Avant Credit Card Review: An Unsecured Card for Building Credit

Most experts recommend secured credit cards for building credit. But not everyone can afford the cash deposit to open a secured card. The Avant Credit Card is intended for people who want to build credit without putting down a deposit. Although it's a barebones card with few perks, it is a competitive credit-builder. Read our full Avant Credit Card review for all the details.

This credit card is a good fit for: Credit builders who want to avoid the deposit for a secured credit card.

Top perks

This card has a few perks that make it stand out from other credit-building cards.

An unsecured card with no deposit required

One of the Avant Credit Card's more appealing traits is that it is an unsecured credit card. This means you don't need to make a cash deposit to open an Avant Credit Card account if you're approved.

In contrast, many credit cards for bad credit or for people with no credit are secured credit cards. Secured cards require a deposit to open and maintain the account. This deposit is refundable if you close your account with a $0 balance and no outstanding fees.

Although the deposit is refundable, most secured cards require a minimum deposit amount that is higher than the Avant Credit Card's annual fee. So the Avant Credit Card will likely require less money out of pocket to open.

Check online to see if you're prequalified

It may seem counterintuitive, but applying for a new credit card can hurt your credit. That's because the credit card issuer will run a hard credit check. This is a complete look at your credit report and scores. Each hard credit inquiry is marked on your credit report and it can drop your credit score. The more hard inquiries you have, the more credit damage it can do.

The Avant Credit Card lets you check for prequalification before you fill out a full application. Prequalification uses a soft credit check instead of a hard check. Soft credit inquiries don't pull your full credit report, and they won't hurt your credit score. If you prequalify for an Avant Credit Card, there's a good chance you'll be approved if you apply. However, it isn't guaranteed.

No foreign transaction fees

One of the more unusual features of the Avant Credit Card is that it doesn't charge any foreign transaction fees. This is uncommon for credit-building cards, especially unsecured ones.

Basically, foreign transaction fees are charged by credit card issuers every time you use your credit card to make a purchase in a foreign currency. So, anything you buy that isn't in U.S. dollars. Transactions that go through a foreign bank could also be charged a foreign transaction fee.

Given that foreign transaction fees can range between 3% and 5%, they can get expensive fast. The Avant Credit Card's 0% fee could save you a lot of money if you travel abroad or shop online with a foreign retailer.

Read more: Best No Foreign Transaction Fee Credit Cards

What could be improved

This card has very limited features that leave it feeling sparse.

No rewards on purchases or welcome offer

A major drawback of the Avant Credit Card is that you can't earn any purchase rewards like cash back or rewards points. This is a big oversight, as many other credit cards earn rewards. You can even find great secured cards that let you earn rewards while you build credit.

On top of no rewards, there isn't a sign-up bonus, either. Many rewards cards will offer a lump sum of cash back or points for spending a certain amount on your card -- but not the Avant Credit Card.

Additionally, you won't receive any kind of intro APR deal. This means you can only avoid interest fees on your Avant Credit Card by paying your full balance before your due date each billing cycle.

Annual fee

The annual fee system for the Avant Credit Card can be very confusing, because you won't know your annual fee until you get an offer. If you're well-qualified, you may have a $0 annual fee.

However, some people may be approved for an Avant Credit Card but have to pay an annual fee of up to $59. Approved applicants who are required to pay an annual fee will be charged that fee as soon as they open their account.

Credit limits range from $300 to $1,000

As with the annual fee, the credit limit you receive if approved for an Avant Credit Card can vary quite a bit. The minimum credit limit you will receive is $300. The maximum credit limit you could be approved for would be $1,000.

Either way, it's a low limit. You'll want to be careful how much you charge with your card. Using too much of your available credit can hurt your credit score. The percentage of your credit limit that you use is called your utilization rate. If that rate goes above 30%, your credit score could see a significant decrease.

There is no minimum credit score or credit history requirement to qualify for an Avant Credit Card. This means you could be approved no matter what kind of credit you have (or don't have, as the case may be).

Although the card is open to a range of credit types, it does still require a credit check when you apply. And applicants may need to meet certain income qualifications. There is no guarantee you'll be approved for an Avant Credit Card.

The Avant Credit Card is a solid pick if you want to build credit but you don't -- or can't -- put down a deposit on a secured credit card. Although you won't earn rewards, paying your bill on time and keeping your balance low can help you build credit. Some applicants may even be offered an Avant Credit Card with no annual fee, though others may have to pay an an annual fee.

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.