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How does the Self credit card work?

Do you still make your monthly payments until term? Once you’ve completed your loan term does your card close out? Or does it turn into a revolving line of credit that can stay open forever? If so, does the type of account change on your credit report or will there be an additional account on your report? If you close the credit card will it affect your credit negatively the same as a normal credit card would? And when closing the credit card account do you receive your money back in full the same as if you payed off your loan? I have so many questions as to what happens to the existing loan account and the technicalities of the changes made! TIA!

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4 Comments

  1. They take out a loan, then put it in a separate account that earns interest. You make payments till the end of the loan, then they give you your original “loan” amount from the savings. The idea is to show on time loan payments and doubles as a small savings account.

    Personally, I like SeedFi better. It’s a smaller company but does the same thing for much cheaper. I’m not affiliated with them in any way, just a customer.

  2. yes it will affect score negatively if closing the account i just closed mine by paying it off and it dropped my score

  3. So the way it works is it’s designed to be used as a “two-fer”. A term loan and a revolving line of credit (card). The “loan” is taken out and placed in a CD that you make payments on as if it was a real loan. The loan has interest on it just like any loan. As you make payments you can then transfer those paid funds to a secured card (once you reach a certain threshold and then after on a regular basis as enough funds are available as paid on the loan).

    If you reach a certain credit limit, or amount of secured funds held, on the card you can then decide for the loan to either hold the funds paid on the loan until the term ends or change to immediate payout which returns the funds regularly.

    When the loan ends you have two options: transfer any remaining funds to the secured card OR have the “loan” paid out to you and the loan account closed (if you weren’t already returning the funds to yourself regularly). If you transfer the funds to the secured card (either during the term or at the end) then that card stays open with those funds remaining with them to secure the card.

    You have an option of starting a new “loan” and again using those funds to apply to the secured card but keep in mind that the secured card has a top limit of $3k – and once you reach it then it won’t go any higher. Also note that in some cases they do grant some unsecured portion of the credit limit – I haven’t had it happen to me but some on reddit have said they’ve had it happen for them.

    Even with the fees\interest I’ve been very pleased with the program and it, to me, was worth it to have both account types as it accelerated my recovery from bankruptcy. Hope this helps.

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