At a Glance

A debit card is a valuable tool for managing money and quickly making purchases. However, many people may not be aware that their bank may also enable them to build credit using the same card. A debit card linked to a checking account can act as a bridge toward establishing a better credit score.

Some banks offer services that report debit card activity to the major credit bureaus, and some even offer reward points when customers use their cards in specific ways. It’s essential to check with your particular bank to find out what benefits and options they have available when it comes to building credit with a debit card.

In this article, you’ll learn:

What are debit cards, and how to use them?

A debit card is a payment card that allows you to make purchases by drawing on funds you have already deposited in a bank account. When you use a debit card, the money is transferred from your account to the merchant’s account. Unlike credit cards, debit cards do not allow you to borrow money.

To use a debit card, you first need to have an account with a bank or credit union that issues debit cards. You will receive a card with a unique card number, expiration date, and CVV code. To make a purchase, you simply swipe or insert the card into a card reader, enter your identification number (PIN), and the purchase amount will be deducted from your account. Some debit cards can also be used for online or mobile payments.

It’s important to keep track of your account balance and transactions so that you do not overdraw your account and incur fees. Additionally, you should protect your card and personal information to prevent fraud.

Debit Card vs. Credit Card

Debit cards and credit cards are both types of payment cards, but they work in different ways.

Debit cards are linked to a checking or savings account and allow you to make purchases by drawing on funds you have already deposited. When you use a debit card, the money is transferred from your account to the merchant’s account. No interest or credit line is associated with a debit card, so you can only spend what you have in your account.

Credit cards, on the other hand, allow you to borrow money up to a specific limit, known as a credit limit. When you purchase with a credit card, the money is borrowed from the credit card issuer, and you will be required to pay it back over time, along with interest. Credit cards also have rewards, cashback, and other benefits.

Debit cards allow you to spend your money, while credit cards allow you to borrow money from the issuer. Debit cards are generally less risky than credit cards because you cannot overspend and incur debt. However, credit cards offer more benefits, such as rewards, cashback, and purchase protection.

When should you use a debit card over a credit card?

You should use a debit card over a credit card when you want to pay for something with funds that you currently have available in your checking or savings account rather than borrowing money. Additionally, using a debit card can help you stick to a budget since you can only spend what you have available.

On the other hand, there are several reasons why you might choose to use a credit card over a debit card:

  • Building credit: Using a credit card responsibly and making payments on time can help you build a positive credit history, which can be beneficial when you apply for loans or other credit in the future.
  • Rewards: Many credit cards offer rewards such as cash back, points, or miles for purchases, which can be a great way to save money or earn perks.
  • Protection: Credit cards often offer purchase protection, which can help you if the item you bought gets stolen or damaged.
  • Emergency funds: Credit cards can provide emergency funds in case of unexpected expenses, while debit cards are limited to the available balance in the account.
  • Convenience: Credit cards are widely accepted and make it easy to make purchases online or while traveling, while debit cards may not be accepted everywhere.

It’s important to remember that credit card debt can be dangerous, so using credit cards responsibly is essential as always paying off the balance in full each month.

Do debit cards affect your credit scores?

Debit cards do not directly affect your credit scores. Debit cards are linked to your checking or savings account and allow you to spend money you already have, while credit cards are a form of borrowing, and the balances you carry on credit cards can affect your credit scores.

Your credit scores are based on the information in your credit report, which is maintained by the three major credit bureaus (Equifax, Experian, and TransUnion). Debit cards are not reported to the credit bureaus, so using a debit card will not impact your credit scores.

However, if you have a history of mismanaging your checking or savings account and incur overdraft fees or have your account closed, it might be reported to ChexSystems, a consumer reporting agency that collects data on checking and savings accounts and can be used by financial institutions to decide whether to open a new account for you.

How can you build credit with a debit card?

