Do Debit Cards Help Build Credit?

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Debit cards can help build credit if responsible use leads to the bank offering a real credit card after a certain period of time. Learn how debit card usage is not reported to credit reporting agencies with information from a financial adviser in this free video on money management and debit cards.

Part of the Video Series: Credit Cards & Personal Loans
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Video Transcript

Hi. I'm Matt McMillen. I'm with Innovative Financial Group. Question that was posed to me today was do debit cards actually help build your credit. Yes and no. A debt charge is basically a charge or a Visa card, it's either a Visa or MasterCard that's tied directly to your checking account. So it's not really a true credit card that's unsecured where you have a credit limit and you can, you know, charge on it and then pay back small minimum payments. A debt card is just an easier way you an access your checking account funds, dollar for dollar, versus writing a check. It gives you the convenience of using it like a credit card. So debit cards do not report to the credit bureaus like regular traditional MasterCards and Visa. In that respect, it doesn't really help really help build your credit. Where it does help build your credit is that you are still managing in a financial account with your bank. Your bank is going to respect the fact that you're using your debt card. You're not going over your checking account limit. You can bounce on a debt card just like you can on a check. So if you continue to use your debt card responsibly, it probably would make it easier for you to go back to that bank and then maybe in turn, qualify for and get approved for a regular either Visa or MasterCard versus just a debit card. So in that respect, it will help build your credit. Again, my name is Matt McKillen and I'm with Innovative Financial Group.


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