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A12 BUSINESS
Friday 7 July 2023
Millennial Money: The credit-building

road with alternative credit cards could

be bumpy

By MELISSA LAMBARENA
of NerdWallet
Getting a first or second
chance to build credit with
a credit card has been
easier in recent years be-
cause financial technol-
ogy companies have cre-
ated alternative options.
These new cards often
evaluate applications dif-
ferently from traditional
credit cards, with algo-
rithms and proprietary
methods that may put less
emphasis on credit scores
while looking at factors This Aug. 11, 2019 file photo shows Visa credit cards in New
such as your income or Orleans.
bank account balances. Associated Press
Lower costs tend to be crease in the annual per- credit card in some states
a hallmark, too: Some of centage rate and any sig- in 2019, eventually taking
these products advertise nificant changes in terms,” it nationwide in 2020. The
no security deposit, no an- says Lauren Saunders, as- card lets you build credit
nual fee and no APR. sociate director at the Na- by using it to pay select
“Many fintechs are really tional Consumer Law Cen- bills, up to a low monthly
focused on offering prod- ter. Still, compared with a spending limit. It’s linked
ucts to people that other- more established credit to a membership plan with
wise would not qualify for card, an alternative card various tiers and prices, in-
them at a major institution,” from a fintech is more likely cluding a free option. But
says Nick Roberts, chief to experience frequent at launch, the card had
marketing officer at Grow changes to its terms and only a single free tier.
Credit, a financial tech- features. These updates The company added the
nology company based in may either be welcome other membership levels
California. “There is a lot of additions or disappointing which may unlock addi-
focus with certain fintechs subtractions. tional qualifying bills and
to expand the market.” For example, a relatively higher monthly spending
But while many of these new credit card company limits over time. These ad-
relative newcomers can in- might rebrand, meaning ditions created more cred-
deed help you build credit, any number of features it-building options for those
it’s worth noting that the may change. CreditStacks without credit, according
journey might sometimes announced a namesake to Roberts.
be bumpy as the compa- credit card in 2018, but by KEEP AN EYE ON YOUR IN-
ny behind the card contin- 2020, the company and BOX
ues to scale. card were going by the TomoCredit, a fintech
EXPECT CHANGES name Jasper, sending out based in San Francisco,
All credit card compa- redesigned cards and ex- has also made significant
nies, traditional and non- panding the pool of ap- changes to its credit card’s
traditional, are allowed to plicants who might qualify. original terms. The card
make changes to your ac- It later pivoted to being a debuted in 2021 with no
count terms, although de- cash-back card for people annual fee but by 2023,
pending on what exactly is with good credit. the terms included a $2.99
changing, they must follow Since that rebrand, Jas- monthly fee and the card
certain guidelines. per’s credit card has been went on a waitlist.
“They’ve got to give you discontinued. The fintech Petal has been
a 45 days’ notice of an in- Grow Credit launched a in the credit card space for
several years, advertising
low- and no-fee cards for
customers looking to build
credit, as well as those with
good credit. Jamie How-
ard, an e-learning director
based in Tennessee, was
among those cardhold-
ers. He was told that he’d
have to pay an $8 month-
ly charge or opt out and
have his account closed.q