Step Banking Review: Savings and Credit Building for Teens

• Step Overview
• How Does Step Credit Builder Work?
• How To Sign Up For Step Credit Builder 
• Step Credit Builder Pros and Cons 
• Step Frequently Asked Questions

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Earn 5.00% on savings

$0

None

No Credit

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available for users under 18
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No minimum deposits
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Reports payments to all three bureaus
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No interest
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Rewards on purchases
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Early pay days

• con icon Two crossed lines that form an 'X'. No phone customer support
• con icon Two crossed lines that form an 'X'. Cannot deposit cash or checks into account
• con icon Two crossed lines that form an 'X'. Low ATM withdrawal limits
• con icon Two crossed lines that form an 'X'. No reported payments before customer turns 18

• Step is helping the next generation build credit even before they turn 18 with no monthly subscription fees, no account minimum fees, no overdraft fees, and no in-network ATM fees across 30,000+ ATMs.
• Step is a secured credit card that has a dynamic credit limit that is attached to the bank account balance -- it operates like a debit card but it is a credit card, which is what enables the unique credit building feature.
• 18 year olds who used Step for 7+ months earned an average Credit Score of 725.
• Step reports your credit history to Experian, Equifax, and TransUnion. Once you opt in, Step reports up to 2 years of your history.
• Security you can trust: banking services are provided by Evolve Bank & Trust and FDIC-insured up to $250,000. Powered by Visa with built-in fraud protection and Zero Liability guarantee for unauthorized charges.
• Earn cashback rewards: get money back for shopping with your Step Visa Card at qualifying merchants — places you know and love. New offers are added every month.
• Get your paycheck earlier: users can set up direct deposit and get their paycheck up to 2 days earlier than if they were to use a traditional bank or get their check in the mail.
• Investing: Step allows the next generation to start investing in stocks & ETFs even before they turn 18 with as little as $1, with no commission fees or monthly subscription fees and a simple and straightforward investing platform. Step will provide guidance with education and supportive resources to help the next generation learn how to best manage their money. They’ll learn how to invest earlier in life, getting a headstart on their financial future while time is on their side with customizable risk tolerance buckets to align their investment strategy with their goals.

The average credit score of those ages 18 and 25 was 679 in 2022, the lowest of all age brackets, according to Experian data. Young adults and teenagers often lag behind older consumers simply because they lack the time necessary to build a good credit score.

If you're a teenager, young adult, or the parent of someone in that age range, consider looking into a Step bank account, which can help teens and young adults get ahead in their financial journey. Step also offers a credit-builder Visa Card, which easily competes with the best credit builder loans.

Learn more about how Step can set your children up with a  improve your credit score, how to sign up, and whether it's the right product for you.

Step Overview

Founded by financial industry veterans CJ MacDonald and Alexey Kalinichenko, Step is an all-in-one mobile banking app that provides young teens and adults with the financial tools they need to make smart money decisions early in life. According to Step's website, its mission is to "improve the financial future of the next generation."

While Step is not a bank, its products and services are provided through its FDIC-insured partner, Evolve Bank & Trust. In other words, up to $250,000 of your deposits will be protected in the unlikely event that the company goes belly up.

Not only does the Step app allow you to invest in securities like Bitcoin and earn 5.00% APY on your savings, but it also helps boost your credit score. With the secured Step Visa Card — essentially a credit card with training wheels — you can safely build up a positive credit history by only spending what you have in your deposit account.

Like a traditional credit card, Step will report payments to the credit bureaus, contributing to your credit history. You can also earn rewards when you use your card. However, Step doesn't charge interest on monthly payments, so you don't run the risk of mounting debt like a traditional credit card.

How Does Step Credit Builder Work?

Unlike traditional secured credit card that requires you to make monthly payments on your purchases, the Step card functions more like a debit card. After opening your Step account, you'll be asked to make a deposit. Then, with the app's Smart Pay feature, your card purchases are automatically paid off each month using the funds available in your deposit account. So, if your Step account only has $250, you can only spend $250.

Since you're only allowed to spend the amount you've deposited into your account, it's impossible to overspend.  You also won't miss a payment because all the purchases are already paid for with the money in your account and Step doesn't charge interest on your balance. So it's unlikely that the Step Credit Builder lowers your credit score.

