Banks to offer credit cards to people without credit scores
Banks will soon issue credit cards to those without traditional credit scores, potentially helping millions of Americans borrow.
CREDIT: People without credit scores will soon be able to get credit cards
- Thread starter playahaitian
- Start date
28%!?!? You mean 82%? People with good credit have 28% APR’s. Credit cards ain’t shitI am sure they will be happy as hell to issue cards with $500 limits and a 28% APR
Was just about to say. As more and more people stop using theirs/paying them off. They need new marks.I am sure they will be happy as hell to issue cards with $500 limits and a 28% APR
Banks to offer credit cards to people without credit scores
PUBLISHED WED, MAY 19 20219:52 AM EDT
Carmen Reinicke@CSREINICKE
It will soon be possible to get a credit card even if you don’t have a credit score.
As early as this fall, banks such as JPMorgan Chase, Wells Fargo and U.S. Bancorp will launch a collective pilot program that factors in data from applicants’ savings and checking accounts to boost their chances of getting a credit card, the Wall Street Journal reported.
The program will include data from across banks and is aimed at helping those who are financially responsible but haven’t been able to build credit apply and get credit cards, signaling a major shift in access that could help millions of American adults establish and boost credit.
“It can definitely be a game changer for those that perhaps haven’t been able to be afforded the opportunity to extend credit previously,” said Greg Giardino, a certified financial planner and financial advisor at J.M. Franklin & Company in Tarrytown, New York. “I think it’s a great idea.”
What to know about credit scores
A credit score is basically an assessment of risk that financial institutions use to determine how to lend to consumers. Without a credit score, it can be difficult to access certain things such as credit cards and bank loans, and lenders won’t give those borrowers as favorable terms.
People who only pay for things with debit cards or cash or are new to the U.S. often don’t have credit scores and may rely on things such as payday loans for credit.
There are about 53 million U.S. adults who do not have traditional credit scores, according to Fair Isaac Corp., creator of the FICO metric. Of those, Black and Hispanic adults are more likely than their white or Asian counterparts to not have a traditional credit score, according to a 2015 report from the Consumer Financial Protection Bureau.
A FICO credit score is calculated using factors such as payment history, total debt, types of credit, new credit and credit duration. It does not consider income, savings, utility bills, debit transaction or your job status.
“There’s always been a little bit of a catch-22 in the way the system has worked,” said Rutger van Faassen, head of product & market strategy for FBX at Informa Financial Intelligence. “You have to have a good credit score to get credit, right?”
He added this is also an issue for immigrants, and one he’s faced — when he moved to the U.S. from the Netherlands 15 years ago, he nearly had to start over even though he had established credit in another country.
Of course, there are some ways to build credit without having a credit card, such as using a credit builder, using a service that includes rent on a credit report or by paying installment loans (student debt, auto loan or mortgage) on time. But, generally having and effectively using a credit card is the best way to build solid credit over time.
Credit cards can be a valuable financial tool
A credit card — if used correctly — can be an important and helpful financial tool, according to Giardino.
For one, a credit statement can be helpful for budgeting as it creates an easy reference point for how you’re spending, he said. It can also help those that have limited cash flow pay for essentials when they need them instead of waiting for a paycheck.
And, many cards come with perks that give extra points or cash back for certain purchases.
“That can be really helpful and meaningful,” said Giardino.
In addition, using a credit card correctly — meaning paying it in full and on time every month — will build your credit score. Having a solid credit score can save consumers in the long run if they take on any other loans.
“Car loans, mortgages, any type of borrowing you can think about has a lot to do with that score,” Lawrence Sprung, CFP, founder and wealth advisor at Mitlin Financial in Hauppauge, New York.
Having a good credit score, generally 670 or higher, could save a borrower thousands of dollars over the lifetime of the loan and repayment, said Sprung.
That’s because people with better credit scores are seen as less risky to lend to and given better terms, such as lower interest rates, when they borrow.
