Avant Credit Card review: A decent choice if you have nowhere else to turn

-Disclosure: If you are charged interest, the charge will be no less than $1.00. Cash Advance Fee 3 percent, Min: $10

-Avant branded credit products are issued by WebBank, member FDIC

The Avant Credit Card is an unsecured credit card designed for someone with a fair or average credit score or a limited credit history. While it requires no deposit and can help you build credit with responsible use, it doesn’t offer many other benefits.

On the plus side, the Avant card’s initial credit limit beats out the limit of a few other unsecured cards for people with less-than-perfect credit. Plus, if you use the card responsibly, you may be able to increase your credit limit over time, which can help your credit utilization. The card also comes with no deposit requirement and you can even see if you’re preapproved for the card without a hard credit inquiry, allowing you to get a sense of your approval odds without negatively impacting your score.

But the card does potentially come with a steep annual fee of up to $59 depending on your creditworthiness. Cheaper alternatives are out there if you’re willing to temporarily tie up money in a security deposit. A secured card could give you more control over your credit limit and help you fast-track your credit-building efforts. Plus, some secured and unsecured options offer an ongoing rewards program if building credit isn’t your sole focus.

All in all, the Avant Credit Card could make sense if you struggle to qualify for a cheaper, more rewarding credit-building alternative. If you use the card responsibly and manage to boost your score, you can then apply for a more lucrative cash back or rewards card.

Quick highlights

• Rewards rate: N/A
• Welcome offer: N/A
• Annual fee: $0 to $59, depending on your creditworthiness
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 29.49 percent (variable)

Current welcome offer

There’s no current sign-up bonus or welcome offer with the Avant Credit Card. Although this is the case with most starter or credit-building cards, it’s still disappointing considering the card carries an annual fee. 

Sign-up bonuses are not entirely unheard of on cards available at this credit level. The Discover it® Secured Credit Card, for example, not only earns 2 percent cash back at gas stations and restaurants on your first $1,000 in combined spending per quarter and 1 percent back on everything else, but it also matches all the cash back you’ve earned at the end of your first year. Since that card charges no annual fee, you could actually make money while building credit with responsible use. The Avant Credit Card offers no wiggle room since there’s no way to save on purchases to offset the card’s annual fee.

Rewards rate

The Avant card doesn’t earn rewards, which could make it a good fit for someone who just wants to focus on building credit. As long as you pay your bill on time and in full every month to avoid heavy interest charges, the Avant card can help you build credit and eventually qualify for cards with better features.

The Avant Credit Card comes with only a few additional features, which isn’t surprising. It’s designed to help cardholders who have no credit history or a middling credit score build their credit with a credit card. It’s an unsecured card that reports to all three national credit bureaus and charges no foreign transaction fee. Plus, the issuer may take into account more than just your credit score (such as your bank account balance) when evaluating your application.

No foreign transaction fees

The Avant Credit Card charges no foreign transaction fees, making it a fair choice for cardholders who plan to spend abroad. Many cards charge you a fee that is around 3 percent of each transaction you make overseas, including some of the best credit cards on the market. While it may not be a game-changer if you’re on the fence about which credit-building card to go with, it’s certainly a tick in favor of the Avant Credit Card.

No security deposit

Unlike secured credit cards, an unsecured card like the Avant card does not require a security deposit upfront. While these deposits are refundable when you close your account, they can be a roadblock if you don’t have much cash on hand or would rather avoid tying up money for several months.

The Avant Credit Card does not require a security deposit, starts with credit limits as low as $300 and its annual fee is between $0 and $59, depending on your creditworthiness. Outside of the convenience of potentially accessing a line of credit without a deposit and a $0 annual fee, the Avant card falls short of perks like score monitoring and access to credit reports, which can be vital to building credit. But it does include some accessibility in the application process and will report your use to the three major bureaus.

Pre-qualify with only a soft pull

You can check if you prequalify for the Avant card without recording a hard credit inquiry on your credit report. While it’s no guarantee of approval, preapproval or prequalification gives you a sense of your chances before you put your credit score at risk by applying. To see if you have good odds of approval, try out the prequalification tool on Avant’s website or use Bankrate’s CardMatch tool to see if you are a fit for the card based on your credit profile.

Reports to major credit bureaus

As cardholders use the Avant Credit Card, their payment history and credit utilization are reported to the major credit bureaus. By keeping credit utilization ratio low and making payments on time and in full, cardholders can potentially boost their credit scores, establish positive credit history and qualify for more lucrative cards down the line. While reporting to all three bureaus is the bare minimum you should expect from a credit-building card, some lower-tier cards only report to one or two bureaus.

Proactive credit increases

Avant also includes proactive credit increases, letting you know when you qualify for a higher credit limit. This, like your initial limit, will be based on your creditworthiness and an analysis of your current debt, income and credit history. 

Avant states it "may periodically review your account for credit line increases." This isn’t as reassuring as other cards like Capital One’s credit-building cards, which all guarantee automatic reviews for credit line increases in as little as six months. But this is still a helpful feature. A low credit limit can hinder the credit-building progress for people who spend close to their credit limit each month. More breathing room will help you keep your credit utilization low.

