Self’s New Secured Card: No Credit Check or Upfront DepositOctober 1, 2019
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Self — a startup based in Austin, Texas — has teamed with Missouri-based Lead Bank to offer the Self Visa credit card, a secured credit card that offers a unique path to credit.
Secured credit cards typically require a credit check and an upfront cash security deposit, which can be obstacles for those with poor or no credit history or with little access to immediate funds. The Self Visa credit card allows you to skip these steps if you open a Credit Builder Account, a secured installment loan necessary for eligibility.
It’s an interesting model that can clear significant roadblocks for many, but the card has its own hurdles you’ll have to clear.
» MORE: NerdWallet’s best secured credit cards
How you start with Self
When you open a Credit Builder Account, there’ll be no credit check, but you’ll owe a one-time, non-refundable administrative fee of $15. One of Self’s partnering banks issues you a small loan, but you don’t receive access to the funds immediately. The bank holds on to that loan until you pay it off.
You do this via monthly installments, starting at $25 per month, depending on the loan term. Self offers one- and two-year terms, and you can see the relevant pricing information — including APRs, finance charges and the total amount of payments — using the sliding tool on Self’s website.
The installments you pay accumulate in a federally insured certificate of deposit that earns interest until the term ends and the loan is paid off. Meanwhile, your payment history, which is a large factor in your credit scores, is reported to all three major credit bureaus: TransUnion, Experian and Equifax. If you decide to apply for the Self Visa credit card, your monthly Credit Builder Account loan payments will eventually act as your security deposit for the card and play a role in determining your credit limit.
» MORE: What factors affect your credit scores?
How you get the credit card
You can qualify for the Self Visa credit card when you meet the following criteria:
- You’ve saved $100 or more in your certificate of deposit. (This will serve as your security deposit.)
- The last three monthly payments were made in full.
- Your account is in good standing with no outstanding fees.
When it comes to your credit scores, another factor is your mix of accounts, and with Self you can get an installment loan and a credit card in one model.
“Our thesis is that now, with us, you have two different ways you’re building credit,” says Brett Billick, chief marketing officer at Self. “Ultimately it will help you, as a customer, show [the credit bureaus] what you can do.”
As with traditional secured…