Varo Bank Debuts Credit-Building Varo Believe Program
Among the numerous trends observed across the FinTech industry in recent years, one of the most impactful has involved credit. From creating lending solutions that rely less on traditional credit scores to introducing new ways for consumers to improve their credit standing, several startups are doing what they can to change the very dynamics of the current system. In that vein, Varo Bank has now brought the Believe program to life, enabling customers to build credit while avoiding both debt and fees.
In order to apply for the Varo Bank Believe program, customers will not only need to have an active Varo Bank account (without any negative balances within the last 90 days) but will also need to have direct deposits totaling at least $1,000 a month. As cardholders make purchases using their Believe credit card, funds from the linked Varo bank account will be moved to a secure Vault Account, ensuring that customers can pay their full statement balance on time and in full. Varo will then report this positive payment history to all three major credit bureaus.
According to Varo’s site, the Believe program card’s credit limit is equal to the user’s Varo Bank balance, up to a maximum limit of $10,000. Most notably, the Believe account has no security deposit, no monthly or annual fees, and even no APR. Additionally, the Believe credit card charges no foreign transaction fees.
Speaking to the importance of credit in general, Varo Bank founder and CEO Colin Walsh stated, “A healthy credit score is so important to many of the foundational aspects of our daily lives – renting an apartment, accessing utilities, buying a car, or even applying for a job in many cases. And access to affordable credit is fundamental to long-term financial health.” Walsh went on to share the inspiration for Believe, adding, “That’s why we knew that Varo’s first credit card needed to lead with innovation and directly target one of the biggest challenges facing millions of American consumers today: responsibly building, repairing, and accessing credit.”
The arrival of Varo Believe comes just months after Varo became the first FinTech to receive a national bank charter. Since officially launching Varo Bank, the FinTech has introduced a number of innovative features, including the Varo Advance program that helps customers avoid overdraft fees. Elsewhere, Varo Bank is also a participating partner for the newly-relaunched Long Game app currently in beta.
True to what their stated vision was when first applying for a bank charter, Varo Bank continues to introduce new products that disrupt the typical financial models. That’s definitely the case with the Varo Believe Program — a FinTech solution that might not have been possible if Varo wasn’t now its own bank. With Varo Bank still in its infancy, expect plenty more innovation and experimentation from the FinTech turned institution.