EDC’s Kim Gerhardt met with Marla Blow, CEO of FS Card. FS Card Inc. is a Washington, D.C.– based next-generation credit card platform that embraces technology to supply more affordable products to small-dollar loan customers. Its mission is to enable working people to meet their everyday liquidity needs in a flexible and convenient way. The FS Card team features industry-leading credit, capital markets and regulatory expertise, and has deployed a unique underwriting platform that transforms small-dollar lending. FS Card is committed to working with its sponsor bank to offer simple, fair and transparent mainstream credit products.
Consumer credit cards in the United States are mature with very established issuers. What prompted you and Fenway Summer to launch a new credit card product, the Build Card? Who are your customers and what are you trying to achieve?
There are surprisingly large numbers of people who don’t have access to credit cards, often driven by lack of credit history or challenging credit experiences in the past. These working people have limited access to affordable credit and often turn to high-cost alternative financial products to make ends meet. At FS Card, we’re reimagining the small-dollar lending landscape and offering deserving people a lower cost alternative to meet day to day liquidity needs.
What is the Build Card and how is it different from other credit card programs in the United States? What is FS Card doing differently compared to more established issuers?
The Build Card is a $500 unsecured credit card, meaning customers don’t have to put down a security deposit to get access. This is important for this population because few of these consumers could actually cover the $200-$300 deposit most secured cards require.
What we’re doing differently is looking for an inflection point. Our aim is to look beyond the past history. And for us, serving these customers is about looking for a change in trend. We are looking for recent indications of a positive credit trajectory going forward through our use of the latest analytical techniques and broadening the data sources at work in the credit decision.
Is the Build Card making a difference for your customers? Are there indications that your customers have been able to improve their financial health with the Build Card?
Absolutely. The Build Card provides our customers with a buffer to pay for necessities when their income is unexpectedly low or when expenses rise without warning. It is a tool to improve their credit history as we report to the major credit bureaus, and we enable customers pay for every day needs. For example: groceries, gas, and clothes are among the most common transactions we see. So far, we’ve extended a total of $50 million in credit to over 100,000 individuals across 46 states.
What are further aspirations with the Build Card? Are there other ways that Fenway Summer and/or FS Card will be looking to address the financial service needs of traditionally underserved consumers?
We’re growing and looking to serve even larger parts of the population! We’ve extended credit to over 100,000 borrowers, but there are millions of Americans with subprime credit and our new funding positions us to build on the foundation and platform we assembled over the past few years.
Apart from trying to improve the financial well being of underserved consumers, what do you like to do in your spare time (do you have spare time?!?)?
Please define the term “spare time”….I’m not familiar. Ok. Two of my favorite things are my 6 year old son and freshly popped salted popcorn – does that count?