The variable APR for both purchases and cash advances with the Avant Credit Card is 29.49 percent, which is quite high compared to the average credit card interest rate. You’ll definitely want to avoid carrying a balance if possible. There’s also a cash advance fee of 3 percent of the cash advance amount or $10, whichever is greater, and the card carries late fees of up to $39.

There’s an annual fee of up to $59 (depending on your creditworthiness) with this card. So it’s worth looking into other unsecured cards for fair credit before applying. Other cards that don’t charge an annual fee and are open to people with fair credit include:

• Capital One Walmart Rewards® Mastercard®
• Upgrade Cash Rewards Visa®
• Capital One Platinum Credit Card

Since the Avant card doesn’t offer rewards, charges a high variable APR and could potentially charge an annual fee, it may not be your first choice for a credit-builder card. Even though there are unsecured cards that could be a better fit, you may even want to consider secured cards before applying for the Avant card. Here are a couple of alternatives to consider. 

Avant Credit Card vs. Discover it® Secured Credit Card

If you are looking for a credit-building card, that doesn’t mean you cannot earn rewards–or rule out secured cards. In fact, there are several secured options that are more rewarding than unsecured cards available for those with a limited credit history. Our top contender among those options, the Discover it® Secured Credit Card, offers 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, unlimited 1 percent cash back on all other purchases and a unique welcome offer—all cash back you’ve earned during your first year will be matched, dollar for dollar  at the end of your first year.

This card is a great choice for beginning credit builders as it doesn’t charge an annual fee, forgives cardholders for the first late payment (up to $41 after that) and waives foreign transaction fees. On top of that, the card comes with a low intro APR of 10.99 percent on balance transfers for the first six months in case you’re moving to a new card (then a 27.74 percent variable APR; plus a 3 percent intro balance transfer fee, 5 percent after the date in your application). Discover, known for its award-winning customer service, will also begin reviewing your account after seven months to see if you qualify for an unsecured credit line. On another note, the Avant card does not require an initial deposit, but the Discover it® Secured Credit Card will take your deposit ($200 to $2,500) and use that as your credit limit until you qualify for it to be refunded.

Ultimately, the Discover it® Secured Credit Card proves to be a less expensive and vastly more rewarding short-term credit-building card that doesn’t even require a credit history to boot. Unless you can’t tie up money for a security deposit upfront (which could already grant a better credit limit than the Avant card) or you don’t want to wait at least seven months for an unsecured credit line, then the Discover it® Secured Credit Card is likely a better card.

Avant Credit Card vs. Capital One QuicksilverOne Cash Rewards Credit Card

While the Avant Credit Card is a useful tool for those with credit-building as their sole focus, the Capital One QuicksilverOne Cash Rewards Credit Card can offer that plus a high-earning, yet simple rewards program for responsible spenders. This card offers unlimited 1.5 percent cash back on all purchases in the form of a check or applied as a statement credit. Plus, its $39 annual fee could offer savings if you find yourself at the higher end of the Avant card’s scale.

On the other hand, the QuicksilverOne also provides the chance to increase your credit limit starting at your sixth month once Capital One automatically reviews your account for positive credit usage. Avant may increase your limit as well, but they don’t offer a specific timeline for this feature.

Both cards do not charge foreign transaction fees. However, it’s important to consider that the QuicksilverOne carries a 29.99 percent (variable) APR. If you think you may need to carry a balance occasionally, neither card is a great option. But unlike the Avant card, the Capital One QuicksilverOne’s noteworthy cash back value may more than offset the card costs for many cardholders–which can be a hard deal to find among subprime cards.

Best cards to pair with the Avant Credit Card

If you’re focused on building credit, you will want to steer clear of adding rewards cards to your wallet too quickly. These cards may require additional effort to maximize rewards earnings and take away from the goal at hand, especially if the rewards spending may entice you to spend outside your means and accrue unnecessary debt.

When you apply for credit cards, keep in mind it can negatively affect your credit score because there’s an inquiry into your credit history. Also, opening too many accounts at once may negatively impact your score. If your goal is to build up your credit score with a card, be mindful of how many cards you’re applying for at once. You should try to get prequalified before applying to a card you may not qualify for.

When you’ve earned a good credit score, you might want to consider upgrading to another card if your Avant credit card carries an annual fee. However, if you qualified for no annual fee, holding on to your Avant card can help boost your credit score by extending your average credit history.

The Avant Credit Card won’t be a great fit for everyone who still has to build their credit. It comes with a high APR and an annual fee that could get as high as $59. Plus, this card’s lack of a rewards program could also be a hurdle to some, as multiple secured and unsecured alternatives offer rewards opportunities in addition to their credit-building features.

But while it isn’t the cheapest option (a secured card will almost certainly be a better deal if you can afford to tie up money in a security deposit), the Avant Credit Card is a decent starter card if you need an unsecured card and struggle to qualify for better options.