While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.
In 2020, young companies like Grow Credit, TomoCredit and Chime launched or expanded credit cards that are available to those with less-than-ideal credit – because they don’t run a credit check at all. Instead of relying on the traditional FICO credit scoring model, these “fintech” products can evaluate alternative factors like bank accounts and money management to determine eligibility.
What’s more, these cards don’t feature annual fees or even APRs. It’s literally not possible to carry a balance on them.
Here’s how this new breed of credit cards differs from traditional cards and why they’re easier to get, even in tough times.
HOW STARTUPS CAN EVALUATE APPLICANTS DIFFERENTLY