Great for Building Credit: Discover the Benefits of the Self Visa® Credit Card

Whether your credit lacks a long history or has suffered a setback in some way, The Self Visa® Crediis a powerful tool for building credit.

Why the Self Card is a great choice for building credit

Secured credit cards are a special type of card that requires a cash deposit — usually equal to your credit limit — to be made when you open the account. This money then acts as collateral every time you make a purchase. If you fail to make payments on time or default on your debt, your lender can use the deposit to reimburse itself.

Secured credit cards work similarly to debit cards in that you’re using your own money as insurance for transactions, rather than borrowing funds from a lender. However, unlike a debit card, the payment history for your secured card may be reported to the three nationwide consumer reporting agencies (CRAs) — Equifax, TransUnion and Experian.

Provided your lenders report your payment history to the CRAs, a secured credit card can be a helpful tool for building and improving credit. Because secured cards are essentially insured with your own money, they may be more accessible than other types of credit cards. This is especially true for high-risk borrowers or those with little to no credit history.

The Self Visa® Credit Card is designed for individuals who want to establish or improve their credit history.

The Self Visa® Credit Card

Here’s how it works:

Open A Credit Builder Account with Self.

This account serves as your savings progress and secures your credit card.

On-Time Payments:

Make three monthly payments on time to demonstrate responsible credit behavior.

Savings Progress: Your savings progress (starting at $100 or more) determines your credit limit.

Responsible use of the Self Visa® Credit Card directly impacts three major credit factors that contribute to your credit score:

Payment History: Consistently paying your credit card bills on time positively affects your payment history. Timely payments demonstrate reliability and build trust with creditors.
Credit Utilization: Your credit utilization ratio (the amount you owe relative to your credit limit) plays a crucial role in your credit score. By using your Self Visa® Credit Card responsibly, you can manage your credit utilization effectively.
Average Age of Accounts: The Self Visa® Credit Card adds to the average age of your accounts, which is another factor considered by credit bureaus. A longer credit history generally reflects positively on your creditworthiness.

Let’s explore the key differences between secured and unsecured credit cards:

Unsecured Credit Card:

- Definition: An unsecured credit card does not require a security deposit or collateral.
- Access: Easily accessible to people with average to excellent credit scores.
- Lending Basis: The credit card issuer evaluates your creditworthiness based on your payment history and reliability.
- Risk to Lenders: Since there’s no collateral, unsecured cards are riskier for lenders.
- Credit Limit: Typically, the credit limit is determined by your credit history.
- Payment Responsibility: Cardholders must make at least the minimum payment by the due date to avoid fees and credit score damage.
- Interest: Paying the full balance before the due date helps avoid interest charges.

Secured Credit Card:

- Definition: Secured credit cards are backed by an upfront cash deposit from the cardholder.
- Collateral: The deposit serves as collateral, reducing risk for the lender.
- Target Audience: Good for those with limited credit history who want access to a credit card.
- Credit Building: Payments are reported to credit bureaus, allowing cardholders to establish or improve their credit score over time.
- Deposit Equals Credit Limit: The deposit amount usually equals the credit limit.
- Risk Mitigation: If you default on payments, the lender keeps your deposit.
- Graduation: Some secured cards allow you to graduate to an unsecured card with responsible use.

Bottom Line:

- Unsecured cards are more common and don’t require collateral, but they often have higher credit score requirements.
- Secured cards are a stepping stone for building credit and provide a structured path to financial health.

The Self Visa® Credit Card is designed for individuals who want to establish or improve their credit history.

What Is a Secured Credit Card?
- A secured credit card is a type of credit card that requires a cash security deposit when you open the account.
- The deposit serves as collateral and reduces the risk for the credit card issuer.
- If you fail to pay your credit card bill, the issuer can use the money from your deposit to cover the outstanding balance.
- Secured cards are typically available to people with bad credit or no credit history.
How Does It Work?
- When you apply for a secured credit card:
  - You provide an initial cash deposit to the card issuer.
  - The deposit amount is often equal to the credit limit of the card.
  - For example, if you deposit $500, your credit limit will also be $500.
- Key points about secured credit cards:
  - Credit Building: Using a secured card responsibly helps you build or improve your credit history.
  - Payment Behavior: Make timely payments to demonstrate reliability.
  - Credit Utilization: Keep your credit utilization low (the ratio of your balance to your credit limit).
  - Graduation: Some secured cards allow you to graduate to an unsecured card after a period of responsible use.
  - Reporting to Credit Bureaus: Ensure that the card issuer reports your activity to credit bureaus.
  - Interest and Fees: Be aware of interest rates and any fees associated with the card.
Why Choose a Secured Credit Card?
- Credit Building: Secured cards provide a structured way to build credit.
- Access to Credit: Even with poor credit, you can access credit through a secured card.
- Safety Net: The deposit acts as a safety net for the issuer, making approval more likely.
- Path to Unsecured Cards: Responsible use may lead to an upgrade to an unsecured card.
- Financial Discipline: Using a secured card encourages financial discipline.
Tips for Using a Secured Credit Card Effectively:
- Pay on Time: Always pay your bill on time.
- Keep Balances Low: Aim for a low credit utilization ratio.
- Monitor Your Credit: Regularly check your credit reports.
- Upgrade When Ready: After building credit, consider transitioning to an unsecured card.

No Additional Upfront Costs:

Your Credit Builder Account savings progress secures your Self credit card without requiring additional money upfront.
You choose what portion of your savings progress is used to secure your card and set your limit.

Potential Credit Limit Increases:

Accounts in good standing may have opportunities to increase the credit limit over time.
As you demonstrate responsible credit behavior, your creditworthiness improves, allowing for potential limit adjustments.

Buying Power:

The Self Visa® Credit Card can be used wherever Visa credit cards are accepted in the U.S.
It provides you with the financial flexibility to make purchases and build credit simultaneously.

Remember that individual results may vary, but the Self Visa® Credit Card provides a structured path to building credit while saving money. Apply for a Credit Builder Account today and take control of your financial future!