Extra Debit Card vs Self Secured Visa

Intro: Two Great Rebuilding Credit Cards Compared

The Extra Debit Card and the Self Secured Visa are two great rebuilding cards which we will be comparing today. The Extra Card is a debit card while the Self Secured is secured credit card that allows you to save and build up your security deposit through a credit builder account.

Basics of both cards

Let's now look at how both cards work.

Extra Debit Card Basics

The Extra Card is one of the rare debit cards that actually helps you build your credit because they report to both Equifax and Experian. Extra does not perform any credit checks. Instead, you have to link your bank account via PLAID to Extra. They will then analyze your account balances, cash flows and determine whether to approve you and how much you can spend on the card. Extra comes with a $7/month.

Self Credit Builder Account + Secured Credit Card

The Self Secured Visa is for those of you who could not afford to put down a minimum deposit for a secured credit card and need time to save up. You first do so by setting up a "credit builder account" whereby you are technically given a loan (though you do not get to see the cash). Self does not perform any credit checks at all. By paying off your loan every month, you will start to build your credit and the loan amount will appear in your credit builder account as you pay it off. Once you have saved an amount that you want to use as a security deposit in the Self Secured Visa, you can then open secured credit card account (once again, there is no credit check). The annual fee of the Self secured Visa is $25.

Similarities

• No Credit Checks - Both the Extra Debit Card and Self Secured Visa do not check your credit report or do any hard inquiry when you apply. As mentioned earlier, for the Extra Debit Card, you have to link your bank account via PLAID to be analyzed and your approval and limits will be based on that analysis. For Self, there are no credit checks when you apply to take out the "credit builder loan" or when you decide to get the secured credit card once you have enough deposit in your credit builder account.


• Reports to credit bureaus - Both cards report to credit bureaus though Extra only reports to Equifax and Experian and not TransUnion.

Differences

• Debit vs Credit Builder + Secured Card - The Extra Debit Card is a debit card while the Self Secured Visa is a secured credit card and prior to that, it is a credit builder account. That means the key differences are really between a debit and secured credit card


• Security Deposit needed for Self Secured - Because Self Secured Visa is a secured credit card, you need a security deposit, which sets your credit limit. Self allows you to "save and build up" that amount with a credit builder loan in your "credit builder account". In contrast, Extra is a debit card and there is no need to put up a security deposit. Instead, your credit limit is determined by your linked bank account.


• Pay in full vs carrying a balance - As Extra is a debit card, money will be drawn from your linked bank account when you make a purchase. In contrast, Self is a securd credit card and you will get a monthly bill which you can pay off in full or carry a balance. We suggest you always pay in full.


• Fees - The Self Secured Visa has a $25 annual fee. The Extra Debit Card charges $7/month.

Which is better? Wrong Question - Get both

As I have explained above, both the Extra and Self Secured are different types of cards though they are targeted and will appeal to rebuilders. I do not see one card as better than the other. Instead, I think it would serve a rebuilder well to get both cards. But WHY?

The reason is simple. Rebuilders typically face the problem of either not getting a credit card with reasonable fee or having gotten one, they find that the credit limit is too low. To compound that, payment holds are common and this leaves most cardholders unable to use their card when they need it because of it's low limits and payment holds. And you do need a credit card for basic things like getting an Uber ride (Uber does not accept debit cards!), renting a car (many only accept credit cards).

For rebuilders to get around this problem, it is necessary to get both a credit card (secured or unsecured) and a debit card where you can use as well. Having both the Extra Debit Card and Self Secured Visa is an ideal match. You can use the Extra Debit Card for regular purchases and use the Self Secured Visa for expenses like Uber, car rentals etc. You just have to make sure that you have enough security deposit (and hence credit limit) for the Self secured card to enable you to use it when you need it. By using the Extra Debit Card for your regular spending, you will never get into any credit card debt.

To sum up, I do not think either card is better than the other. They are just different type of cards but I would recommend getting both as a rebuilder. Both reports to credit bureaus and if you use the Extra Card or everyday spending, it not only reports to credit bureaus but you also will never get into debt. Then have the Self Secured as a card to use for things like Uber, car rentals, hotel bookings etc.