Reviews

Extra Debit Card Review (2022): Can It Build Your Credit?

Extra Debit Card Review - Featured
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Extra claims to be “the first debit card that helps build credit.” This Extra debit card review will dive into exactly what that means, who Extra is best for, and the alternatives worth considering.

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Extra acts like a credit card that automatically pays off your balance 24 hours after a purchase. Extra monitors your bank account balance and only allows you to spend what you can afford, so there's no interest or late fees. At the end of the month, Extra reports your total spending to Experian and Equifax, which can help you increase your credit score. Since you're limited to only making purchases you can pay off, Extra is a good fit for people who want to increase their credit score but have trouble controlling their spending or have yet to establish credit.

Pros:
  • No credit check required.
  • Prevents overspending while building credit.
  • Fast customer service response times.
Cons:
  • Your initial “Spend Power" limit is only provided after you sign up.
  • Only reports to Equifax and Experian (not TransUnion).
  • To earn reward points (Extra's version of cash-back), you have to opt for the $12 per month premium plan.

How the Extra Debit Card Works

Extra is different from both a credit card and a debit card in a few important ways.

  1. Extra syncs with your bank account and only allows you to spend what it thinks you can afford. This is called your Spend Power. Transactions that Extra determines would put you over your Spend Power are declined.
  2. Purchases made with your Extra Card are deducted from your bank account the next day. Essentially, it acts like a debit card in this respect because you can’t spend more money than you have available.
  3. Your Spend Power is determined in part by your available checking balance. At first, it’s a small percentage of the funds in your account. Over time, Extra increases your Spend Power based on both your available funds and your transaction history. The more you spend with your Extra debit card, the more your Spend Power can increase. 
  4. Extra reports your credit limit as the highest available Spend Power you achieved over the course of the preceding month
  5. Your credit utilization resets daily. If you keep your daily spending to less than 30% of your highest available Spend Power, Extra will report a favorable credit utilization ratio each month.
  6. Extra reports to both Equifax and Experian at the end of the month. It doesn’t report to TransUnion.
  7. There’s a monthly fee. Extra has two plans: “Credit Building” and “Credit Building + Rewards.” For $8 per month (or $84 per year), the Credit Building plan gives you access to the Extra debit card. For $12 per month, you can also earn rewards on your purchases.
  8. Rewards can only be used at the Extra Store. For every $1 you spend with your Extra debit card, you earn five reward points worth roughly 1 cent each. Points can be redeemed for physical goods, gift cards and discounts at various merchants.

Key Facts About the Extra Debit Card

Here are answers to some of the most common questions about the Extra debit card.

Does Extra check your credit?

No credit check is pulled when opening an Extra account.

Can you get denied for the Extra debit card?

While you can’t get denied for the Extra card, there are some eligibility requirements. Specifically, you must be 18 years of age, have a valid Social Security or ITIN number, have a U.S. address, and have a U.S.-based bank account.

Is it a big deal that Extra doesn’t report to TransUnion?

It’s common for lenders to not report to all three major credit bureaus. In Extra’s case, they don’t report to TransUnion but do report to Experian and Equifax. Experian is the largest credit bureau, and where banks like Capital One and Chase often go first when pulling your credit report.

For lenders such as a landlord or auto dealership that may exclusively pull your credit report from TransUnion, this can be a problem. However, this is rare and can likely be resolved if you request your Equifax and Experian reports be pulled instead.

Also, remember that credit builder cards like the Extra debit card are not the best long-term solutions. While they’re helpful for building credit, you should work towards getting a quality credit card from one of the major banks, as these cards offer better rewards and often provide higher credit limits (which is better for your credit utilization ratio).

How is Extra different from secured credit cards?

A secured credit card requires you to place a deposit that serves as your credit limit, while Extra links to your bank account and sets your Spend Power based on your available funds. 

Also, with a secured card, the amount of the security deposit you make is reported to the credit bureaus. Therefore, if you can only make a $200 deposit and you carry a $100 balance, you’re at a 50% credit utilization rate. This is above the recommended 30% and can hurt your credit score.

With Extra, since the credit limit is based on your highest available Spend Power for the month, you’re less likely to run into this problem. Still, keeping daily spending below 30% of your monthly limit is important for maintaining a good credit utilization ratio.

One advantage secured cards have is that they’re more upfront in how they work. Instead of a Spend Power number being issued to you, you know exactly how much you can spend and whether you’re keeping your credit utilization rate below 30%. 

A second advantage of owning a secured card is that it’s often possible to upgrade to a traditional credit card provided by the same card issuer after a period of on-time payments. This is an important benefit because it allows your credit history to stay intact when upgrading. 

With that said, many secured card users have issues with running up their deposit balance because these cards invite overspending. Additionally, many secured credit cards are marketed to people with poor credit — a fact their issuers use to justify sky-high interest rates and (often) a hefty annual fee.

Can using the Extra debit card hurt your credit score rather than help it?

