We have a lot of recently graduated university students come to Fluid wishing our product was available while they were in school to help them build credit. For those that are still in college, don’t wait any longer. Go to Apple iTunes App store and download Fluid App. Start building your credit today buy borrowing a small amount of money and pay back on a monthly basis at no cost to our students.
Bad Financial Products Hurting Students
There are some ugly and unsavory products out there that prays on the fact that college kids have no real option to build their credit while in school. These products such as sub prime credit cards or secured credit cards asks for a deposit upfront as a requirement to build credit. Most of us don’t have the up front cash to get it started. Some of of these so called rebuilding credit products such as Capital One’s Secured Card is a shining examples of a bad product gone wrong.
Secured Card Fees
Starting with fees. Capital One’s secured credit card requires you to put down $50 to $200 dollars just to get a credit card. What do you get in exchange? Just $200 of credit line. You can slowly work yourself up to $1,000 but there are other stipulations such as that you can’t have more than 2 credit cards with capital one. There are a list of criteria that are unfriendly to college students. Such as you have to $425 dollars of discretionary income after rent and mortgage. Most of our college students doesn’t have a steady income year round and sometimes their room and board is supplemented by parents or school. Left overs from part time jobs or other part time income won’t satisfy Capital One’s secured card requirements.
Secured Card High Interest Rate
Whether it is cash advance or purchase, Capital One’s secured card charges students 24.99% APR. This annual percentage rate is an compounding interest rate, meaning that there is interest on interest. If you ever leave a balance on the secured card and only paid the minimum, it will take many years to pay off the high interest rate and you might end up hurting yourself financially in the long run.
The other aspects of this 24.99% APR is that it is not a fixed annualized percentage rate. Looking closely into the fine print, this rate various depending on an bank borrowing rate or Prime Rate. If Prime Rate goes up and you have a balance left on this secured card, your rate could go up without notice and your ability to pay off the entire balance is hampered again.
Secured Cards Are Not For Students
Capital One’s secured card is really for someone that’s playing catchup after graduation, worse, got bad credit because of lack of financial education. We talked to a few college graduates that are already in the work force. For various reasons, they didn’t build credit while in college and got a rude awakening when they found out that they had no credit or credit score. There only option was to use high fee and high interest secured card and it took them on average over 2 years to build up their credit. Without a good credit score, they end up with expensive forms of financing when it comes to student loans, car loans and unable to purchase a home because of it.
Our friends wished someone should have educated them about credit while in college and that they wished that there was a good product available to students to build credit while in school. Instead of waiting for years after college to get a decent credit score, they could have done it and saves all that time by building credit in school.
At Fluid, we believe that there should be a better product for students to educate themselves with credit and a product that actually helps students to build credit. Fluid is an app which you can use to borrow a small amount of money. Each month, you pay it back and that activity is then reported to credit bureaus. Your payment history is one of the most important elements of a good credit score. On time payments, borrow what you need and keep your spending in check are the three hallmarks of keeping a healthy financial life and are the foundations of a great credit score.
A great credit score will allow you to purchase an apartment or a home, lease the car of your dreams and refinance or consolidate your students loans into a low single payment. Why not start today by downloading Fluid App from Apple iTunes App store and give it a try. It’s free to use.
Founder and CEO
Timothy Li is a serial FinTech entrepreneur. He is the Founder & CEO of Fluid Credit, a credit building app exclusively for 22 million university students. Tim has held various C-level & advisory positions at RocketLoans (Quicken Loans), RealtyMogul, Kabbage, LoanDepot, Mosaic, Blinker, Think Finance, Experian and JPMorgan Chase. He’s is a senior contributor at CrowdFundInsider.com and speaks at various FinTech conferences.