Teenager with credit card

what is step?

Step is a financial technology startup that offers a credit card tailored specifically for teens and young adults. The company was founded in 2017 with the goal of helping young people learn how to manage credit responsibly.

The Step credit card is designed as a “starter” card for those with little or no credit history. It has relatively low credit limits and fees compared to traditional credit cards.

The key features of the Step card include:

  • Credit limits from $300 to $2,000 based on your creditworthiness
  • No annual fee
  • No foreign transaction fees
  • Mobile app with budgeting tools and spending insights
  • Option to add a parent as a secondary cardholder

The card aims to help young people build credit safely under the guidance of their parents. Step provides educational resources on financial literacy as well.

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Card Specs & Feature’s

The Step credit card offers some compelling features that make it an attractive option, especially for frequent shoppers. The standout feature is the cashback rewards structure.

With the Step card, you can earn unlimited 1.5% cashback on all purchases. There’s no limit on the amount of cashback you can earn. This is a very straightforward and generous rewards rate compared to many other cashback cards.

The cashback is automatically redeemed as a statement credit, so there’s no waiting to reach a redemption threshold or having to log in to redeem rewards. As soon as your statement cuts, the cashback earned that period is applied as a statement credit to your balance. This makes the rewards very easy to use.

The 1.5% flat rate cash-back applies to every purchase, so the Step card makes a great option for your daily spending. You don’t have to activate bonuses or keep track of categories. All purchases earn 1.5% unlimited cash-back automatically.


The Step Credit Card has a $39 annual fee. This is relatively low compared to other cards with similar rewards programs. It charges a 3% foreign transaction fee on purchases made outside the United States. This is standard for cards that don’t offer extra perks for international travel. There are no balance transfer fees or cash advance fees.

Late payment fees are up to $40. Returned payment fees are up to $40 as well. These are typical penalty fees. There are no overlimit fees with this card since it doesn’t allow transactions that would put your balance over the credit limit.

The APR for purchases, balance transfers, and cash advances is 25.24% variable. This is a relatively high interest rate compared to other rewards cards.

Overall, the Step Credit Card has average fees for a card aimed at consumers with limited or rebuilding credit. The annual fee is reasonable considering the lack of other fees. Just be aware of the high foreign transaction and penalty fees.


To qualify for the Step Credit Card, you’ll need to meet certain requirements regarding your credit score and income.

Credit Score

Step has fairly lenient credit requirements compared to other credit cards. You can qualify with a credit score as low as 550. This makes the Step Card accessible to those trying to build or rebuild their credit.

That said, you’ll have better approval odds and qualify for a higher credit limit if your score is 600 or above. Those with scores below 550 will not be approved.



The Step card offers some great benefits that make it an attractive option.

Purchase Protections

The Step card offers decent purchase protection benefits. You get extended warranty protection, purchase protection, and return protection. So if an item is damaged or stolen within 120 days of purchase, you can be reimbursed up to $1,000 per claim.

No Foreign Transaction Fees

There are no foreign transaction fees with the Step card, making it a good option for international travel. You’ll pay the same fees on purchases abroad as you would in the U.S.

Cell Phone Protection

When you pay your cell phone bill with the Step card, you get up to $800 per claim in cell phone protection against damage or theft, with a $50 deductible.

No Annual Fee

The Step card has no annual fee, so it’s a no-brainer to keep it long term if you get value from the other benefits. There’s no cost to having the card beyond any interest you may accrue.


The Step Credit Card does have some notable drawbacks to be aware of.

  • Low Rewards Rate: The rewards rate on the Step Credit Card is just 1.5% on eligible purchases. Many other cash back credit cards offer higher rewards rates of 2% or more, so you may be missing out on potential rewards with the Step Card.
  • Foreign Transaction Fee: There is a 3% foreign transaction fee charged on the Step Credit Card for any purchases made outside the United States. This can really add up if you travel internationally often or make any foreign transactions. Many other credit cards do not have a foreign transaction fee.

Overall, while the Step Credit Card does offer some nice features for building credit, the low rewards rate and foreign transaction fee are significant drawbacks to weigh when considering if it’s the best card for your needs. There are other starter credit cards without these drawbacks that may be a better option.

Who it’s best for?

The Step Credit Card is best for teenagers opening their first credit card or bank account. Step is an approachable option, as it doesn’t impose credit card interest, demand fees, or require a minimum deposit.

This makes it less daunting for young people to begin building their credit while gaining practical knowledge about spending, budgeting, and finance management. This card is also great for those who frequently spend in the card’s bonus categories and can maximize the value of the rewards.

  • Travelers – With 3x points on airfare and hotels, this card is great for those who travel often for work or leisure. The points can be redeemed for maximum value towards travel purchases.
  • Diners – The 4x points at restaurants make this card rewarding for foodies or those who dine out regularly. Redeeming points for dining purchases gets solid value.
  • Subscription services – The 2x points on subscription services like Netflix, Spotify, etc is nice for those who have many monthly subscriptions. Using points towards these bills can add up.
  • Day-to-day spenders – With 1x points on gas and groceries, frequent drivers and grocery shoppers can rack up points quickly from common purchases.

The multipliers on these key categories make the Step Card most rewarding if you frequently spend in them. It’s less ideal for those with more varied or infrequent spending. But overall it’s a solid card for maximizing everyday purchases.

The bottom line

The Step credit card is worth considering for users who want a simple, no-fee card that helps build credit. With no annual fee, it can be a decent starter card for those new to credit.

The card offers basic rewards on purchases and some useful credit-building features. The main draw is the ability to graduate to an unsecured card in as little as 7 months with responsible use. This can help establish credit history.

The low regular APR is attractive but the penalty APR is quite high if you miss payments. The credit limit also starts low at just $300. So users need to be cautious and make payments on time.

Overall, the Step card can be recommended for new credit builders who will use it responsibly. Just be aware of the potential drawbacks like low initial limits and high penalty rates. As an entry-level card, it provides a path to better credit and graduation to other cards in the future.


Common questions about the Step card

The Step card does not have a minimum credit score requirement. It is designed for people new to credit or rebuilding their credit.

No, there is no annual fee for the Step card. This helps make it accessible for people new to credit.

Yes, Capital One will consider upgrading your Step card to one of their unsecured credit cards after making 5 months of on-time minimum payments. You’ll need to meet the credit criteria for the new card.

The APR is 24.99%. This is on the higher side, so the Step card is best for those who plan to pay their balance in full each month. Carrying a balance will incur substantial interest charges.

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