Self Visa Review: A Secured Card With a Low, Flexible Deposit

No hard credit check

Usually when you apply for a credit card, the issuer conducts a hard inquiry that temporarily lowers your credit scores. You don’t have to worry about that with The secured Self Visa® Credit Card. (The issuer may conduct what's known as a "soft inquiry," but those won't harm your scores.)

» MORE: NerdWallet's best credit cards with no credit check

Low, flexible deposit requirement

The secured Self Visa® Credit Card charges an upfront minimum security deposit of $100, which becomes your credit limit. That's significantly lower than the typical $200 to $300 that some other secured credit cards require. You can add more money — and thus increase your credit limit — if that's within your budget.

You can also opt to cover the deposit over time in smaller amounts by opening a Credit Builder Account, which is a secured installment loan that you'll make payments on, starting at $25 per month. The installments you pay accumulate in a federally insured certificate of deposit. You could potentially access The secured Self Visa® Credit Card with money saved up in the Credit Builder Account in three months, still without a credit check. And because a major factor in your credit scores is your "mix of accounts," having two lines of credit can be beneficial. (This option, however, comes with costs and drawbacks. More on that below.)

» MORE: What factors affect your credit scores?

Payment history reported to credit bureaus

When you use The secured Self Visa® Credit Card and pay the bill, that payment history — which is a large factor in your credit scores — is reported to all three major credit bureaus: Equifax, Experian and TransUnion. These companies record the information used to calculate your credit scores, making it an essential step in a credit-building journey. And as noted above, if you happen to also have a Credit Builder Account with Self, that can further help your scores.

You can work your way up to an unsecured Self card, with strings

As with other secured cards, if you maintain a good payment history with The secured Self Visa® Credit Card, then your deposit is refundable should you decide to close the account. But unlike a lot of other secured cards, this one also offers the possibility of eventually graduating to a traditional unsecured credit card (meaning a card that doesn't require a deposit). In this case, if you've had The secured Self Visa® Credit Card or an active Credit Builder Account for at least six months with on-time payments, you can apply for the unsecured Self Plus Credit Card, which offers a minimum starting credit limit of $200 and an annual fee of $35. (This option, too, comes with caveats you can read about below.)

An annual fee

The annual fee on this card is low — $0 intro first year, $25 thereafter — but any number of secured credit cards and starter credit cards let you build credit without this added cost. Some even go as far as charging no interest and requiring no minimum deposit requirement.

The Chime Secured Credit Builder Visa® Credit Card, Current Build Card and Varo Believe Secured card, for instance, require you to open an account with the company that offers the cards. That account is used to fund the security deposit in the amount of your choice. These cards lack upgrade paths, but crucially, they also lack annual fees and APRs.

No rewards

Rewards aren't a priority when working on your credit, but it's worth noting that some starter cards do offer modest spending incentives — unlike The secured Self Visa® Credit Card.

Take the Discover it® Secured Credit Card, for example. It requires a minimum security deposit of $200, but it offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases per quarter and 1% cash back on all other purchases. It also has a path to upgrade to an unsecured credit card. The annual fee is $0.

The Capital One Quicksilver Secured Cash Rewards Credit Card also offers rewards, earning 1.5% cash back on most purchases. It has a $0 annual fee and requires a minimum of $200 as a deposit. With a good payment history, this card also offers a pathway to an unsecured credit card.

Flexible deposit comes with costs

With The secured Self Visa® Credit Card, there are drawbacks if you choose to cover your security deposit over time via the Credit Builder Account. For starters, it means you can't access the card immediately; you'll have to wait several months. But also, the Credit Builder installment loan charges its own interest rate, and those interest charges — unlike a security deposit — will not be refundable. Self's website offers the following example: A $600 loan that you pay back in $25 monthly installments over 24 months will cost you $89, given the loan's APR of nearly 16% (as of this writing). In other words, you would get only $511 back from the $600 loan.

Obviously, $89 is cheaper than putting down $100 upfront to get The secured Self Visa® Credit Card — but again, that $89 will not be refundable, unlike the $100 option.

Add to that the card’s annual fee and any interest costs you may incur if you carry a balance. Suddenly, you’re spending as much as you would to get a more premium rewards credit card, but without the perks that make the price tag worth it.

Upgrading comes with costs, too

While it's nice to know you can work your way toward an unsecured product with Self, it's not an ideal upgrade path, assuming you're offered the option in the first place.

For one thing, unlike with The secured Self Visa® Credit Card, applying for the unsecured Self Plus Credit Card will trigger a hard inquiry on your credit, which can temporarily ding your credit scores — after you just worked to build them up with the secured product. And if you're approved for the unsecured "Plus" version, it won't directly replace The secured Self Visa® Credit Card; instead, going forward you'll have two Self cards — one secured, one unsecured, with each charging its own annual fee.