharing your situation. It can be frustrating to be denied a credit card, especially when you feel like you have good financial habits. Here are some thoughts on your situation.
Firstly, you are correct that most banks prefer to see a high credit score for the major cards, I looked, and this suggested credit score is 670 or higher for the Discover It. If you’re still in school and have yet to start making payments on your loans, your credit score won’t be as high as you might hope, as you don’t have that payment history to demonstrate responsible credit usage.
One option is to see if you can become an authorized user on a parent’s account. If they have a high credit score and good credit history, being added as an authorized user can help boost your credit score.
If you cannot become an authorized user, consider getting a card from a lender specializing in helping people build credit, such as cred.ai. However, since you have good financial habits, my choice would be secured credit cards, and then transition that card to an unsecured one once you’ve got the required score.
Regardless of your choice, making payments is the most important thing. Consistent, responsible credit usage is the key to building a strong credit score. If you do this, you should see a good bump in your score in six or so months, which will open up more credit options for you in the future.
Best of luck!
I’m still trying to wrap my brain around this. A few questions I have;
1. My credit score isn’t bad nor great, it’s right at the cusp. Is this card worth getting to build up my credit? I pay every bill on time, never missed a payment.
2. By unlocking its full potential of the unicorn card, you say you would need to connect your checking account. By that you mean, your main bank that you bank with, correct? Chase, BoA, etc.
3. If yes, above. I don’t necessarily, have to deposit my entire paycheck into cred.ai? I can set up a certain amount only? As I still want to use by existing debit card.
4. I can use my cred.ai card to pay other bills as long as I have the sufficient funds in checking account that’s connected to the card?
Thank you!
Hey Kevin,
1) If you’re doing things right, your credit score will improve over time naturally. If that’s the case, I’d much rather get a major bank credit card that you plan to keep long-term. All things considered, I like having a no-fee card from a major bank that pays decent rewards which you can keep long-term to lengthen your credit history. I think cred.ai is more for someone who tends to overspend and wants protections in place, which is a valuable thing to have.
2) To unlock the Unicorn Card’s full potential, you need to connect it to your main checking account. This connection allows cred.ai to monitor your spending and provide features like real-time balance updates, automatic bill payment, and spending analysis.
3) You don’t need to deposit your entire paycheck into your cred.ai account. You can choose to set up a certain amount to be transferred to your cred.ai account based on your needs and preferences. This way, you can still use your existing debit card for other transactions.
4) You can use your cred.ai card to pay other bills if you have sufficient funds in the connected checking account. The card works like a regular credit card so you can use it for various transactions and bill payments.
Hope that helps!
Essentially all I have to do is make a small deposit into the credit account and you will report a 1500 unsecured line of credit? Can the line of credit ever be increased?
Yes, you understood correctly. With cred.ai, you would deposit money into the connected checking account, and the spending limit on the Unicorn Card would be determined by the amount of money in your cred.ai checking account. Cred.ai will then report a $1,500 unsecured line of credit to the credit bureaus.
Unfortunately, there’s no way to increase the credit line they report.
I just wanted to let you know that that high apr you wrote about with the card doesn’t actually work that way. I have the card and they don’t actually charge you any interest. They just use that to report to the credit bureaus. But it doesn’t actually affect your money, just your score. It’s actually written into their fine print that you will never pay interest or fees and that if you somehow do, they will pay it for you.
Hey Ivy,
Thanks for the comment. When discussing the APR, I referred to the APR when someone doesn’t get a checking account and is just using Cred.ai as a credit card. In that case, it does have an APR (this is rare, but for people not interested in the connected checking account, I wanted to mention it).
I’m trying to under something here everywhere I check online it shows cred ai reports 1500 credit limit to the credit bureaus but when I check mine it only shows 1000 is there something wrong with that? Is my account too new ? Not sure why my is different from the claimed 1500
It’s possible that the credit limit difference you’re experiencing may be due to account-specific factors or your account being new. How long have you had an account for?
I have this card and account now, and the only thing I’m most confused about is the lingo of Debit/Credit. The money that I deposit in there, is used just like a regular checking account? When I spend it, it gets deducted, right? I’m just confused about “making payments”. There’s nothing that states when a payment is due or what fees are being “paid” and from where is that deducted? I’m a little confused about the entire thing and I don’t want to make any mistakes from not understanding. I’ve skimmed though all the policies and I just can’t exactly grasp the concept of this card.
Hey Kayla,
Yes, the cred.ai account functions like a regular checking account. When you deposit money and use the card, the amount gets deducted from your balance. There are no due dates for payments or interest fees as it’s not a traditional credit card.
Will I able to rent a car with this card? Meaning will they treat it as a normal credit card for incidentals and etc?
Yes you would, however, it would depend on the amount you have available to spend. Credit card companies are going to put a hold of around $100 to $300 (could be more depending on car/company/cost) on the card, and if that purchase gets denied because of the lack of funds you have in your cred.ai account, the transaction won’t go through. Some rental car agencies don’t accept secured cards altogether, so if you’re considering it: 1) Call ahead to make sure they accept secured cards and try to get an idea of how much they’ll charge on your card for incidentals 2) make sure you have enough funds in your account