Many people often ask us, ‘how does a debit card actually build your credit?’, which is a great question, considering that it’s never been done before. Let's take a closer look at how Extra does it:
The first thing to understand is the relationship between your Extra debit card and your available Spend Power.
When you connect your bank account to Extra you’re given a spending limit based on your bank balance and other factors, this is your ‘Spend Power’.
When you swipe your Extra Debit Card, you’re spotted for that purchase using your available Spend Power and automatically pay ourselves back the next business day.
At the end of the month, transactions made with your Spend Power (via the debit card) are totaled up and report them to credit bureaus as credit worthy payments.
Just to recap: Your Extra Debit Card is what gives you access to your Spend Power, and the payments made with your Spend Power is what gets reported to the bureaus and contributes towards building your credit.