Many are turning to credit cards that can help up their standing on the credit score scale:
• Millions of Americans with subprime credit scores don’t have access to credit cards or any other reasonably priced way of borrowing money.
• Income volatility has doubled in the past 30 years, and as a result many of these people are unprepared to cover unexpected expenses that pop up, like medical bills or car repairs.
• Instead, when they’re cash crunched, they often turn to expensive options like payday loans, which commonly charge interest rates of 400%.
• Thousands are trying a new credit card that’s filling the void left by traditional banks. It uses analytics to target subprime borrowers who are on the upswing and offers an unsecured credit card with transparent terms and rates far below payday loans.
If you’ve got a credit score below 600, chances are you’ve messed up. Late payments. Foreclosure. Maybe you’ve been through a bankruptcy.
Getting a credit card in these situations can be pretty difficult, for obvious reasons: It’s not worth the risk to many lending institutions.
But Americans with bad credit are often the ones that need loans the most. In the absence of reasonably priced lending, many resort to alternatives with exorbitant interest rates to stay afloat, like payday loans — an industry that has grown massively over the past decade or so.
Sometimes this works as an expensive stop gap, but often people get sucked into a cycle of debt and struggle to come back up for air.
Marla Blow thinks she can help. A card industry veteran who spent nearly a decade at Capital One and helped run the credit card and payments division at the Consumer Financial Protection Bureau, Blow recently helped launch a startup called FS Card, whose sole product at the moment is a credit card targeted toward those with tarnished credit histories.
The card, which is called “Build” and has MasterCard branding, enables customers to avoid the local payday lender’s sky-high rates and gradually mend their standing in the eyes of the almighty FICO.
FS Card’s strategy is to target “deep subprime customers” in the 550 to 600 credit score range, a group that’s largely been overlooked and forgotten by the big banks, according to Blow, the company’s CEO. By offering transparent rates and fees and low spending limits to start, Blow thinks she can carve out a profitable business that also helps people repair their financial bedrock.
It’s off to a good start: Some 50,000 people have signed on in about a year and a half.
“We’ve found really good traction,” Blow told Business Insider. “Access to mainstream, reasonably priced credit is still something the underserved market is very much seeking.”
Read the rest at: http://www.businessinsider.com/build-credit-card-helps-people-with-bad-credit-scores-2017-5
Press releaase on offering credit online via a real time servoffer service:
(GLOBE NEWSWIRE) — As financial institutions seek to improve customer experiences online, TransUnion (NYSE:TRU) today announced the launch of Find My Offer to help lenders deliver relevant credit offers to consumers online. Find My Offer is a set of configurable white-label web screens that support a lender’s consumer prequalification and digital prescreen initiatives.
“Consumers are more empowered to be active participants in the credit process than ever before. They want to view relevant product options immediately when they reach a financial institution’s website,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. “However, financial institutions struggle to get the necessary IT resources and priority to build sites quickly and cost effectively. Find My Offer delivers an easy-to-implement microsite that is already integrated with real-time credit and identity decisioning solutions.”
Lenders can use Find My Offer to acquire new customers and expand existing relationships online. The site automatically integrates with TransUnion’s DecisionEdge suite, allowing lenders to use their existing underwriting criteria for their online marketing. Consumers arrive at a financial institution’s website and are re-directed to the Find My Offer site to start the prequalification process. TransUnion uses proprietary data, the consumer’s prequalification answers and the lender’s underwriting criteria to present the consumer with relevant, prequalification offers in real time.
For digital prescreening, TransUnion can match a device to an individual on the lender’s prescreen list and deliver a relevant firm offer of credit through online advertising. When a consumer clicks a banner ad, they are presented with the lender-branded Find My Offer site that describes the offer. “In addition to increased speed to market, each financial institution is assigned a dedicated Find My Offer project manager who will work with the company to ensure consistency with creative, compliance, and decisioning strategies,” added Siegfried.
Top Bank Uses Find My Offer to Reduce Development Costs and Increase Speed to Market
Early adopters of Find My Offer are already realizing impactful benefits from the solution. A top 20 national bank recently utilized Find My Offer to increase online acquisitions. Its IT team estimated a six month development cycle to build a customer-facing site to initiate credit offers online. Using Find My Offer, the bank saved more than 40% in development costs and was able to present relevant, tailored offers to consumers within three weeks – approximately 20 weeks earlier than what was projected using internal IT resources.
“Using Find My Offer, lenders have flexibility to seamlessly integrate the microsite with their own website, with added confidence that their offers are matching underwriting criteria,” added Siegfried. “Find My Offer significantly improves not only the consumer online experience, but also the speed at which lenders can present a relevant offer.”
To learn more about Find My Offer, visit transunion.com/find-my-offer.
About TransUnion (NYSE:TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
Online credit gets a new wrinkle, according to this announcement from Amazon:
Let’s be honest with each other here — who really likes spending an hour at GameStop trying to figure out what to do with our whopping $17.50 in store credit and ending up finding nothing we like? Well, now a new program will be starting on Wednesday to help gamers get the most out of that credit somewhere that may actually matter.
This is one of many pictures going around this weekend of the new Amazon Cash Program, which is being leaked by GameStop employees (since it seems to be another decision the company made without alerting their stores it was coming). The system will allow you to transfer your GameStop credits over to your Amazon account to use on their website.
GameStop isn’t the first company to do this, but considering their business model relies much more on purchasing physical copies than digital, it may be a wise move for them to stay in business in the short term — it will now encourage a percentage of gamers to come trade in old titles so they can use the credit on things they want to buy elsewhere. Which, to me, sounds like an awesome plan — I could throw in some old Xbox 360 titles and get a couple books or DVDs in exchange.
Unfortunately, there’s no indication as to whether the program works both ways and will allow you to use Amazon Cash to purchase GameStop titles.
More at: https://www.bleedingcool.com/2017/06/04/amazon-online-credit-feature-gamestop/