Current Build Card: Plenty of Perks for Credit Newbies

The Current Build Card — from the financial technology company Current — is similar to other recent alternative credit cards promising low barriers to entry for those with bad or limited credit.

Issued by Cross River Bank, the card does have a lot going for credit newbies. It doesn’t require a credit check or a minimum security deposit, and there's no annual fee. There's no annual percentage rate (APR) either, so your risk of getting into debt is slim to none. The card also offers the ability to earn rewards. That's an impressive combination.

However, the Current Build Card also comes with the same kinds of drawbacks that are particular to alternative cards backed by fintechs. It currently reports to only one credit bureau, and it lacks perks that can be found in more traditional secured credit cards from major issuers.

Current Build Card: Basics

Card type: Secured and alternative.

Annual fee: $0.

Sign-up bonus: $0.

Rewards: 1x to 7x, depending on the merchant.

APR: N/A.

No minimum deposit required

You must open a Current account before applying for the Current Build Card. Funds transferred into the Current account become your security deposit, and thus your credit limit, for the card. But unlike traditional secured cards, which typically require a $200-$300 security deposit upfront to open the credit account, the Current Build Card doesn’t have a deposit minimum.

No credit check required

A hard credit pull isn’t required to get the Current Build Card, so potential cardholders don’t have to worry about a temporary loss of points to their credit scores when they apply.

No APR

After you make a purchase with the Current Build Card, Current automatically holds the amount of that transaction, decreasing your amount of available credit. In this way, Current Build cardholders can’t spend beyond what they can afford to pay, a crucial difference from unsecured cards.

In fact, the Current Build Card works like a charge card, not a credit card. There's no APR because you literally can't carry a balance month to month.

» MORE: “Debt-proof” credit cards lower some barriers but raise their own

It earns rewards

The Current Build Card earns rewards, but there are some caveats that dictate how much can be earned and where:

• To earn rewards, you need to opt in within the card’s mobile app. 

• Rewards can be earned in-store and online at participating merchants such as Gap, Sam’s Club and Auntie Annie’s. A map of participating merchants as well as their reward rates can be found in the app. 

• Rewards rates vary from 1x to 7x, depending on the merchant.

Points can be redeemed within the app, and cash back to your Current account is the sole redemption option. Points are worth 1 cent each. The minimum redemption amount is 100 points, or $1.

Limited credit bureau reporting

The Current Build Card reports to just one of the three major U.S. credit bureaus: TransUnion.

That's not ideal because different lenders may review reports from different bureaus when they're evaluating your credit in the future. Even if you’ve used the Current Build Card responsibly and made on-time payments, a lender won’t be able to see that good credit history if they pull a report from Equifax or Experian — which may ultimately result in a denial for more credit.

No upgrade path

Current doesn’t have an unsecured card that Current Build Card holders can graduate to after responsible use. Instead, when cardholders are ready for an unsecured card with better benefits, they’ll have to apply for a card from another issuer.

That's a common drawback among fintech cards in Current's class, and it's compounded by the fact that these cards may leave you unprepared to manage a traditional unsecured credit card — a product that dispenses with the guardrails and has high interest rates, along with an assortment of potential fees.

If you're seeking a starter credit card with an upgrade path, consider more traditional secured cards from major issuers. The Capital One Platinum Secured Credit Card, for example, might grant you a $200 credit limit with a lower initial deposit if you qualify ($49, $99 or $200, depending on your credit). Or with the Discover it® Secured Credit Card, which requires a $200 security deposit, you get ongoing rewards on all purchases, not to mention a sign-up bonus. And both of those cards have potential upgrade paths to better products within their issuers’ respective portfolios.

» MORE: NerdWallet's best starter credit cards

Hidden fees can add up

While the Current Build Card has a $0 annual fee, you might incur other fees with this card, including the following:

• Out-of-network ATM fee: $2.50 per transaction.

• Late payment fee: 3% of the total outstanding balance.

• Foreign transaction fee: 3% of the total transaction amount.

• Card replacement fee: $5 per card ($30 for expedited delivery).

• Cash deposit fee: $3.50 per deposit. 

The card's terms also mention the possibility of "third-party processing fees."

The Current Build Card could be an ideal fit for those who can't afford a traditional upfront security deposit of hundreds of dollars, or who don't want to tie up that money for months on end. And some of its guardrails — including no hard credit inquiry and no APR — could appeal to those who are looking to bolster their credit or avoid the temptation to overspend.