If the Extra debit card — which has a monthly fee — is the first credit account ever listed on your credit report, you may be in a tough spot when, in the future, your credit has improved and you no longer want the card (and the associated fee).

Part of your credit score is determined by the age of the accounts on your credit report. So while canceling the card will save you the monthly fee, it may also hurt your credit score because your oldest credit line will show up as closed.

This is where tools that allow you to understand your score, such as Credit Sesame, come in handy. See our Credit Sesame Review to learn more.

When does it make sense to upgrade to the Extra Credit Building + Rewards plan?

At first, Extra’s rewards program sounds like a solid feature for those trying to build credit, as rewards are rarely offered to this target market. However, you’re paying an additional $4 monthly to earn these rewards.

Extra rewards can only be used at the Extra Store. For every dollar you spend, you earn five points, and five points are worth about 1 cent. The Extra Store offers a collection of gift cards, discounts to various merchants, and a limited selection of physical products (like AirPods, which they mention a lot in their marketing).

If you spend $400 with your Extra card each month, you’ll earn the equivalent of $4 in rewards. That also means that cashing in for a $200 pair of AirPods requires $20,000 in spending. And remember: you’re paying a $4 per month fee the entire time you’re building up your point balance. 

I’d take a pass on the rewards. Instead, if you think Extra is the right fit for you, focus on the credit-building aspects. Then, in just a few months, you may build your credit enough to get a true rewards credit card from a major bank.

Who is Extra’s banking partner?

Many financial startups that offer banking services are not banks themselves. Instead, they are software companies that partner with banks and help facilitate transactions that provide value to users. This is true for Extra, which isn’t a bank itself but partners with Evolve Bank and Trust to facilitate transactions.

Does Extra charge an overdraft fee or an ATM fee? 

No, because unlike a traditional debit card, you cannot use the Extra debit card to withdraw cash at an ATM (or at a register terminal). Additionally, there’s no overdraft fee because you can’t spend more than you have available in your linked checking account (thus making it impossible to overdraft). 

Extra Credit Builder Competition and Alternatives

Here’s how Extra stacks against other similar credit building products.

Extra vs. Chime Credit Builder

Chime’s Credit Builder credit card is one of the most popular credit builder products and a direct competitor to Extra.

How it works is:

  1. To qualify, you must sign up for a Chime checking account and have at least $200 of qualifying direct deposit within the last 365 days.
  2. You transfer funds from your Chime Checking account to a separate Chime Credit Builder secured account. You can spend up to the balance of your Chime Credit Builder secured account via an issued debit card.
  3. Your balance is paid automatically from your Chime Credit Builder secured account at the end of the month.
  4. Chime reports on-time payments to all three major credit bureaus. They do not report credit balance or credit utilization.

Overall, it’s ideal to have both on-time payments and a favorable credit utilization ratio reported to the credit bureaus. Extra reports your credit utilization ratio, which is a rather sizable advantage. If you need to establish credit as fast as possible, Extra makes more sense.

However, seeing that Chime has no fees, it’s a good option for someone just starting to establish credit who doesn’t foresee making any purchases with debt for some time.

Extra vs. Cred.ai

Cred.ai offers a very similar product to Extra, which makes it all but impossible to overspend using your card while still reporting to the credit bureaus.

For more information, see our Cred.ai review.

To summarize, the differences between Extra and Cred.ai are:

  • Instead of syncing with your existing bank account, Cred.ai requires you to open a checking account. Your spending limit is set by how much you carry in your Cred.ai checking account.
  • Similar to Extra, Cred.ai declines transactions that you can’t pay back based on the balance in your account.
  • There are no monthly membership fees for Cred.ai.
  • Cred.ai reports to all three major credit bureaus.

Overall, Extra’s main advantage over Cred.ai is the simplicity of not having to open and transact in a new bank account. Credi.ai’s advantages are that it reports to all three major credit bureaus and has no fees.

Pro tip: Your credit mix — i.e., the types of credit you have — comprises 10% of your FICO score. It’s best to have a mix of revolving credit (such as credit cards) and installment credit, which are loans paid on a fixed schedule (such as a mortgage or auto loan). If you’re looking to increase your credit score and only have a revolving credit line, one strategy is to take out an installment loan. Credit Strong (see our Credit Strong review) is a company that issues credit builder loans to help optimize your credit mix. These loans complement what Extra provides and are worth looking into for anyone with a sizable upcoming purchase who would benefit from improving their credit score quickly.

Extra Debit Card Review: Final Verdict

Extra’s specialty is helping you build credit with guard rails in place. If you’re looking to establish your credit, have a less-than-stellar credit report or have struggled to pay off your credit card balance in full in the past, the $8 monthly fee may be worth it in order to have positive credit history reported to all but one major credit bureau. 

Just remember that this is not an ideal long-term solution. Instead, your goal should be to get a credit card with no annual fee and a solid cash-back rate after you’ve built credit history and increased your credit score enough to qualify.

To learn more about Extra, visit their website.

R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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