5 Things to Know About the Varo Credit Card

It encourages responsible credit use and keeps penalties pretty light if you happen to slip up — which with this card is hard to do.
Profile photo of Jae Bratton
Written by Jae Bratton
Lead Writer
Profile photo of Kenley Young
Edited by Kenley Young
Assigning Editor
Fact Checked

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

The Varo Believe Secured Credit Card, issued by the online bank Varo, shares many similarities with other cards intended for consumers who want to build or rebuild their credit. Its closest relative may be the Chime Secured Credit Builder Visa® Credit Card. Like that card — also aimed at beginners — the Varo credit card doesn't have an annual percentage rate, or APR; features no annual fee or minimum security deposit; and doesn't conduct a hard credit check when you apply. Those features can save you money and spare you from losing points from your credit score, which often happens after a hard inquiry

The Varo Believe Secured Credit Card is designed to ward off overspending and missed or late payments, and it's even possible to earn rewards. However, the safeguards built into the card may feel restrictive and even overbearing to some. 

Here are five things to know about the Varo credit card. 

1. You need a Varo bank account to get the Varo credit card

There's no fee for setting up a Varo bank account, but it's still a hoop you'll need to jump through. And while there's also no security deposit required for the Varo credit card itself, you're only eligible to get one if your Varo account has received direct deposits of at least $200 in the past 90 days. Deposits from an employer or the government count; transfers from peer-to-peer apps like Venmo do not. 

If your Varo bank account meets these requirements, you’ll be invited to apply for the Varo Believe Secured Credit Card in the Varo Bank app.

2. You set your own credit limit, to a point

To use the Varo Believe Secured Credit Card, you’ll have to transfer money from your Varo bank account to your Varo Believe secured account, which can only be done in the Varo app. The amount in the secured account becomes your credit limit. 

But unlike a traditional credit card, the Varo credit card imposes spending caps. You'll be limited to $2,500 per day for purchases and $1,000 per day for cash advances, and the total of purchases and cash advances cannot exceed $10,000 per billing cycle.

One big purchase, such as new furniture, could put you over the spending limit and would require you to use another payment method if you needed to buy something else on the same day. 

3. Making credit card payments can be foolproof

The balance in your Varo Believe secured account is your credit limit, but it's also the funding source for credit card payments. To ensure that you'll always have enough money to pay your monthly bill in full, Varo automatically deducts the amount of any credit card transactions from the available balance in the secured account. That way, it’s impossible to overspend with the Varo credit card. Varo also locks your card if you miss a payment and won’t restore access until the entire balance is paid off. 

To ensure timely payments, Varo offers a "Safe Pay" option. With Safe Pay enabled, balances are automatically paid in full at the end of the billing cycle. 

Because the Varo credit card reports to all three major U.S. credit bureaus, these measures can benefit cardholders who are building or repairing a credit history. Remember: Payment history is a major factor in credit scores. However, such hand-holding is typically absent from traditional unsecured credit cards. If and when you upgrade from the Varo Believe Secured Credit Card to a traditional card, know that you’ll likely need to be more conscientious about paying off your monthly statements. (The secured product is the only credit card that Varo offers, so there's no upgrade path within its portfolio.)

4. The APR is 0%

Even if you miss a credit card payment, your balance will not grow due to interest because the APR on the Varo Believe Secured Credit Card is 0%. That’s an incredibly rare, potentially money-saving perk and one of the highlights of this card.

But again, it's not how traditional credit cards work. So when you're ready for an upgrade from the Varo credit card, make sure you know your new card's APR.

5. You can earn cash back on select purchases

The Varo Believe Secured Credit Card earns cash back in two different ways: online offers and card-linked offers. Varo’s online offers — akin to a credit card bonus mall with a traditional credit card — award cash back from purchases at retailers that you’ve accessed through the Varo app or through a promotional email from Varo.

Or you could use a card-linked offer to get cash back, which functions like a coupon. Card-linked offers must be activated first, and the purchase must be made with your Varo credit card to qualify for the discount. 

Cash back is automatically deposited into your Varo bank account once you’ve earned more than $5. Cash-back earnings with the Varo Believe Credit Card are capped at $50 per month, whereas other secured credit cards offer unlimited cash back and generally don't require that you shop through a specific portal or activate individual offers.

Card art courtesy of Varo.

Chime says the following:

  • The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.

  • To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime® Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

  1. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2022 and October 2022 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

  2. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

  3. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

  4. Out-of-network ATM withdrawal and OTC advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer.

Find the right credit card for you.

Whether you want to pay less interest or earn more rewards, the right card's out there. Just answer a few questions and we'll narrow the search for you.

Get Started
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.