It is not possible to build credit directly with a typical debit card, as debit cards are not reported to the credit bureaus and do not have a credit limit. However, there are a few ways you can indirectly build credit with a debit card:

  • Secure credit card: Some financial institutions offer a secured credit card, which requires a deposit as collateral and can help you build credit by reporting your activity to the credit bureaus.
  • Authorized user: You can become an authorized user on someone else’s credit card account, and their payment history will be reported on your credit report. However, ensuring that the primary cardholder has a good payment history is vital.
  • Rent reporting: Some landlords and property management companies report rent payments to credit bureaus. You can ask your landlord if they do so and pay your rent on time.
  • Utility payments: Some utility companies report payments to credit bureaus. You can ask your utility companies if they report payments to credit bureaus and make sure to pay your bills on time.

It’s also important to note that having a checking or savings account and maintaining it responsibly can be a positive factor when applying for credit. When making lending decisions, financial institutions look at your overall financial profile, including your banking history.

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Which debit cards can help you build credit?

Some financial institutions offer credit-builder debit cards that work similarly to a secured credit card. The card issuer will report your account activity to the credit bureaus, which can help you build credit.

It’s important to note that these debit cards are not widely available, and not all financial institutions offer them. Also, even if you have one of these debit cards, you still need to use it responsibly, so make sure you always pay on time and keep your balances low.

A personal line of credit from Grain is a loan offered by the company that allows you to borrow money as needed, up to a specific limit. It works similarly to a credit card, where you have a credit limit, but you only pay interest on the amount you borrow and not the entire credit limit. You can access the funds by writing checks or using a debit card linked to the line of credit.

One of the main advantages of having a personal line of credit is that you can use it as a source of emergency funds or to cover unexpected expenses without the need to reapply each time you need funds. Additionally, like with credit cards, having a personal line of credit can help you establish a credit history if you use it responsibly and make payments on time.


Yes, getting a debit card without a bank account is possible. There are several options available:

  • Prepaid debit card: You can purchase a prepaid debit card, which is not linked to a bank account, but you can load money onto it and use it to make purchases or withdraw cash.
  • Government-issued debit card: Some government programs, such as unemployment benefits or child support, offer a debit card for recipients to access their funds.
  • A reloadable debit card from a check-cashing store: Some check-cashing stores offer reloadable debit cards, which allow you to load money onto the card and use it to make purchases or withdraw cash.
  • Virtual debit card: Some payment apps, like PayPal or Venmo, allow you to create a virtual debit card, which you can use to make online transactions.

Prepaid debit cards and government-issued debit cards may have fees, such as activation fees or monthly maintenance fees, so always carefully read and understand the terms and conditions of the card before moving forward.

The limit on a debit card is usually determined by the amount of money you have in your linked checking or savings account. If you want to increase your debit card limit, you can try the following:

  • Increase the balance in your linked account: The more money you have in your connected account, the higher your debit card limit will be.
  • Request an increase from your bank: You can contact your bank or credit union and ask if they can increase your debit card limit. Some banks may require you to have a particular account balance or credit score to be eligible for a higher limit.
  • Open a new account: If your current bank cannot or will not increase your limit, you may consider opening a new account with a different bank that offers higher limits.
  • Get a credit card: A credit card will have a credit limit independent of your checking or savings account balance and can help you make large purchases in an emergency.

It’s worth noting that some banks may not increase your debit card limit, or may only do so under certain conditions, so it’s essential to check with your bank or credit union before taking action.

Improving your credit score takes time and effort, but here are a few things you can do to get started:

  • Pay your bills on time: Late payments can hurt your credit score. Make sure to pay all of your accounts on time, including credit card bills, loan payments, and utility bills.
  • Keep your credit card balances low: High credit card balances can indicate that you are overextended and may be a risk to lenders. Keep your credit card balances at or below 30% of your credit limit.
  • Limit new credit applications: Every time you apply for credit, it shows up on your credit report and can lower your credit score. Try to limit new credit applications to only what you need.
  • Check your credit report: You can get a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year. Review your credit report for errors and dispute any inaccuracies.
  • Keep old credit accounts open: The length of your credit history accounts for 15% of your credit score. Keeping old credit accounts open, even if you don’t use them, can help your score.
  • Seek credit counseling if you are in debt: Credit counseling can help you create a budget, negotiate with creditors, and develop a plan to get out of debt.

Improving your credit score is a long-term process; it may take several months or even years to see significant improvement. It’s also essential to avoid “credit repair” companies claiming they can remove negative information from your credit report, as many companies are scams.

Learn more: How to build and improve credit