What the Varo Credit Card Is
Varo offers a cash-back credit card designed for people building or rebuilding credit. The card is issued through Varo Bank, a mobile-first bank, and works like a standard credit card — you charge purchases, receive a monthly bill, and build a credit history as you pay on time. Unlike secured cards that require a cash deposit, the Varo card is unsecured, meaning you don't lock up money upfront.
The card's main draw is cash back on everyday purchases. You earn a percentage back on spending in categories like groceries, gas, and dining, plus a flat rate on everything else. There is no annual fee, which matters because fee-free cards let you build credit without paying to do it.
Varo itself is a mobile banking platform — you open an account through an app, not a branch. Your credit card account lives inside that app alongside a checking account if you open one. This setup appeals to people who prefer managing money on their phone and want their credit card and bank account in one place.
Key Takeaways
- The Varo card has no annual fee and offers cash back on groceries, gas, dining, and other purchases, making it useful for building credit without paying to do so.
- You must open a Varo Bank account to get the card, which requires a mobile app and a valid ID, Social Security number, and proof of address.
- The card reports to all three credit bureaus (Equifax, Experian, and TransUnion), so on-time payments help your credit score grow.
- Credit limits typically start low — often $300 to $500 — and increase over time as you demonstrate responsible use.
- Varo charges standard credit card fees like late payments and cash advances, but no foreign transaction fees if you travel internationally.
How to Open a Varo Account and Get the Card
You start by downloading the Varo app and creating an account. The process takes about 10 minutes. You'll need your Social Security number, a valid government ID (driver's license or passport), and proof of your current address (a recent utility bill or bank statement works). Varo verifies this information electronically.
Once your bank account is open, you can request the credit card through the app. Varo will review your request and tell you whether you're approved, usually within a few days. If approved, a physical card ships to your address — delivery typically takes 5 to 10 business days. You can use a temporary digital card number in the app to make purchases online while you wait for the physical card.
There is no credit check in the traditional sense. Varo looks at your banking history with them and may check your credit report, but approval does not depend on having an existing credit score. This makes the card accessible to people with no credit history or a damaged one.
Cash Back and Rewards Structure
The Varo card earns cash back in tiered categories. You earn a higher percentage on groceries, gas, and dining purchases — the exact rates vary and Varo updates them periodically, so check the app for current rates. On all other purchases, you earn a flat cash-back rate, usually lower than the category rates.
Cash back posts to your account monthly and can be used to pay your credit card bill, transferred to your linked Varo checking account, or left to accumulate. You don't have to redeem it or meet a minimum — the cash back is yours to use however you want.
There are no bonus categories that rotate, no sign-up bonus, and no spending caps that reduce your cash-back rate once you hit a limit. The rewards structure stays the same month to month, which makes it straightforward to predict what you'll earn.
Credit Limits and How They Grow
Your starting credit limit is typically between $300 and $500. This is intentionally low because the card is designed for people rebuilding credit, and a low limit reduces risk for both you and Varo. It also forces you to pay down your balance regularly, which helps your credit score.
Varo reviews your account periodically — usually every 6 to 12 months — and raises your limit if you've paid on time consistently. Some customers report increases to $1,000 or higher after a year of good payment history. You can also request a limit increase through the app, though approval depends on your payment record and current credit profile.
A higher limit helps your credit score in two ways: it lowers your credit utilization ratio (the percentage of your limit you're using), and it shows lenders you've demonstrated responsible borrowing over time.
Fees and Costs You Should Know
The Varo card has no annual fee, which is its biggest cost advantage. However, standard credit card fees still explore. A late payment fee (typically $25 to $35) hits your account if you miss a due date. Interest charges explore to any balance you carry past the due date — the rate varies based on your creditworthiness and current market rates, so check your card agreement for the specific APR.
