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Look out, Credit Sesame now offers more than just free credit scores and credit report information.
They have a new credit building account called Sesame Cash that works like a debit card and reports like a secured credit card. The debit card aspect allows you to save money by avoiding credit card debt.
And the Sesame Cash account comes with Credit Sesame’s other tools, like credit monitoring, a free credit score, identity theft protection, and resources to help you achieve your financial goals.
But how exactly does the Sesame Cash account work?
What is Sesame Cash?
The Sesame Cash account offered by Credit Sesame is an online banking account that can help you build credit.
Before opening a Sesame Cash account, you will first need to have an account with Credit Sesame. This can be their free credit monitoring account or one of their paid premium accounts.
The initial setup for a Sesame Cash account is just like any other online banking account. You fill out your information, transfer/deposit money, and get a debit card in the mail a few days later. You can even set up direct deposit on your account.
But Sesame Cash offers an additional account feature for building credit. By using some of your bank account balance to set up a credit line, you can start building credit. No credit check is required.
There is nothing special you have to do, just swipe your debit card like normal. Credit Sesame does all the work in building your credit history in the background.
The account will report to the credit bureaus like a credit card.
The Sesame Cash account also comes with a whole host of other features you often find with an online bank account, including cashback offers, a free credit score, rewards for improving your credit score, and more.
If you’d like to see a side by side comparison between Credit Kharma and Credit Sesame, check out our article, Credit Karma vs. Credit Sesame.
How Does Sesame Cash Work?
If you decide to use the credit building feature of the Sesame Cash account, the first thing you will need to do is select a portion of your account balance to transfer over to the credit line. This cash serves as a security deposit and establishes your credit line.
So if you transfer $500 from your bank account to your credit line, your credit limit will be $500.
You then have the option of setting your own utilization rate. The ideal credit utilization rate is 10% or less. So with a credit limit of $500, an ideal utilization rate will be $50 or less.
From here on out, your work is done.
Each month, Credit Sesame will look at your purchases and select ones that total up to less than or equal to your preset credit utilization value. I.E., three $15 purchases to stay below $50.
Then because the purchases have already been paid for using your debit card, Credit Sesame marks this ‘balance’ as paid.
Finally, Credit Sesame sends all of this information, balance, credit limit, and payment history, to all three credit bureaus monthly.
On your credit reports, this information will appear and be weighted like a revolving account and will help you build credit in much the same way a secured credit card would.
Sesame Cash Pros
There are many advantages to opening a Sesame Cash account, particularly if you are looking to improve your credit score.
Free Option for Building Credit
There is no fee charged to open a Sesame Cash account. Nor is there any annual fee, foreign transaction fee, or interest charged.
And if you use one of their 55,000+ ATMs, you can avoid ATM fees as well.
The only kind of fee that you will ever have to pay outside of using an out-of-network ATM is the initial security deposit you need to provide to establish your credit line. And even this cost is 100% refundable if you ever need to close your account.