Is Self a Secured Credit Card? Here’s How It Works

Building credit is an important financial endeavor for many individuals. Companies like Self (formerly Self Lender) offer specialized tools designed to assist consumers in this process. These tools help individuals establish a positive financial history.

Understanding Secured Credit Cards

A secured credit card requires a security deposit. This deposit typically determines the credit limit, acting as collateral for the issuing bank. This structure reduces risk for lenders, making these cards accessible to individuals with limited or poor credit histories.

Secured cards help cardholders build a positive credit history. Issuers report payment activity to the three major credit bureaus. Consistent on-time payments gradually improve a credit score. The security deposit is generally refundable when the account is closed, provided all outstanding balances are paid.

Self’s Credit Builder Account

Self’s primary offering is its Credit Builder Account, which operates as an installment loan. Unlike traditional loans where funds are disbursed upfront, the loan amount is held in a Certificate of Deposit (CD) account by a partner bank. This means the borrower does not receive the funds until the loan term is completed.

Customers make small, fixed monthly payments over a set term, typically around 24 months, with options ranging from $25 to $150 per month. Each on-time payment is reported to all three major credit bureaus, building a positive payment history. Upon completion of payments, accumulated funds from the CD, minus interest and fees, are returned.

The Credit Builder Account is designed for individuals who may not have upfront cash for a traditional secured credit card deposit or who are new to credit. It serves as a structured savings plan while simultaneously establishing a credit history. It helps consumers demonstrate their ability to manage an installment loan responsibly.

The Self Visa Secured Credit Card

Beyond the Credit Builder Account, Self offers the Self Visa Secured Credit Card as a separate product. This card is not immediately available upon signing up for the Credit Builder Account but serves as a potential next step. To qualify, individuals must have an active Credit Builder Account in good standing, typically with at least three on-time monthly payments and $100 in savings.

The security deposit for the Self Visa Secured Credit Card is funded directly from Credit Builder Account savings. For instance, if an individual has saved $100, they can use that amount as the deposit for the secured card, which then becomes their credit limit. The card features a minimum security deposit of $100.

This secured card also reports payment activity to all three major credit bureaus monthly, providing an additional tradeline—a revolving credit account—to an individual’s credit report. This dual reporting of an installment loan and a revolving credit account aids in credit building. The card generally has a variable Annual Percentage Rate (APR) and may include an annual fee after the first year.

Is Self a Secured Credit Card?

No, Self as a company is not solely a secured credit card. Self provides a two-pronged approach to credit building. Its initial product is the Credit Builder Account, which functions as a credit-builder loan. This loan helps individuals establish an installment loan history by making regular payments into a locked savings account.

The secured credit card is a distinct product offered by Self, which individuals can transition to after demonstrating responsible payment behavior with their Credit Builder Account. Self is a financial service that first facilitates credit building through an installment loan, then offers the option of a secured credit card. This allows users to build different types of credit.