Avant Credit Card review
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-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 Overview
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—though not the highest you’ll find on a starter card—beats out the limit found on a number of 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 its annual fee is reasonable—less than half the fee you’ll find on many unsecured credit-building cards. 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.
However, cheaper alternatives are out there if you’re willing to temporarily tie up money in a security deposit. Indeed, 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 will offer an ongoing rewards program if building credit isn’t your sole focus.
All in all, the Avant Credit Card mostly makes sense as a temporary stop-gap while you work on your credit. 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.
What are the pros and cons?
- Charges an annual fee ($0 to $59, depending on factors such as your creditworthiness) that can be higher than alternative cards
- Unlike rival cards with lower costs, this card offers no rewards program
- Doesn’t offer specific credit-building features like competitors do, such as an increased credit limit after an automatic account review
- More rewarding, lower-cost cards are available with fair credit
A deeper look into the current card offer
- 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: 28.74 percent (variable)
Current sign-up bonus
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. While this card has a relatively low initial cost of ownership, requiring no deposit and carrying reasonable fees given it is an unsecured product, a sign-up bonus or ongoing rewards would boost its value considerably.
Sign-up bonuses are not entirely unheard of on cards available at this credit level, either. 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 such wiggle room, since there’s no way to save on purchases to offset the card’s annual fee.
Other cardholder perks
The Avant Credit Card is designed to help cardholders who have no credit history or a middling credit score build their credit with a credit card, so while it can be useful in that way, you shouldn’t expect much in the way of perks and cardholder benefits, which is fairly common for cards in this category. That said, the card 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.
How the Avant Credit Card helps build credit
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. This is a great feature on any credit card, especially a secured option like this. A low credit limit can really hinder credit building progress for users who spend close to their credit limit each month. More breathing room will help you keep your credit utilization low.
Rates and fees
The variable APR for both purchases and cash advances with the Avant Credit Card is 28.74 percent, which is quite high compared to the average credit card interest rate. You’ll definitely want to avoid carrying a balance with the Avant card.
There’s an annual fee of up to $59 (depending on your creditworthiness) with this card, which, though not ideal given there are a few no-annual-fee alternatives like the Petal 2 “Cash Back, No Fees” Visa® Credit Card, is reasonable for an unsecured credit-building card. Some comparable, unsecured credit-building cards charge double or even triple that amount, with many hiking these fees after your first year.
Meanwhile, there’s 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.
How the Avant Credit Card compares to other credit building cards
If you need to build up your credit score and have no credit history or a poor credit history, a secured credit card will often be your best bet. While you’ll have to tie up money in a deposit, you can get it refunded when you close or upgrade the account. If you’re set on an unsecured card, however, there are a few credit-building options worth considering.
Avant Credit Card vs. Capital One QuicksilverOne Cash Rewards Credit Card
There are several unsecured cards for building credit on the market, and they may not charge as high of an annual fee—or none at all. However, be sure to check the terms before applying for hidden fees and other red tape that could sway your decision.
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 28.49 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.
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 by the end of your first year will be matched to essentially double your first year’s rewards.
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 26.74 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 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 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’s) or you don’t wait to wait at least seven months for an unsecured credit line, then the Discover it Secured is likely a better card.
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 developed 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.
Bankrate’s Take — Is Avant Credit Card worth it?
Since the Avant Credit Card is designed for those with no credit history or a less-than-ideal score, there’s a low barrier of entry for this card. And though it may charge an annual fee, it can be relatively low compared to many other unsecured cards for someone with damaged credit or no credit history. 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.
While it certainly may not be 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 that you can use to build credit with responsible use. Ultimately, though, it should be little more than a stop-gap on your way to lower-cost, more valuable cards.