NEW YORK—While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some fintechs took a different tack.
In 2020, young companies such as Grow Credit, TomoCredit, and Chime launched or expanded credit cards that are available to those with “less-than-ideal” credit because the companies do not conduct any credit check, MarketWatch reported.
Instead of relying on the traditional FICO credit scoring model, these fintech products seek to evaluate alternative factors such as bank accounts and money management to determine eligibility, MarketWatch explained.
“What’s more, these cards don’t feature annual fees or even APRs,” MarketWatch explained, noting the plastic generates all the revenue from interchange fees.