It's a great feeling to be finally granted access to a credit card, which truth be told is really challenging to qualify for, especially for people with poor financial records. Petal, a Company Specialized in granting Financial Services and Credit Cards, has come up with a new strategy to do away with the hassles of acquiring a credit card. Petal co-founder, Jason Gross made this known a while ago. He went on further to reveal that this was the very reason the company was founded in the first place. The Company is essentially concentrated on picking out Candidates who lack credit record but could be potential good credit card holders, all weighted on a variety of customer actions other than just credit score. $13 million was reportedly raised by the company through Valar Ventures in a recent fundraiser.
With a keen eye on societal developments, its founders feel like a lot more needs to be done to enable more people have access to credit cards, citing a lot of inadequacies in the banking system. He revealed that the old method of credit scoring created 60 years back with a small range of data-set was the sole Information available then, and is no longer sufficient to catch up with modern trends. This Outdated Financial data unfairly leaves certain classes of people at a loss. Fortunately, the improved data-sets are widely available but are still waiting to see the implementation in the business World.
The No. 1 service Petal's trying to roll-out is that of a credit card, where eligibility is based on digital records grown and relayed from customers. The End user will have his/her entire Financial records monitored in areas like; savings, earnings and spendings while Special Promo Offers on New Products will continuously be made by the Company. This is quite opposed to the traditional method of monitoring Users 'borrowing Records' alone. The vision of the startup is to see that responsible people get access to credit cards and use one as efficiently as possible.
The category of people who are the main focus of the company, are the youths owning credit cards for the first time, including those without an enabling environment to grow their credit worthiness as well. Gross, emphasized here that “If you look at folks who are thin-file, credit invisible, those who don’t have an accurate score, they’re predominantly young people but they’re disproportionately
groups that have historically lacked access to financial services,” . “Minorities, immigrants, if you lack a score — or an accurate score — it can cost you very real money throughout your life. Having no score, you’re treated as subprime, you won’t qualify for most financial products, or they’ll be more expensive and inferior.” He aspires that the manner in which, people use the Petal credit card will be simplified and trimmed to users satisfaction (for instance informing them of their account balances and payable interests within a certain duration after some part-payments).
Progress at last! at least in this case, is that of Petal stating that customers who successfully grow their credit Worthiness overtime, will qualify for higher-grade cards such as the Chase Sapphire line. It does however, wish to provide more attractive rewards and increased limits in parallel with its competitors.
“We can grow with our customers,” Gross stated. “We don’t have the same overhead as a Chase or a Bank of America. We’re not burdened by brick and mortar operations, we’re able to operate more efficiently. We can pass that value along to the customer. We’re able to underwrite or price credit risk that’s more accurate, and that allows us to lower the cost of credit. We can continue to offer our customers a compelling economic value proposition as they move through their financial life. That’s able to offer products with no fees, higher limits, over time being able to offer other sorts of benefits associated with the products.”
Deserve, a side competitor to Petal is also not showing signs of slowing down after raising $12 million in October last year. Its goal is planely in line with that of Petal's. As their quest to put credit cards into the hands of people with virtually no track-record of financial buoyancy but who are likely to grow their credit history materializes, Banks will as always continue to base users credit card qualification on "credit score", inspite of its shortcomings as the only Platform for granting them credit cards.