Cash advances (withdrawing cash using your credit card at an ATM) carry a fee, usually 3% to 5% of the amount withdrawn, plus interest that starts accruing when ready. Foreign transaction fees do not explore, so you can use the card internationally without a percentage charge on purchases made in other currencies.
The most important fee to avoid is the late payment fee. Paying even one day late can trigger it and damage your credit score. Set up automatic payments or calendar reminders to may support your payment arrives on time.
How the Varo Card Affects Your Credit Score
The Varo card reports to Equifax, Experian, and TransUnion — all three major credit bureaus. This means your payment history, credit limit, and balance all factor into your credit score. On-time payments are the single biggest factor in your score, so using the card responsibly is one of the fastest ways to build credit.
When you first open the card, a hard inquiry appears on your credit report, which can lower your score by a few points temporarily. This dip fades within a few months. The new account itself also lowers your average age of accounts, but this effect also diminishes over time as the account ages.
To maximize your credit-building benefit, charge small purchases you'd make anyway (groceries, gas, a coffee), pay the full balance on time each month, and keep your balance well below your credit limit. Ideally, use less than 10% of your limit — so if your limit is $500, keep your balance under $50 before your payment due date.
Varo Card vs. Other Credit-Building Options
A secured credit card requires a cash deposit (usually $200 to $2,500) that becomes your credit limit. You get that deposit back after 6 to 18 months of on-time payments, but you're tying up money in the meantime. The Varo card requires no deposit, so you're not locking away cash.
A store card (like a Target or Amazon card) is easier to get approved for if your credit is poor, but it only reports to the bureaus if you carry a balance or miss a payment — on-time payments may not help your score. The Varo card reports your full payment history, which is more useful for building credit.
A credit-builder loan is a small loan designed purely to build credit. You borrow $500 to $1,000, make monthly payments, and the lender reports your payments to the bureaus. It works, but you're paying interest on money you don't actually use. The Varo card lets you earn cash back instead of paying interest.
Common Issues and How to Avoid Them
The most common problem is overspending because the card feels like information programs. Remember that cash back is not a discount — it's a small percentage back on what you spend. If you charge $1,000 to earn $10 in cash back, you've still spent $1,000. Only charge what you can pay off in full each month.
Another issue is missing a payment because the due date is buried in the app. Set a phone reminder for five days before your due date, or set up automatic payments from your Varo checking account. Automatic payments may support you never miss a important date, even if you forget.
Some people also struggle with the app itself — Varo's interface is mobile-first, so managing your account on a computer is clunky. If you prefer a desktop experience, this card may frustrate you. Test the app before opening an account to see if the experience works for you.
Frequently Asked Questions
Do I need a Varo checking account to get the credit card?
Yes. Varo only issues the credit card to customers who have opened a Varo Bank account. You don't have to use the checking account as your primary bank, but you must open it to hold the credit card. The checking account itself is free and has no monthly fees.
What happens if I can't pay my full balance?
You can carry a balance, but interest charges will explore at your card's APR. The interest accrues daily on any unpaid balance. If you're rebuilding credit, carrying a balance also raises your credit utilization ratio, which can lower your credit score. It's better to charge only what you can pay off in full each month.
Can I use this card internationally?
Yes. The card works abroad and has no foreign transaction fees, so you won't pay a percentage charge on purchases made in other currencies. However, your bank (Varo) may charge a fee for ATM withdrawals in other countries, so check your account terms before traveling.
How long does it take to build credit with this card?
Credit bureaus need at least six months of payment history to generate a credit score. After six months of on-time payments, you should see your score improve. The longer you use the card responsibly, the more your score climbs — most people see meaningful improvement within 12 months.
What if I'm denied for the Varo card?
Varo doesn't publicly disclose denial reasons, but common causes are insufficient income, an existing Varo account in bad standing, or a very recent bankruptcy. If you're denied, wait a few months and reapply, or consider a secured credit card from another bank in the meantime. You can also contact Varo support through the app to ask why you were denied.