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How to use the Self Credit Builder Account with Secured Visa

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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 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 establishing your credit history.
  • The 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 a $25 annual fee. There are also interest charges, some of which you can’t avoid. Still, this account 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 it’s really 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’ll choose your credit limit (from $100 to $1,700) and order the Secured Visa card. Once you receive and activate your card, you can start using it anywhere in the U.S.

Below, we’ll go over the main features of the Self Secured Visa.

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, that means 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 that shows you can handle different types of accounts responsibly. This is not a major factor in credit formulas, but it’s something to consider if you need all the help you can get to improve your credit score quickly.

No credit history is required

The Self Visa is specifically designed to help people with no credit history, bad credit history or limited credit history.

Self’s CD account earns interest

Your credit builder loan is held in a certificate of deposit (CD) savings account, which earns interest. This interest gets paid when your loan matures. However, keep in mind that you will pay interest on the credit builder loan.

No security deposit is required

One important difference between a standard secured credit card and the Self Secured Visa is that the latter doesn’t require 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 Visa

You’ll qualify for the Self 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. 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 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 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 Visa secured credit card, but you’ll have access to 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

Don’t bite off more than you can chew

You can choose an account with a 12- or 24-month term, and your payment plan options are as follows:

  • $25 or $35 per month for a 24-month account
  • $48 or $150 per month for a 12-month account

A larger loan doesn’t necessarily mean that you’ll build or rebuild your credit faster. Make sure you choose the plan you’re going to be comfortable with.

Pay meticulously

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

When you pay your card balance with a debit card, the Self Visa charges an expedited payment fee of $3.50. You’ll also pay an expedited payment fee — ranging from $0.65 to $4.75 depending on your account plan — if you use a debit card to pay your Credit Builder Account. However, there are no fees for using your bank account or some prepaid debit cards to pay your balance.

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 some or most of your efforts to raise your score.

The bottom line

The Self Credit Builder Account with Secured Visa 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 a $25 annual fee 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 24.24 percent variable APR by paying your credit card bills in full, you can’t avoid the interest payments on your credit builder loan. Depending on the account you choose, you might have to pay up to $146 in finance charges (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.

Written by
Andy Shuman
Contributor
Andy Shuman is a contributing writer to Bankrate. He is a New York-based freelance writer with strong expertise in consumer credit and travel loyalty programs.
Edited by
Associate Editor