Extra Debit Card Review - What to Know
In the modern world, nothing is more important than building a good credit score. Good credit helps you apply for the things you need to survive in life.
Need a house? Need a car? You’ll need a great credit score!
It’s rare that we can afford to buy things as expensive as these outright, and this is how credit can help.
However, sometimes it can be difficult to build credit - especially if you’ve never had credit before or you’ve previously affected your credit score negatively.
Therefore, you may need to consider options that aren’t the “usual” credit building methods and one of these is an Extra debit card.
Our helpful guide below details exactly what an Extra debit card is, how it works and how it may benefit you - along with what we think about the card.
Read on to learn more!
Also read: 11 Best Personal Finance Books
What Is An Extra Debit Card?
In normal circumstances, if you want to build your credit score, you’d have to apply for credit in a formal manner. Typically, this would be through applying for a credit card or loan and managing it responsibly.
Every month, if you were to continue the payments on time and not default, your credit score would benefit positively and increase.
However, this doesn’t work for everyone. As we mentioned previously, some people are unable to apply for credit in this manner due to having a minimal credit history or previously having defaulted on their credit agreement.
Additionally, applying for credit will apply a hard search onto your credit file which can be detrimental if you are unsuccessful.
The Extra debit card means you can avoid all of these potential drawbacks by reporting any payments that may be creditworthy to credit bureaus.
As it is not a credit card though, you do not need to apply for it formally and therefore will see no negative consequences such as a hard credit check on your credit file.
Also read: 12 Best Finance Podcasts For Your Savings
But How Does It Work?
In essence, the Extra debit card works just like any other debit card but it will report your creditworthy payments directly, so you don’t even have to do any added work.
Also read: Cost Of Living By State In USA
Even though there’s no credit requirements to apply for this debit card, you do still need to meet these minimal requirements:
Be 18 years old or over
Live and reside in the United States
Have a bank account in the United States
Be able to provide a social security number or an individual taxpayer identification number
Signing up requires you to do this online and it’s pretty quick and simple if they can verify your identity - however, if they cannot, you may run into some trouble.
Having said that, they should be able to verify your identity another way.
Also read: How To Manage Personal Finances
Using The Card
After you’ve been accepted for the Extra debit card, you have to connect it with your usual bank account. You shouldn’t need to open another bank account for this.
After you’ve done this, Extra will give you a limit to spend which is normally slightly less than the amount you have in your account to begin with.
Then, anytime you make a purchase with the card - Extra essentially lends you that amount of money and then takes it automatically from your bank account within a couple of days.
Whilst this operates similarly to credit, it is not a credit card and will not increase or decrease credit utilization. This is because it can monitor all your transactions and how much money you have in your account.
At the end of the month, Extra will work out how much you’ve spent and the purchases you’ve made and then report these to the major credit bureaus - over some time, this will improve your credit score.
If you want to get the most out of Extra though, you may decide you want to upgrade and use their additional paid service known as the Extra rewards.
All this does is provide reward points for your purchases which can generate gifts or discounts on things, however they are not exactly clear on what these rewards might be.
Also read: Independent Contractor Pay Stub
You can’t get something for nothing with this card unfortunately, so even using the card’s most basic features, you will need to pay a subscription. The costs are:
Credit building = $7 a month
Credit building and rewards = $12 a month (annual payment includes a discount equivalent to paying $9 a month)
Canceling Your Card
Unlike the initial application, canceling the Extra card is not that easy. You cannot do this online so you’ll need to call the main office. You can see the number on the back of the card.
Is The Extra Debit Card A Good Idea?
When you assess the pros and cons of this card, there are clear benefits for certain people but most people would likely benefit more from using a credit card responsibly.
Let’s take a look at these in more detail.
Pros: Choosing The Extra Debit Card
The first thing we have to address is of course the fact that almost anybody can apply for this card.
If you’ve had a poor history of credit or no credit history whatsoever, you can benefit from using this card.
As the card reports your transactions to credit bureaus, you will likely see an improvement in your credit score. This means that in the future, you should be able to apply for credit formally and possibly get a better rate of interest.
This includes things like credit cards, personal loans, hire purchase agreements and mortgages.
Moreover, you won’t suffer any adverse effects from applying for this card because there is no hard check. Additionally, as there is no risk of carrying a balance due to the way the card works, you cannot overspend.
As a result, paying interest or additional fees is not a problem. However, as we have seen - there are some drawbacks to this card.
Cons: Choosing The Extra Debit Card
The initial problem we see with this card is that you have to pay for it. Whilst you can argue that the costs aren’t astronomical, nobody wants to pay for the right to use their own money.
Additionally, the rewards program is very vague and it can be confusing to see what exactly you’re getting for the extra costs each month.
However, perhaps the biggest drawback that we can see is the fact that this card may take a long time to build your credit, particularly when it comes to comparing the card with traditional credit cards.
If you can manage your credit card responsibly, you will see a much better improvement in your credit score over time than using the Extra debit card.
Not just this though, there are plenty more options for improving your credit score over time. We will look at some of these alternatives next.
Alternative Ways To Build Credit
Other than traditional credit like credit cards or personal loans, there are many ways you can build your credit score.
The first we must mention is mainly speaking to those who have multiple credit debts. You can benefit your credit score and reduce your overall debt if you look at a 0% balance transfer credit card.
It means you can avoid paying interest payments, normally for a set amount of time like 9 months. If you can pay off the debt in this time, you will not pay any other interest.
Other than this, you may benefit from taking out a debt consolidation loan and pay this off in monthly installments.
This not only allows you to reduce your monthly payments, but your credit score will boost due to multiple debts being paid - along with providing regular monthly payments.
However, you may choose to use:
Experian Credit Boost
This is a free service that allows you to get a boost to your credit score. All you need to do is link your bank account to your Experian account.
They will assess any regular payments and see if any are creditworthy to give your score a boost for the month. To get the most out of this service, you need to keep allowing Experian access to your bank account every month.
Sesame Cash Credit Builder
Sesame offers a credit boosting debit card which does not charge you for using it. Every month, much like Extra, they will report creditworthy payments to the credit bureaus.
So - Is The Extra Debit Card Worth It?
We can see how many people may benefit from using this card, however we also believe that there are multiple alternatives that work in the same way that can benefit these people better and do not charge such high fees.
Additionally, it’s still much more beneficial if you can utilize credit traditionally.
The Bottom Line
Whilst Extra debit cards may help some, we believe there are better alternatives out there. However, it will always be down to you to decide.
Our pay stub maker is a simple way to generate pay stubs online and it is very user-friendly.