Reported by Isabel Contreras and Jeff Kauflin
Pandemic uncertainty, followed by stimulus cash boosts and now, skyrocketing inflation, have made young folks more conscious of their finances–and financial standing–than ever before. So it’s fitting that half of the eight personal finance startups honored on this year’s Fintech 50 list (and two of the four personal finance newcomers on the list) aim to help Americans who are living paycheck to paycheck or have thin (or even poor) credit histories, to get their financial footing.
Newcomer Grow Credit issues users a virtual credit card (no plastic version), which can be used to pay monthly recurring subscriptions and then gets paid automatically from their linked bank account. Those regular on-time payments get reported to the credit bureaus, which in time helps a user build their credit score–crucial to getting a regular credit card and good rates on car and home loans. Grow charges a monthly fee as does another newcomer, Brigit, whose credit builder loan is linked to a savings account, which assures timely payments will be made and reported to the credit bureaus. Another Brigit feature aims to help users avoid both overdraft fees and expensive payday loans by linking to their bank accounts, monitoring cash flow, and making a small, interest-free cash advance, when needed.
Two returning list honorees also focus on helping folks join the financial and credit mainstream. Esusu reports rental payments to credit bureaus, so individual renters can build their credit standing with on-time monthly payments–just the way homeowners do. Propel’s mobile app helps users keep track of their food stamp balances and other government benefits, and it offers a free debit Mastercard for users to manage their benefits and earnings from work in one place.
Of course many Americans are doing well financially and are ramping up their spending on travel and other out-of-home experiences foregone earlier in the pandemic. That’s where another Fintech 50 newcomer, travel booking app Hopper, comes in. Besides commissions, it is bringing in revenue with a novel program that lets customers pay an extra fee—usually 10% to 20% of a ticket’s price—to freeze a flight’s price for up to a week. If the fare rises and the customer buys the ticket, Hopper eats the difference–particularly appealing in these days of full flights and soaring airfares.
The two most valuable companies in the Fintech 50 personal finance category are Chime, America’s largest digital bank, valued at $25 billion, and Upgrade, a newcomer to the list, valued at $6.3 billion. It offers several novel products, including credit cards that …….