The recently announced Varo Believe Card aims to help people who might not otherwise have access to credit the opportunity to build their credit score and establish a positive credit history. Read on to learn how it works, and whether it’s a good option for you.
There are a lot of starter credit cards designed to help you build credit – and that includes the recently-announced Varo Believe Card from Varo Bank.
Varo Bank is an all-digital bank that was initially founded to help people who might not have access to traditional banking services. The Varo credit card continues that mission by providing people who might not otherwise have access to credit the opportunity to build their credit score and establish a positive credit history.
That said, a lot of people may not be familiar with Varo Bank. You might have a few questions about Varo and what it offers. What is Varo? Are Varo reviews positive, or are customers unhappy with its services? Is Varo safe?
Let’s take a closer look at Varo Bank and the Varo credit card so that you can decide whether signing up for the Varo Believe Card is a good option.
What is Varo Bank?
Varo Bank was founded in 2015 as a way to give people who might have difficulty accessing traditional banking services the ability to open a checking account and use a debit card to make purchases.
Varo reviews are predominantly positive, with satisfied consumers praising the bank’s ease of use and lack of fees. Varo Bank received an “excellent” rating from Trustpilot and an A+ rating from the Better Business Bureau.
In 2021, Varo announced plans to release the Varo Believe Card – a credit card designed to help people build a positive credit history while avoiding interest charges and monthly fees. As of this writing, the Varo Believe Card is not fully launched; however, consumers who are interested in getting the Varo Believe Card when it releases can start the process by opening a Varo bank account.
How does Varo credit card work?
The Varo credit card is a no-fee, no-APR card that helps you improve your credit score while avoiding debt and interest charges.
Here’s how it works: Every time you use your Varo credit card to make a purchase, Varo will automatically withdraw money from your Varo bank account and transfer it to a Vault account. You can use the money in your Vault account to pay off your credit card balance in full every month – and if you want to ensure that your payments are always made on time, you can use Varo’s Safe Credit Builder tool to set up automatic credit card payments.
Is Varo a prepaid card?
Varo is not a prepaid card. It’s a traditional credit card, which means that any charges you make on your Varo Believe Card must be paid off at a later date.
That said, Varo makes it easy for you to pay off your Varo credit card balance. By automatically transferring money from your Varo bank account to your Vault account, Varo helps to ensure that you always have funds available to make on-time Varo credit card payments. These automatic transfers help you pay off your balance in full every month and stay out of credit card debt.
If you would rather apply for a prepaid card, take a look at our list of the best prepaid debit and credit cards.
Does Varo build credit?
Can you use the Varo Believe Card to build your credit history? Yes. Varo reports all activity on your Varo Believe credit card to the three credit bureaus (Experian, Equifax and TransUnion), which means that if you use your Varo card responsibly, it can help you improve your credit score and establish a positive credit history.
Plus, Varo makes it easy to make on-time monthly payments on your Varo Believe Card – which is one of the best ways to build your credit score. Use the money Varo transfers from your Varo bank account to your Vault Account to pay off your balance in full every month, avoid credit card debt and build a history of on-time credit card payments.
Is Varo safe?
Is Varo safe? Yes. Varo bank deposits are FDIC insured up to $250,000, and Varo uses industry-standard, 256-bit AES level encryption to keep your personal information secure and private.
If you suspect that someone is using your Varo bank account or your Varo Believe credit card fraudulently, contact email@example.com or call Varo customer service at 1-800-827-6526. Then, use the Varo app to lock your Varo credit and debit cards to prevent additional fraudulent transactions.
Should you sign up for Varo Believe?
If you are interested in building your credit with a credit card that requires no security deposit, charges no monthly fees and helps you pay off your credit card balance without additional interest, the Varo Believe Card might be a good option. Keep in mind that the Varo Believe Card is not fully launched yet, so if you’re looking for credit right now, you might want to consider other options.
While some people will benefit by signing up for Varo Believe, it’s always worth considering all of your options before choosing a credit card. If you want to earn rewards on every purchase, for example, ask yourself whether you might be eligible for a rewards credit card. The Varo credit card does not offer a traditional cash back, points or miles rewards structure, which might not matter to someone who is simply hoping to use Varo Believe to build their credit score and stay out of debt. It’s worth noting, though, that other credit cards might help you achieve the same goal while offering a few more benefits and perks.
Other credit cards to consider
If you are hoping to use a credit card to build your credit score or improve your credit history, start with our list of the best credit cards for people with bad credit.
The Discover it® Secured Credit Card, for example, is a credit-building card that offers rewards on every purchase: 2% cash back on gas stations and restaurants (for up to $1,000 in combined spending per quarter, then 1%) and 1% on everything else you buy. Plus, Discover will automatically match all of the cash back rewards you earn during your first year as a cardholder.
This card is a secured credit card, which means you’ll need to put down a small, refundable security deposit to access your line of credit. Discover will automatically review your account after seven months to determine whether you qualify to upgrade to a standard unsecured credit card.
If you haven’t started building a credit history yet, take a look at our list of the best credit cards for people with no credit. The Capital One Platinum Credit Card, for example, gives cardholders with limited credit experience the opportunity to practice responsible credit habits with a small initial line of credit. After six months, Capital One will review your account to determine whether you qualify for a higher credit limit.
The Capital One Platinum card doesn’t offer any rewards, but you also won’t need to pay a security deposit to access the card – which makes it a great option for people who want to get started with credit.
Although the Varo Believe Card has not yet fully launched, it has the potential to help people build their credit scores while staying out of credit card debt.
If you are interested in getting the Varo credit card in the future, you can sign up for a Varo bank account right now. Once the Varo Believe Card is fully available to the public, Varo will send invites to all bank account holders who are eligible to use the Varo credit card to improve their credit.