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The Self — Credit Builder Account with Secured Visa® Credit Card is a unique tool for consumers who want to speed up either their initial credit journey or their credit recovery. As the name suggests, you’ll be getting two credit-building mechanisms in one:
- The Self Credit Builder Account* is a fixed installment loan that exists solely for the purpose of establishing your credit history.
- The Self Secured Visa credit card is a secured credit card that can be used anywhere in the U.S. where Visa cards are accepted. It will also help you to boost your credit score.
The Self Secured Visa doesn’t offer a rewards program of any kind, and it also carries a $9 non-refundable, one-time administrative fee and an annual fee of $25. There are also interest charges, some of which you can’t avoid. Still, this combination of accounts might be worth considering if you want to build your credit faster than a secured credit card alone would allow.
Features of the Self Secured Visa
The Self Secured Visa might be a little more complicated to set up than a simple secured credit card, but once you’re approved, it’s easy to use. First, apply for a Self Credit Builder Account and make three monthly payments on time. Then, provided you have $100 or more in savings and your account is in good standing, you can choose your credit limit (minimum $100) and order the Secured Visa card. Once you receive and activate your card, you can start using it anywhere in the U.S. that accepts Visa.
The following are some of the main features of the Credit Builder Account and Self Secured Visa you’ll want to be aware of.
Boosts your credit score by reporting a credit mix
Since the Self Secured Visa combines the Credit Builder Account with the Secured Visa Credit Card, you’re getting an installment loan and revolving account with the same product. Both FICO and VantageScore value a healthy mix of installment and revolving accounts because it shows you can handle different types of accounts responsibly.
This is not a major factor in credit formulas compared to other factors, but it’s still something to consider if you need all the help you can get to improve your credit score quickly.
No credit history is required
Self’s CD account earns interest
Your Credit Builder loan is held in a certificate of deposit (CD) savings account, which earns interest that is paid when your loan matures. However, keep in mind that you will pay interest on the Credit Builder loan, which can negate some of this value.
No security deposit is required
One important difference between standard secured credit cards and the Self Secured Visa is that the latter doesn’t require you to pay a security deposit upfront. Instead, you’ll choose how much of your Credit Builder Account savings (min. $100) you want to serve as your security deposit and credit limit.
No separate application for the Self Secured Visa
You’ll qualify for the Self Secured Visa after three months of timely payments, if you have at least $100 in your Credit Builder Account and if your account is in good standing — without having to complete a separate application.
Of course, having to wait at least three months to get the card is less than ideal, but your loan payments will be reported right away. Plus, there’s no hard credit pull for the Self Secured Visa.
Reports to all three major credit bureaus
Reporting to all three bureaus — Experian, Equifax and TransUnion — can help because some lending institutions only contact one of them when you apply for a loan or credit card. Using your Self Secured Visa account responsibly ensures that your future potential lender will have an updated credit score when it considers your application.
Standard Visa benefits
There are no outstanding perks or benefits associated with the Self Secured Visa credit card, but you’ll have access to standard Visa benefits like lost or stolen card reporting, a cardholder inquiry service, emergency card replacement and cash disbursement, $0 liability for unauthorized purchases and pay-per-use roadside dispatch.
Maximizing the Self Secured Visa and Credit Builder Account
Once you’re ready to start using your new accounts, keep the following tips in mind.
Don’t bite off more than you can chew
With the Self Credit Builder Account, you can typically choose to deposit $25 per month, $35 per month, $48 per month or $150 per month over a 24-month term (length may vary).
Keep in mind, however, that taking on a larger loan doesn’t necessarily mean you’ll build or rebuild your credit faster. Make sure you choose the plan you can stick with comfortably for the length of the loan’s term.
Self helps you to build or rebuild your credit by reporting your timely payments to all three credit bureaus, but it reports late payments as well. If you’re not careful, you may find yourself in a situation where you’re paying fees and interest to build your credit, only to find your credit score plummeting. To make sure that doesn’t happen, do your very best to avoid late payments.
Don’t pay balances with a debit card
You’ll pay an expedited payment fee of $3.50 if you use a debit card to pay your Self Secured Visa. Although doing so updates your available balance more quickly, there’s no fee for paying your balance via ACH bank transfer, so choose this option whenever possible.
Don’t close your account early
Finally, don’t pay off your Self account early if you can help it. Remember that credit bureaus want to see how you can handle payments over the long term. Closing your account early may sabotage your efforts to raise your score.
The bottom line
The Self – Credit Builder Account with Secured Visa® Credit Card review: A good bet to bolster your credit profile is a solid credit-building tool that provides consumers with the type of credit mix favored by both FICO and VantageScore credit formulas, which can raise credit scores more quickly.
This functionality, however, comes at a price. Not only does the Self Secured Visa have an annual fee of $25 and a non-refundable $9 administrative fee, but there are also finance charges you’ll have to pay along the way. While you can avoid the whopping 26.99 percent variable APR by paying your credit card bills in full, you can’t avoid the interest payments on your credit builder loan (which vary depending on the account you choose; see the Self pricing page for more details).
Also, keep in mind that FICO’s credit mix only amounts to 10 percent of your credit score. So unless you need to accelerate your credit recovery by all means possible, you may want to consider other top secured credit cards. For example, the Discover it® Secured Credit Card comes with no annual fee and a cash back program. You may even be able to qualify for an unsecured credit card, like the Mission Lane Visa® Credit Card or the Petal® 1 “No Annual Fee” Visa® Credit Card, which are specifically designed for consumers with no credit or bad credit.
*All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or Atlantic Capital Bank, N.A. Member FDIC, Equal Housing Lender. Subject to ID Verification. Individual borrowers must be a U.S. Citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number are required. All loans are subject to ID verification and consumer report review and approval. Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans subject to approval. All Certificates of Deposit (CD) are deposited in Lead Bank, Member FDIC, Sunrise Banks, N.A., Member FDIC or Atlantic Capital Bank, N.A., Member FDIC.