But they also come with risks
Of course, there are also pitfalls associated with credit cards, and if not used effectively, they can be damaging to one’s credit score.
If someone overspends and can’t pay off the full statement balance or pays their bill late, high interest will accrue and dig them deeper into debt.
Banks and other financial institutions should help make sure that people getting credit cards for the first time are using them wisely, according to Sprung.
“Whether you have a credit score or not, it’s important to have that educational component,” he said, adding that this is especially important as those who don’t have traditional credit scores but want credit cards will have to have banking relationships.
This also means there’s a chance for banks to encourage the under banked or unbanked to establish a relationship with them, he said.
PUBLISHED WED, MAY 19 20219:52 AM EDT
Carmen Reinicke@CSREINICKE
It will soon be possible to get a credit card even if you don’t have a credit score.
As early as this fall, banks such as JPMorgan Chase, Wells Fargo and U.S. Bancorp will launch a collective pilot program that factors in data from applicants’ savings and checking accounts to boost their chances of getting a credit card, the Wall Street Journal reported.
The program will include data from across banks and is aimed at helping those who are financially responsible but haven’t been able to build credit apply and get credit cards, signaling a major shift in access that could help millions of American adults establish and boost credit.
“It can definitely be a game changer for those that perhaps haven’t been able to be afforded the opportunity to extend credit previously,” said Greg Giardino, a certified financial planner and financial advisor at J.M. Franklin & Company in Tarrytown, New York. “I think it’s a great idea.”
What to know about credit scores
A credit score is basically an assessment of risk that financial institutions use to determine how to lend to consumers. Without a credit score, it can be difficult to access certain things such as credit cards and bank loans, and lenders won’t give those borrowers as favorable terms.
People who only pay for things with debit cards or cash or are new to the U.S. often don’t have credit scores and may rely on things such as payday loans for credit.
There are about 53 million U.S. adults who do not have traditional credit scores, according to Fair Isaac Corp., creator of the FICO metric. Of those, Black and Hispanic adults are more likely than their white or Asian counterparts to not have a traditional credit score, according to a 2015 report from the Consumer Financial Protection Bureau.
A FICO credit score is calculated using factors such as payment history, total debt, types of credit, new credit and credit duration. It does not consider income, savings, utility bills, debit transaction or your job status.
“There’s always been a little bit of a catch-22 in the way the system has worked,” said Rutger van Faassen, head of product & market strategy for FBX at Informa Financial Intelligence. “You have to have a good credit score to get credit, right?”
He added this is also an issue for immigrants, and one he’s faced — when he moved to the U.S. from the Netherlands 15 years ago, he nearly had to start over even though he had established credit in another country.
Of course, there are some ways to build credit without having a credit card, such as using a credit builder, using a service that includes rent on a credit report or by paying installment loans (student debt, auto loan or mortgage) on time. But, generally having and effectively using a credit card is the best way to build solid credit over time.
Credit cards can be a valuable financial tool
A credit card — if used correctly — can be an important and helpful financial tool, according to Giardino.
For one, a credit statement can be helpful for budgeting as it creates an easy reference point for how you’re spending, he said. It can also help those that have limited cash flow pay for essentials when they need them instead of waiting for a paycheck.
And, many cards come with perks that give extra points or cash back for certain purchases.
“That can be really helpful and meaningful,” said Giardino.
In addition, using a credit card correctly — meaning paying it in full and on time every month — will build your credit score. Having a solid credit score can save consumers in the long run if they take on any other loans.
“Car loans, mortgages, any type of borrowing you can think about has a lot to do with that score,” Lawrence Sprung, CFP, founder and wealth advisor at Mitlin Financial in Hauppauge, New York.
Having a good credit score, generally 670 or higher, could save a borrower thousands of dollars over the lifetime of the loan and repayment, said Sprung.
