FG Trade/ Getty Images; Illustration by Austin Courregé/Bankrate
Key takeaways
- If you’re looking for ways to improve your credit score quickly, the secured Self Visa® Credit Card might be able to help.
- This is a secured credit card to show credit bureaus that the account holder is a responsible borrower that has the option to combine with a Self Credit Builder Account.
- Like any tool for building credit, however, it’s only helpful when used correctly — so be sure to make payments on time and not overspend when setting up your account plan.
The secured Self Visa® Credit Card is a unique tool for consumers who want to speed up either their initial credit journey or their credit recovery. It 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 when used responsibly.
The secured Self Visa credit card doesn’t offer a rewards program of any kind, and it also carries a annual fee of $25 after the first year. 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 can allow.
How to sign up for the secured Self Visa Credit Card
Due to a recent update, the secured Self Visa card is quite easy to apply for. Here are the steps to get started:
- Apply for the secured Self Visa card. The application is straight forward and has a high approval rate Once approved, you must make three monthly payments on time.
- Choose your security deposit. The minimum deposit for this card is $100, which is lower than the average secured card. Most require at least $200.
- Receive and activate your card. Once it’s activated, you can start using it anywhere in the U.S. that accepts Visa.
Features of the secured Self Visa Credit Card
Deciding whether this card and account combo is right for your needs means understanding what it can offer you. The following are some of the main features of the Credit Builder Account and Self Secured Visa:
-
While no longer a requirement to receive the secured Self Visa, you can still combine the card with a Self Credit Builder Account. With this combination, 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 driver in credit score calculations 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.
-
The Self Secured Visa is specifically designed to help people with no credit history, bad credit history or limited credit history.
-
Your Credit Builder loan is held in a certificate of deposit (CD) account, which earns interest that is paid when your loan matures. However, keep in mind that you’ll still have to pay a certain amount of interest to Self for providing you with the loan, so that will negate some of the CD’s value.
-
One important difference between standard secured credit cards and the Self Secured Visa is that the latter doesn’t require you to pay a high security deposit. Instead, you can put down a deposit as low as $100 for this card.
-
Having a card that reports to all three bureaus — Experian, Equifax and TransUnion — can help you build credit because some lending institutions only contact one of them when you apply for a loan or credit card. Using your Self Secured Visa and Credit Builder Account responsibly ensures that your future lenders will have an updated credit score when they consider your application.
-
There are no outstanding perks or benefits associated with the Self Secured Visa credit card, but you’ll have access to traditional Visa benefits like:
- Lost or stolen card reporting
- Cardholder inquiry service
- Emergency card replacement and cash disbursement
- $0 liability for unauthorized purchases
- Pay-per-use roadside dispatch
Maximizing the secured Self Visa Credit Card
Once you’re ready to start using your new accounts, keep the following tips in mind:
-
With the Self Credit Builder Account, you can typically choose to deposit $25, $35, $48 or $150 per month over a 24-month term (length may vary).
However, 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.
-
You’ll pay an expedited payment fee if you use a debit card to pay your Self Secured Visa balance. 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.
-
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
Using the secured Self Visa Credit Card is a good way to bolster your credit profile. It’s a solid credit-building tool that provides consumers with the type of credit mix favored by both FICO and VantageScore credit formulas, which means the tool can raise credit scores more quickly.
This functionality, however, comes at a price. Not only does the secured Self Visa Credit Card have an annual fee of $25 after the first year, but there are also finance charges you’ll have to pay along the way. While you can avoid the whopping 28.24 percent variable APR by paying your credit card bills in full, you can’t avoid the interest payments if you choose to combine the card with a 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 typically 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 some top secured credit cards instead. For example, the Discover it® Secured Credit Card comes with no annual fee and a popular 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 designed for people with no credit or bad credit.
*Information about the Mission Lane Visa® Credit Card and the Petal® 1 “No Annual Fee” Visa® Credit Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the 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.
Read the full article here
