Do Debit Cards Help Build Credit?

By Anton Behr

  • Overview

    There are many different ways to fix a poor credit situation. Credit cards, bank loans and other types of credit can all affect a credit report. While numerous types of cards may help to build credit, debit cards are a whole different sort. There are various reasons why debit cards cannot be used in the same manner as credit cards.
  • Debit vs. Credit

    Credit cards are given based upon a single line of credit. Each card has a different line of credit attached to it. In order to acquire a credit card, a person must have a decent credit rating. A person with a poor credit rating may not gain a card, or he may be stuck with a very high interest rate. A debit card (on the other hand) does not function based upon a line of credit. Instead, a debit card is directly linked to a personal bank account. Thus, the more money that is inside of the bank account, the more money can be spent by using a debit card.
  • Using Cards

    Some debit cards feature a major credit card company logo (Visa or MasterCard, for example). However, this does not mean that they are credit cards. Instead, major credit-card companies often partner with various banks in order to make using a particular debit card easier. For example, it is possible to use a Visa debit card in order to pay for a purchase. In this instance, rather than entering a personal identification number in order to make payment, a debit card receipt can be signed as if it were a credit card. Still, this does not make a debit card a credit card.


  • What Affects Credit?

    The only types of cards that can have a direct impact upon credit are actual credit cards. These must be acquired through a credit card application process. Aside from credit cards, monthly bills, lines of credit and loans all affect a credit report. As previously mentioned, a debit card cannot affect a credit rating in any manner. If you are seeking to raise your credit rating, the best possible option is a credit card that is paid in full every month.
  • Considerations

    In almost every instance, it is far better to pay for a purchase with money that you already have (i.e., "cash"). Since a debit card is directly linked to a private bank account, these cards can be very useful. Anyone that has a personal bank account can ask her bank for a debit card. The only warning associated with debit cards has to do with transaction fees. It is advisable to be fully aware of the number of transactions that are allowed during one monthly period. Some banks will charge an additional amount for using a debit card too much.
  • Checking Your Credit

    The best place to start when trying to improve your credit is finding out where you stand in the eyes of lenders. Pull your credit report from each of the big three credit reporting agencies, TransUnion, Equifax and Experian, and take note of any negative items. You can get a free credit report once a year from annualcreditreport.com.
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