New secured credit card helps consumers to build their credit history and improve FICO® Scores
SAN FRANCISCO, August 18, 2022– Bond Financial Technologies Inc., the leading embedded finance platform, today launched a breakthrough new Credit Builder Card that makes it simpler for fintechs and brands to offer secured credit cards to their customers.
The new secured credit card, which is powered by the Mastercard network and issued by Bond sponsor bank, Evolve Bank & Trust, gives consumers the ability to spend only funds they have with the added benefits of building a credit history that can help credit-challenged consumers take control of their financial futures.
In the U.S. alone, over 150 million individuals are considered financially at-risk, according to Experian and U.S. Census data. These financially at-risk consumers continue to face pressure when it comes to managing their finances – from high inflation to economic uncertainty. Nearly one-third of U.S. consumers have a subprime credit score, defined as between 580 to 669, including 40% of millennials, who make up “the highest ratio of subprime consumers of any generation,” according to Experian. Additionally, an estimated 49 million U.S. consumers are classified as either “credit invisible” or “unscorable.”
Secured credit cards allow consumers to develop a credit history which may enable them to secure mortgages, auto loans, and other financial services at better rates. In partnership with Bloom Credit, payments made with Bond’s Credit Builder Card will be reported to the credit agencies just like with a traditional credit card, which can help consumers establish and improve their FICO Score, which 90% of lenders use to evaluate a person’s credit risk.
Brands offering this secured credit card will have stronger value propositions to serve customers seeking a path to greater financial stability. In fact, recent research from Cornerstone Advisors shows the majority of U.S. consumers want to secure financial products directly from their favorite brands and that 32% will spend more with brands they bank with than they did previously.
Bond has created a simple way for brands to build and offer secured credit cards with the following benefits:
- Require no consumer credit checks: Building credit does not actually require a credit check because the spend limit is secured by a balance.
- Build credit history: Monthly repayment histories are automatically sent to credit bureaus to build credit history for customers.
- Improve customer acquisition and conversion: Unsecured credit card programs could have sizable declines that impact high-value demographics such as millennials, which saw 32% rejection rates for credit products during the pandemic.
- Built-in security features: The physical card is contactless and features Mastercard ID Theft Protection™ and Zero Liability Protection designed to detect fraud and protect cardholders from unauthorized transactions in store, by phone and online.
“We’re in the middle of a huge shift in access to credit,” says Roy Ng, CEO and co-founder of Bond. “Historically, access to credit has been challenging — 40% of subprime scores are represented by millennials — but advances in embedded finance are fundamentally changing this dynamic. Bond’s Credit Builder Card allows brands to offer a new, high-value financial product directly to their customers at a time when they may need it most. Consumers who build up a strong credit history will qualify for a traditional credit card and the ability to take out an auto loan or mortgage at better interest rates.”
“Now more than ever, it’s critical to provide consumers and brands with trusted, accessible and empowering payment options that meet their needs today and achieve their future goals,” said Sherri Haymond, executive vice president, Digital Partnerships at Mastercard. “We’re pleased to partner with Bond to make credit more accessible to consumers and deliver the Credit Builder Card at scale.”
“Evolve is a passionate supporter of secured credit cards and helping to bring greater financial access to the market, especially given the volatile macroenvironment,” said Hank Word, president of Evolve's Open Banking division. “We look forward to enabling brands across industries to quickly deliver Bond’s Credit Builder Cards and other financial services directly to their customers and grow with them over time.”
“Helping platforms like Bond innovate to better serve their clients is why Bloom Credit exists,” said Christian Widhalm, CEO of Bloom Credit. “An accurate credit score is essential in a system where 34% of consumers in 2021 had addressable errors on their credit reports, 58% of millennials say their credit score cost them access to credit, and 49 million Americans are either credit invisible or unscorable. Working together on Bond’s Credit Builder Card enables fintech clients to quickly launch and help consumers establish and build accurate credit scores essential to achieving their financial goals.”
- Learn how to build a secured credit card with Bond’s step-by-step technical guide.
- Discover what financial services consumers want to access from brands in Cornerstone Advisors’ Embedded Finance Flywheel report.
- Learn more about secured credit cards in this Q&A with PYMNTS.
Bond enables any company to become a fintech. Through Bond’s full-stack embedded finance platform, customers can offer personalized and compliant financial products to their end users, including high-value-add products such as consumer and commercial charge cards. Bond was founded in 2019 by industry veterans from Blackrock, Goldman Sachs, SAP, SoFi, and Twilio, with deep roots in financial services, technology and enterprise software. Bond is a remote-first company, with office locations in San Francisco, New York City and Salt Lake City. Visit http://www.bond.tech to learn more.