FinTech News
Credit Sesame Adding Credit Building Abilities to Debit Card Product
For years, building credit has been a bit of a Catch-22, in that establishing credit first requires consumers to obtain credit. This reality is something that several FinTechs have taken note of, with a growing number now offering their own solutions. The latest platform to take a swing at addressing this issue and leveling the playing field is Credit Sesame, which is rolling out a credit building feature for debit card users.
The free credit score site Credit Sesame has announced that it will be adding “credit building technology” to its Sesame Cash digital banking platform. Now, Sesame Cash customers will be able to allocate funds for credit building and the site will report debit purchase information, such as utilization, to credit bureaus as on-time payments. According to the site, customers who participated in the early access beta of the feature saw their credit scores improve by as much as 71 points in just two months. This feature (along with the Sesame Cash account itself) is free and applying will not impact a user’s credit.
This new credit-building feature joins Sesame Cash’s other unique offerings. For example, the debit card also rewards users who are able to improve their credit score. Those who deposit at least $25 into their account per month and manage to increase their score by 10 points or more during that month can earn $10. Meanwhile, an increase of 100 points or more during the month will earn users a $100 bonus. Other perks across the Credit Sesame and Sesame Cash platforms include daily credit score updates, the ability to get paid up to two days early, access to more than 55,000 fee-free ATMs, and more.
Announcing the new feature and the inspiration behind it, Credit Sesame CEO Adrian Nazari said in a statement, “We have long believed in the need for equal opportunity and inclusion in our credit and financial system. Now, the cash consumers have and the daily debit purchases they make can help build the credit score they deserve.” Nazari continued, “Credit Sesame is proud to lead the way and bring new solutions and greater financial inclusion to the industry by allowing consumers to use their cash to build their credit in a quick and simple way and pave the way for all consumers to access credit.”
There’s no question that new methods of credit building are sorely needed. Thus, it’s great to see more and more FinTechs and neobanks taking an interest in the topic. In the case of Credit Sesame, the addition of a credit building feature further helps their Sesame Cash platform stand out from the competition (namely Credit Karma and their Credit Karma Money accounts). Furthermore, with Credit Sesame now both helping consumers raise their scores for free and then rewarding them for doing so, this new feature seems poised to be a hit. Nevertheless, with the effectiveness of the feature being the most important factor, we’ll need to wait and see what kind of impact Sesame Cash and other such offerings can make.
