In a macroenvironment when data is increasingly expensive, more Americans are in need of affordable, accessible ways to safely build their credit histories, according to an update from Fintech firm Current.
It’s why Current have partnered with Cross River to offer “an innovative secured charge card, which is already delivering tremendous benefits to our members.”
Cross River and fintech platform Current have joined forces “to address a pressing challenge in the U.S. financial system: the plight of the 26 million underbanked and credit invisible population.”
This partnership aims to enable “a path toward financial inclusion through an innovative credit-building product.”
Current is a U.S. fintech platform offering technology-driven, mobile-only financial solutions with a mission to “improve financial outcomes for its members.”
And now, in collaboration with Cross River, Current is expanding access “to credit building for communities that have been traditionally unserved or underserved with an innovative secured charge card that allows its members to safely build their credit histories as they spend through a single spending balance to view and manage across credit and debit on the Current platform.”
The opportunity: tackling credit invisibility and high costs of credit card debt
In the face of an evolving economy, “the challenge of expensive and elusive credit access has intensified.”
The Consumer Financial Protection Bureau (CFPB) in a 2020 report highlighted a worrying scenario: over 26 million Americans are “credit invisible,” with an additional 19 million deemed “unscorable.”
The report suggested that credit builder loans “could be pivotal in helping such individuals establish a credit record or improve their credit scores, especially for those without any current outstanding debt.”
In 2023, credit card delinquencies surged, “especially for subprime lenders. The rate of serious delinquencies on credit cards by the third quarter of 2023 was 2.45% overall, but for subprime credit card customers, it was 20.79%.”
In addition, credit card delinquencies “were four times higher for subprime customers.”
A product which may help consumers is “a secured credit card that provides everyday Americans with a safe way to build credit while minimizing these risks of debt.”
The solution: a secured charge card
Current leveraged its proprietary banking technology and Cross River’s core technology to solve the complexity of multiple accounts on the backend and “launched an innovative secured charge card called the ‘Build Card’, not yet seen in the market.”
Features of the Build Card:
- Issued by Cross River Bank, Member FDIC on the Visa network: This card offers a reliable and widely accepted financial tool.
- Connected to members’ existing spending balance: Current’s five million members have a single balance to view and manage across credit and debit on its platform. Members can build their credit histories as they spend, while minimizing the risk of debt.
- Secured funds that can be used to pay a member’s bill each month, with Current subsequently reporting their on-time payments to TransUnion.