Step's card helps teen build a credit score
Step is a neobank aimed at teens. It’s one of the newest options available for helping parents keep track of their kids spending, while also giving teens a modicum of financial independence.
It has been featured on multiple mediums and news outlets, including Insider, Forbes, Reuters, and TechCrunch. In this piece, we’re going to give you key takeaways on what Step is?
We’re also going to discuss some of the more pressing issues when it comes to the company - those that the public and consumers - want answers to, including, is Step safe? Is Step banking real? Does Step help you build credit? And what bank is Step linked to?
What is Step?
Step is a relatively new mobile banking service, completely digital, without any brick and mortar branches, that caters to children between the ages of 13 to 18 — teenagers. It’s a completely free service that offers its clients classic banking tools such as an account and a Visa card.
Up until a couple of years ago, initiating kids into the financial world, to work with banks might have seemed an impossible task. Getting them started on a path towards financial success and responsibility might have seemed daunting. If you wanted to get your child on the right track, build their credit score, and open an account for them, you had to go to your own bank and make your kid an authorized credit card user. This is no longer the case thanks to the Step app.
Step was founded by industry veteran CJ MacDonald and Alexey Kalinichenko. They wanted to provide teens with an easy way to approach banking. Their main desire is to promote financial literacy in the next generation. Why? The average person today pays over $350 per year in banking fees. More than 35% of teens will have an overdraft fee within the year, and not even know what it is. And by the time someone graduates they have more than $45,000 in debt.
The duo believes that these harrowing stats, and trends, are partly due to the fact that most people only start to approach financial literacy and an education on it later in life — when they are planning for their retirement. In their teens, and early adulthood, most Americans are not only financially irresponsible but financially illiterate. In order to fix these issues and approach the challenge of getting kids started on a successful economic road, the duo devised Step — Helping kids achieve some sort of independence and giving them key economical insights and knowledge at an early stage.
Since its inception, Step has garnered a lot of attention from critical investors and numerous influencers and celebrities. Amongst them, Justin Timberlake, Will Smith, Charli D’Amelio, and Eli Manning.
Let’s explore a bit about Step and how it works.
How does Step work?
Step is a completely free mobile banking service that is in reality a mix of classical tools with innovative benefits. For example, the Step Visa Card is not a credit card nor a debit card — it is a radically vogue secure card.
The Step Visa Card functions as a debit card, people deposit money into their account, and then they can use said funds for different purchases. Where the Step Visa Card differs is the fact that debit cards don’t build a credit score, while a secure card - like Step’s - does.
With a Visa Step Card, teens can only spend the amount they have deposited into their associated account. They can only make purchases with the money they have deposited — But said purchase and spending, due to the way the Visa Step Card is configured, help teens start to build strong credit history and subsequently a score.
And this is just one of the main advantages of Step for teens.
Benefits of having a Step Account
There are multiple benefits to opening a Step account. Some of them are:
- Step banking app is available for teens — kids between the age of 13 and 18. Teens can open an account but they need a “sponsor” such as a legal guardian or parent to help them sign-on.
- The ability to start amassing a positive credit score.
- Since Step is a “debit card” account that works with a secure card, teens won’t have to worry about overdraft fees.
- Teens can spend and make purchases wherever Visa is accepted.
- They can easily transfer and add money to their account.
- Step works on referral programs. Kids can earn $5 for every person that signs up simply by sharing their referral link.
- Using the Step app, teens can instantly send and receive money.
- Step is configured so it can be used with Apple App or Google Pay.
- Step keeps your money safe. Step uses strong encryption and proprietary authentication to ensure that your information, as well as your funds, are protected.
- Step members are insured, thanks to their parent bank, Evolve Bank & Trust - a member of FDIC, for up to $250,000.
- Step is completely free: no monthly fee.
- There are withdrawal fees if you use a machine outside its 35,000 networks of ATMs.
- Parents can oversee their teenager’s activity, get notifications, add money to their account, manage and even freeze their kid’s card.
- Step cards can be used internationally wherever Visa is accepted.