Self – Credit Builder Account with Secured Visa® Credit Card review: A good bet to bolster your credit profile

If you’re working on getting a credit card and you’ve considered self-reporting credit services or credit-builder loans to help your score, the Self – Credit Builder Account + Secured Visa Credit Card might be a convenient combo for you.

However, its three-month minimum start-up period means Self’s secured card isn’t a true “instant approval” credit card. It’s a good option if you can’t provide the upfront deposit for a traditional secured credit card, but like other credit-builder loans, the Self account and card combo might not be the most efficient or cost-effective way to build your credit.

To first be eligible for the Self Secured Visa, you have to start with a Credit Builder Account. 

Self’s Credit Builder Account is similar to a credit-builder loan — it’s a loan that Self holds in a certificate of deposit (CD) account, which accountholders pay off in fixed, monthly installments. You apply for the account with Self, choose a pay-off plan at varying interest rates, and pay the upfront (non refundable) administration fee. Then, you start making payments, plus interest and fees, for 24 months until you pay off the amount.

After you make three on-time payments totaling at least $100, you’re automatically eligible for the Self Secured Visa portion of the product. You can choose how much of what you’ve saved up you’ll use for the security deposit and starting credit limit. Then you can order the card and receive it in the mail.

Once you have the card, it works like any other secured credit card, and you can start using Self’s card and account to build your credit score.

This card and credit builder loan combo can be great if you’re building credit and want to speed up the process. You may be able to boost your score because the Self — Credit Builder Account with Secured Visa expands your credit mix.

Credit-building features: Improve your credit mix without a hard pull

The Self card and account combo expands your credit mix beyond credit utilization and reporting to include a loan account balance. A combo like this could improve the rate at which you build credit because your credit mix accounts for 10 percent of the overall factors impacting your score.

Making a fixed loan payment each month demonstrates that you are a responsible borrower with ongoing financial stability. Although credit utilization and payment history make up most of how credit bureaus calculate your credit score, meeting a regular financial obligation can only help you — even if it’s only a little bit.

It’s possible to build credit without a credit card — a credit-builder loan is just one way — but it may be more advantageous to complement your credit builder account with a credit card. If you’re exploring your credit-building options, you could start with just the credit builder account without the card. In fact, you’ll need to have your account open for at least three months, in good standing and $100 or more saved before you’re even eligible for the card. However, if you want to build credit quickly, add the Self Secured Visa to your account once you’re eligible.

If you can afford to open a loan account with Self and make fixed payments (plus interest) on time, Self’s credit builder account and Visa can be a great addition to your credit-building strategy because it eases you into the process of making fixed payments before giving you a chance to use credit.

No security deposit: Access a decent line of credit without a deposit

The Self secured card does not require a traditional secured credit card deposit. It does require you to meet a minimum deposit amount, but those funds will come directly from your credit builder loan account — which is unavailable for you to withdraw from in the first place.

After you make three on-time payments over three months with your credit builder account and accrue at least $100 in savings after interest and fees, you can open your card account without any additional financial commitment. If you were to open a different secured card, you’d need to deposit money in addition to what you have already deposited in your Self loan account.

The Self card and account combo consolidates your deposited money in one place. Plus, once your credit builder account’s term ends, you’ll earn your deposit plus all monthly payments back, minus finance charges, a one-time administrative fee, unpaid card and interest charges.

Although the Self card and account combo can be great for building credit, there may be better choices for most credit builders. If you want to keep costs low and building credit simple, you may be better off with a traditional secured card or another credit-building card.

Annual fee: This card costs more to hold than other options

This card costs $25 annually, and the Self Credit Builder Account requires a $9 administrative fee to get started. Although these costs are on the low end of credit card fees, other cards don’t charge them.

Secured credit cards require refundable deposits to get started. However, these start-up costs are returned to you when you close your card account in good standing. The Self charges the card’s $25 annual fee every year in addition to any initial deposit you transfer from your Credit Builder Account. Although the card can be costly to your credit-building strategy, it may be worth the extra cost if you want a healthy credit mix on your credit report. 

If you aren’t interested in paying fees in addition to a deposit and the potential interest charges that come with using credit, you might be better off with a secured card with low or no fees.

Finance charges: Costs may be greater than other secured options

In addition to your annual fee and potential interest charges, the Self Secured Visa card is linked to a required Credit Builder Account with finance charges.

You’ll pay a finance charge with your credit builder account based on your chosen payment plan. This amount can be anywhere between $89 and $533. Pricing information on Self’s website can give you a better idea of how much you should expect to pay.

You’ll build credit history as you make payments, but this makes the Self Secured Visa a relatively costly card to get started with. Considering the money you pay each month will sit in your deposit account until your loan term ends, it can mean tying up thousands of dollars into an account you can’t withdraw from for up to two years.

Consider the minimum $25 credit builder account payment of $25 monthly. Over two years, this is $600 of your money you can’t use — except for expanding your Self Secured Visa card’s credit limit. Then, when you close your account, Self will charge you an $89 finance charge and any other outstanding charges before returning the remainder of your deposit to you. This deposit amount is much higher than the minimum required on a secured credit card. Over two years with another secured card, you could build credit using a lower deposit amount and possibly benefit from credit limit increases or account reviews that open the gate to unsecured cards.

A diverse credit mix is a great way to build credit, but other options are much simpler and affordable if you just want to hold a credit card to build credit with. 

Maintenance: Complicated start-up and upkeep process

Compared to a traditional secured card or a credit card for bad credit, the Self Secured Visa may be the most complicated option. Because you link your Secured Visa to your Self Credit Builder Account, it can be tricky for first-time cardholders to maintain good standing with both the fixed payment loan account and their credit card.

If you’re looking for simplistic, easy-to-track payments, then the Self card might be more complicated than you’re hoping for. A secured card can be more straightforward because some allow for automatic payments and don’t have the added layer of a credit-building loan.

Although it may boost your credit score, Self’s credit-builder loan and secured card combo may complicate the credit-building process with extra costs and restrictions. It’s easy to see how paying a security deposit for a more traditional secured card may be better overall.

The Self – Credit Builder Account with Secured Visa isn’t the best choice for everyone, but it may be the right card for you if you identify with these groups:

The Self – Credit Builder Account with Secured Visa Credit Card allows anyone with limited or damaged credit to build payment history on two different credit lines: a loan and a credit card. This tool can be great if you want a card without a another hard credit check and to diversify your credit mix. However, the additional costs and restrictions you’ll face from tacking on a credit-builder loan could make traditional secured cards more appealing options.

*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.