That’s because people with better credit scores are seen as less risky to lend to and given better terms, such as lower interest rates, when they borrow.
But they also come with risks
Of course, there are also pitfalls associated with credit cards, and if not used effectively, they can be damaging to one’s credit score.
If someone overspends and can’t pay off the full statement balance or pays their bill late, high interest will accrue and dig them deeper into debt.
Banks and other financial institutions should help make sure that people getting credit cards for the first time are using them wisely, according to Sprung.
“Whether you have a credit score or not, it’s important to have that educational component,” he said, adding that this is especially important as those who don’t have traditional credit scores but want credit cards will have to have banking relationships.
This also means there’s a chance for banks to encourage the under banked or unbanked to establish a relationship with them, he said.
WSJ News Exclusive | JPMorgan, Others Plan to Issue Credit Cards to People With No Credit Scores
Some of the largest U.S. banks plan to start sharing data on customers’ deposit accounts as part of a government-backed initiative to extend credit to people who have traditionally lacked opportunities to borrow.
www.wsj.com
Majority of Americans credit is still jacked up from the Great Recession.
And folks who went thru the Great Recession, majority, or all of them said Fuck Credit Cards and are living life without them with no problems.
It’s obvious the banks need new blood. So go after the poor is there plan.
Unfortunately, a lot of poor folks will get bamboozled into getting these cards…..and take a wild guess who will suffer the most….it’s like a pre-determined Destiny with our people to get fucked over.
And folks who went thru the Great Recession, majority, or all of them said Fuck Credit Cards and are living life without them with no problems.
It’s obvious the banks need new blood. So go after the poor is there plan.
Unfortunately, a lot of poor folks will get bamboozled into getting these cards…..and take a wild guess who will suffer the most….it’s like a pre-determined Destiny with our people to get fucked over.
The crazy thing is that as bad as some of these credit card APRs and car note terms can be, they are nothing compared to the payday loan bullshit out there.
You mean 35% and better.I am sure they will be happy as hell to issue cards with $500 limits and a 28% APR
I just opened an offer in the mail and saw that today. Can't believe rates are even allowed to go so high. That's criminal.
Credit cards, if you pay it off monthly and don't use the monthly interest rates, can be the best way to build credit quickly. Just don't run a monthly balance. I use it, for security of my debit card not being exposed and that majority of anything you buy on a credit card is protected.
Avoid cards with member fees or admin fees.
It really just depends on your needs and how you use them. I have an amex and a chase sapphire that I use for everything and they both have high annual fees. However, 1-2 months of the perks and benefits offset the annual fees and I don't carry a balance. I agree with you about not ever using a debit card though. I use my amex for anything larger than $100 just because they are so aggressive in the event of a dispute and also usually have some perk/discount going on.
Its funny because I am 40+ now but you couldn't tell me shit when I got my first work amex when I was in my 20s.
And be wary of hard credit pulls from the company. I'm downgrading my savor card as I don't hustle that 4 percent on restaurants as before. Invest in a cookbook and enjoy life.
But those cash back cards are the best, especially when combining them app discounters. I save a lick in Houston with GetUpside. I used to try to put people on my area but people want to stay broke.
I am sure they will be happy as hell to issue cards with $500 limits and a 28% APR
I started off with a card like that now I have a black card
ppl still dint wanna accept shit thats right infront of their eyes
Man they just need
Debt
Money doesn't run u.s.a
Fucking
DEBT is king when you have been reduced to a service nation
Thanks England
Thanks sellout govt
Debt
Money doesn't run u.s.a
Fucking
DEBT is king when you have been reduced to a service nation
Thanks England
Thanks sellout govt
Who doesn't have a credit score at all tho? Most people start off with a credit card. How is this anything new? Is this for illegals?
At one point I had a student loan ( eventually paid off on time), car note (eventually paid off on time) and a bull shit credit card I got tired of and dumped it. When applying for new credit, I was all of sudden being told I had no credit history. How the fuck did that even make sense, especially since the payoff debt was under 7 years? It should have still been listed on my credit report, in theory anyway.
