Self – Credit Builder Account + Secured Visa® Credit Card review
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Self – Credit Builder Account + Secured Visa® Credit Card overview
If you’re working on obtaining a credit card and you’ve considered self-reporting credit services or credit-builder loans to help your credit score, then the Self – Credit Builder Account + Secured Visa® Credit Card might seem like a convenient one-two combo. By being in good standing after three months of on-time payments and $100 paid into Self’s Credit Builder savings account, you’ll automatically be eligible for the Secured Visa card—no credit history or “hard” credit check required.
However, its three-month minimum trial 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.
A deeper look into the current card offer
- Rewards rate: N/A
- Welcome offer: N/A
- Annual fee: $25 monthly payment, 24 month term with a $9 admin fee
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 15.92% (Variable)
Current welcome offer
Although chasing a sign-up bonus shouldn’t be your priority if you’re trying to build credit, some credit-builder cards offer a chance to earn one. For example, the Discover it® Secured Credit Card’s welcome offer makes it a more enticing deal, as Discover will match all the cash back you’ve earned within your first year.
Neither the Self Credit Builder Account nor the Secured Visa card earn rewards, which is common among products designed for cardholders with no credit history.
While having no rewards program shouldn’t be a deal-breaker for credit-builders, there are a few credit cards for those with limited credit that do offer rewards. Student credit cards may carry the best rewards and benefits if you can qualify; otherwise, you might want to reconsider the Discover it Secured for its 2 percent cash back at gas stations and restaurants (on up to $1,000 in combined spending per quarter, then 1 percent) and 1 percent back on other purchases.
Other cardholder perks
You won’t get many extra perks from Self outside the product’s credit-building potential, but you do get a few basic benefits through Visa with the secured card.
Improving your credit mix
The Self credit-builder products set themselves apart by reinforcing an often overlooked aspect of your credit score, your “credit mix.” This factor accounts for 10 percent of your FICO credit score and might be hard to nurture if you’re new to credit, so the opportunity to diversify your credit lines with both a loan and card could expedite your credit journey.
No deposit required
Unlike most secured credit cards, the Self Secured Visa card doesn’t require a security deposit upfront. The payments you’ve saved up in Self’s certificate of deposit* (CD) savings account act as your security deposit and credit limit instead. Because of this, the only upfront costs are the $25 monthly payment, 24 month term with a $9 admin fee.
Just keep in mind that you’re also paying monthly interest on your credit builder loan, which isn’t necessary for other secured card deposits. This also means that your credit limit is capped at the amount you’ve contributed to your CD so far. Self will also review your account periodically to grant you unsecured credit limit increases beyond your deposit, but you can’t request these reviews, and Self doesn’t specify how frequently they review your account or how much of a credit limit increase you could receive.
Visa Traditional Credit Card benefits
- Cardholder inquiry service
- Lost or stolen card reporting
- Emergency card replacement and cash disbursement
- $0 liability for unauthorized purchases
- Pay-per-use roadside dispatch
Rates and fees
It’s important to remember that you’ll be paying any applicable rates and fees for both your credit-builder loan and your secured credit card. You can avoid the costly 15.92% (Variable) on the secured card if you don’t carry a balance, but you’ll still owe monthly APR and finance charges on your credit-builder loan.
A loan with a $25 monthly payment, 24 month term with a $9 admin fee at a 15.92% Annual Percentage Rate with a finance charge of $89; A loan with a $35 monthly payment, 24 month term with a $9 admin fee at a 15.97% Annual Percentage Rate with a finance charge of $125; A loan with a $48 monthly payment, 12 month term with a $9 admin fee at a 15.65% Annual Percentage Rate with a finance charge of $46; A loan with a $150 monthly payment, 12 month term with a $9 admin fee at a 15.91% Annual Percentage Rate with a finance charge of $146. Please refer to www.Self.inc/pricing for the most recent pricing options.
Make sure you read the Self secured card’s terms and conditions carefully beforehand to see how they will impact your journey to a higher score.
How the Self Credit Builder Account + Secured Visa card compares to other secured cards
Self’s credit-builder loan and secured card combo may complicate the credit-building process with extra costs and restrictions, so it’s easy to see how ponying up a security deposit for a normal secured card may be better in the long run.
One of the most important elements to keep in mind while building credit with a credit card is your credit limit. Along with paying on-time and in full, maintaining a low credit utilization ratio is key to improving your credit score. Unfortunately, the Self Secured Visa card’s credit limit may be too low for many credit-builders, as your limit increases slowly with monthly credit-builder loan payments and a $25 chunk is taken out by the annual fee. Depending on your loan, your Self card’s credit limit may also only reach $500 to about $1,700.
Even with a limited or bad credit history, many secured cards allow you to set a much higher credit limit via an upfront security deposit. For example, the BankAmericard® Secured Credit Card offers a limit of up to $4,900 based on your deposit, and the Capital One Platinum Secured Credit Card only requires an initial deposit of $49 or $99 if you can’t swing the typical $200 deposit. Plus, cards like the Discover it Secured and Capital One Platinum Secured Credit Card offer periodic account reviews that may allow you to upgrade to an unsecured credit card if you’ve shown responsible credit habits.
Unless improving your credit mix is a top priority, these other secured cards might be more valuable alternatives.
Bankrate’s Take—Is the Self Credit Builder Account + Secured Visa card worth it?
The Self – Credit Builder Account + Secured Visa Credit Card is a unique pairing that allows those with limited or damaged credit to build payment history on two different credit lines: a loan and a credit card.
This can be great if you want a card without a credit check and you want to shore up the “credit mix” factor of your credit score, but the additional costs and restrictions you’ll face from tacking on a credit-builder loan could make traditional secured cards a more appealing option.
Pros and cons
- Possible to owe both credit card and credit-builder loan interest simultaneously
- $25 monthly payment, 24 month term with a $9 admin fee and credit builder account savings restrict your credit limit
The information about the BankAmericard® Secured Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
*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.