If you're 18 and older, you can opt into the credit reporting feature to boost your credit score and build your credit file when you use the Step Visa Card. You can do so by selecting "Account Management" in the account information section, then clicking "Credit Reporting" and choosing "Opt-In." Once you've done that, Step will start reporting your positive credit history to the three major credit bureaus — Experian, Equifax, and TransUnion — on a monthly basis.

While the basic Step Visa Card is currently the company's only option, Step has a waiting list for its premium Step Black card. While the Step Black card will come with a subscription fee of $99 a year, the benefits could make up for it. With this card, you can receive up to 8x points on everyday purchases, earn 5.00% APY on balances up to $1 million, and unlock over $250 in annual perks. However, if the $99 subscription fee is outside your budget, opt for the free basic version that could still boost your credit. 

How To Sign Up For Step Banking

You can sign up for the Step Visa Card by heading to the company's website and clicking the "Get Started" button on the top right corner of the screen. Anyone in the United States can open a Step account since there's no age requirement. But if you're under 18, you'll need a parent or guardian to sponsor your account. Once you turn 18, you can turn on credit reporting through the Account Management page.

Also, though Step doesn't perform a hard credit pull when you sign up for an account, you'll need to provide your US phone number and SSN to help Step verify your identity. 

Once you've created an account, you'll immediately receive a virtual Step Visa Card to start building credit. This digital-only card comes with its unique card number, and you can use it online or add it to your mobile wallet to purchase items in-store. Step will also send you a physical card, which should arrive in your mailbox within 14 to 21 days after opening your account.

Step Banking Pros and Cons 

Step boasts various features, making it one of the most popular banking solutions among teenagers and young adults. That said, Step is not without its downsides. Consider the following pros and cons before opening an account. 

Step Banking Pros 

Available to users under 18: The Step Visa Card is one of the few banking products that allow you to start building a positive credit history before you turn 18. And once you're 18, you can opt in for Step to report your positive credit history to the three credit bureaus.

Credit builder reports to all three major credit bureaus: Some credit builder cards on the market only report your information to one or two of the major credit bureaus, but Step sends your positive credit history to all three. 

Zero interest charges or fees: The Step Visa Card has zero monthly fees, in-network ATM fees, interest charges, or account minimum fees. Plus, because you can't spend more than what you have in your account, you aren't at risk of paying pesky overdraft fees. 

Earn rewards: The Step Visa Card also offers cash back points on certain purchases like dining, entertainment and charitable donations.

No minimum deposit required: There is no minimum balance required for the Step card, making it easy for you to sign up for an account and start building your credit. 

Step Banking Cons

No customer support via phone: Step's lack of phone support can be inconvenient if you prefer having someone walk you through your issues instead of sending back-and-forth emails or messages. 

Low ATM withdrawal limit: Because Step is primarily a teen banking platform, you can only withdraw up to $250 from an ATM within 24 hours and up to $1,000 within 30 days. So, while Step allows you to withdraw money from their network of 30,000 ATMs for free, its low withdrawal limit can be a deal breaker. 

Can't deposit money through an ATM: Another one of Step's downsides is that you can't add money to your account through an ATM. Instead, you'll need to link a debit card from another bank account to your Step account, set up direct deposit with your employer, or transfer funds from Venmo, Cash App, or Paypal. 

No prior payment history reported: Some credit-building accounts geared toward teens and parents, like FreeKick, will be able to report up to two years of prior payments when the account holder turns 18. Step doesn't offer this feature. 

Step Frequently Asked Questions

You can reach Step's customer service team at hello@step.com or by starting a live chat with them from the mobile app. They're available from 6 a.m. to 9 p.m. PST Monday to Friday and 6 a.m. to 6 p.m. PST on the weekend. Unfortunately, Step currently doesn't provide phone support. 

Step reports your credit history to the credit bureaus every month, so you most likely won't see an immediate bump in your credit score after creating a Step account. But, as long as you use your Step card regularly, you'll see a positive impact on your credit over time.

Yes, you can cancel your account by starting a chat with Step's team in the app. Keep in mind that if your account is reporting your payments to the credit bureaus, you could hurt your credit by closing your account.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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