As for the rest, some people refuse to ever use a credit card or take out loans. They feel they are doing the smart thing by paying for everything in cash.
Teenagers, hustlers, senior citizens that are cash everything, etc
Seems like having no credit history and no credit score would be two different factors. I mean your credit score has to start somewhere right? Seems like no credit score would be impossible. I thought it when down to 300.
BUY NOW, PAY LATER!
BUT NO LATER THAN THE END OF THE MONTH to avoid interest payments!
people gotta be smart~
DEBT = Slavery
To me, it's the security of keeping thieves away from my debit card.
Three times now over the past 3 yrs, I had my debit card hacked/cloned. It's a nuisance but now just use credit cards to buy practically everything, don't care if it's a $3 cup of coffee.
Its securing my bank acct is what's important to me. Building my credit is just a plus but I literally have nothing in debt but my house.
Last edited:
I do this too. Debit cards offer no protection at all while the credit card companies will aggressively fight on your behalf.
I beg to differ. CCs are an
excellent way to build and
keep a good credit rating.
I use CCs for ALL transactions
that most people would use
cash for. Then, every month, pay
the full balance back to zero. I
just cashed in $760 worth of
cash back dollars straight back
into my account, all because I use
the card for so many purchases
each month. Its free money and
my credit scores are >800.
I mean credit card companies ain’t shit. They prey on the poor.
Oh yes, foolish people get taken
thru the ringer leaving a balance
every month. Then it turns into
a vicious, neverending cycle.
Them cash back rewards are weak too though. You need to spend multiple thousands just to get a measly $100 back. It’s a trap. There’s a commercial where a business owner talking about he got $21k back in rewards money. He had to have spend over a million dollars to get that much back.Oh yes, foolish people get taken
thru the ringer leaving a balance
every month. Then it turns into
a vicious, neverending cycle.
I put about 2,500, 3k on my Amex
each month and after several
months I cash in a few hundred
dollars, free money fir spending
money with my card that I was
going to spend anyway.
I like free money.
The minute black ppl as a whole start getting good credit is the minute there'd be a new system in place replacing it and preventing black ppl from obtaining wealth.
Credit scores, prison system, systemic racism is the method employed to prevent us empowering ourselves.
Credit scores, prison system, systemic racism is the method employed to prevent us empowering ourselves.
The poor ain't poor because of lack of discipline
Nothing wrong with it at all. In fact this is a good thing.
When you put all your bills on a credit card and pay off that card in full at the end of every month you improve your credit score and avoid the needs of overdrafts and payday loans when times are tough. It also essentially extends the due date on your bills by 30 days.
The problem is that most Americans treat credit card like a source of free money while the rest treat them like a vampire treats a cross. However, if used correctly they can improve your credit and save you thousands of dollars every year.
I got my first credit card 3 months after my green card showed up in the mail. Signing up was one of the best decisions of my American life.
When you put all your bills on a credit card and pay off that card in full at the end of every month you improve your credit score and avoid the needs of overdrafts and payday loans when times are tough. It also essentially extends the due date on your bills by 30 days.
The problem is that most Americans treat credit card like a source of free money while the rest treat them like a vampire treats a cross. However, if used correctly they can improve your credit and save you thousands of dollars every year.
I got my first credit card 3 months after my green card showed up in the mail. Signing up was one of the best decisions of my American life.
Actually they are man. Kids no. The parents?
If you know you broke and fucked up you have the discipline not to have kids and put them in that situation!
You go to school, pay attention, get the best grades, apply for scholarships, grants, aid.. use money and flip.
Network!
If you know you broke and fucked up you have the discipline not to have kids and put them in that situation!
You go to school, pay attention, get the best grades, apply for scholarships, grants, aid.. use money and flip.
Network!
Similar threads
