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Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

Biscuits
New Member

Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

Hello! I recently just turned 18 and am new to the whole credit card world. I don't have a credit score yet which makes it really difficult to get any card. I was told by a friend about a new credit card company called Tomo which doesn't require credit history. Anyone else have experience with them? I appreciate any insights or feedback you can share.  Also if you have any other suggestions I am open to those as well. Thank you!

84 REPLIES 84
MrCreditInternational
Frequent Contributor

Re: Recently stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

I haven't heard about them, but my recommendation is to stay away from all those companies. Go to your bank and they'll help you open a credit card. Major creditors are usually way better than the smaller ones.

 

Btw what's your main bank?

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Message 2 of 85
Anonymous
Not applicable

Re: Recently stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

This card looks like a bad idea to me. It's actually a debit card that works like a credit card with a 21 day grace period. They also require you to link your bank account. 

"To sustain a card that doesn’t require a credit score, deposit, or fee of any kind, your bank balance becomes a primary input for our underwriting. This means at least one bank account should be linked at all times.

Tomo uses a third party service provider called Plaid to integrate various bank accounts across the United States. Plaid handles the encrypting of all data and maintains the highest level of security (learn more here). Tomo does not store any bank account login details and they will not be visible to Tomo employees at any point.

If you have any questions or concerns, please don’t hesitate to contact our Customer Support or call us at +1 (202) 858-1034"

 

You are much better off going ahead and getting a card from a bank or local CU honestly. I would be really leery of a company offering a card that says "debit" on it and saying it's a credit card. I would imagine that they did this to cut down fees but in doing so, they also get out of having to offer the consumer protections of a credit card. 

"Although your Tomo card may say “debit” on it is actually a charge card. This means payments must be made within 21 days of each statement."

 

ETA: this is actually a charge card too, not a traditional credit card. 

"Your expenses are consolidated from the first to last day of the month and payments will automatically be deducted from your bank account to cover the current balance."

 

Pass!

Message 3 of 85
Biscuits
New Member

Re: Recently stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

I use ICCU at the moment. But they only offer a secured card and I really don't want that. I've read secured cards are kind of a dieing breed in the credit card world.  

Message 4 of 85
MrCreditInternational
Frequent Contributor

Re: Recently stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

I'd say start with discover since they love students. Find a friend with a discover card or search for an online referral code to get their $50 offer.

They approved me and many of my friends without credit history and for limits $1000+.

 

 

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Message 5 of 85
Anonymous
Not applicable

Re: Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?


@Biscuits wrote:

Hello! I recently just turned 18 and am new to the whole credit card world. I don't have a credit score yet which makes it really difficult to get any card. I was told by a friend about a new credit card company called Tomo which doesn't require credit history. Anyone else have experience with them? I appreciate any insights or feedback you can share.  Also if you have any other suggestions I am open to those as well. Thank you!


I do not think this particular Tomo will be a good friend.

Message 6 of 85
Aim_High
Senior Contributor

Re: Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?


@Biscuits wrote:

Hello! I recently just turned 18 and am new to the whole credit card world. I don't have a credit score yet which makes it really difficult to get any card. I was told by a friend about a new credit card company called Tomo which doesn't require credit history. Anyone else have experience with them? I appreciate any insights or feedback you can share.  Also if you have any other suggestions I am open to those as well. Thank you!


Welcome to My Fico Forums @Biscuits! Smiley Happy

 

There have always been ways for people like yourself to build credit before Tomo came along. (See my last paragraph for suggestions.)  But let's talk about the Tomo disclosures first.

 

If it sounds too good to be true, it probably is. Smiley Sad  As @Anonymous said, the "debit" card designation works to Tomo's advantage.  This is basically a 1% cashback debit card (although they say it works like a 'charge card' so it just autodebits 1x monthly) unless you are willing to market it to your friends and family to receive the "up to 20%" cash back based on referral bonuses.   You're "working" for Tomo for a couple of dollars in cash back.  Plus, 'debit' cards don't fall under the consumer protections of the 2009 CARD Act. 

 

What most alarms me is the potential for data-mining and privacy violations.  Similar to the Experian BOOST that is being advertised, you are giving a third party permission to access your banking account data.  As a minimum, we know they see the account balances when you apply for credit, as they state that is part of what determines your credit limit.  But you're also allowing them to store your login credentials to your bank account.  That's creepy and unusual. RED FLAG. And apparently, they continue to monitor your banking account (instead of your credit report) since it is their "primary input for underwriting."  Reading the fine print and legalese, while they don't say what exactly they collect or exactly what they do with it, you can be sure they profit from it.  You don't have to give up your privacy for a piddly 1% cash back. Reputable credit issuers don't require you to maintain linked banking accounts as a condition of service.  "To sustain a card that doesn’t require a credit score, deposit, or fee of any kind, your bank balance becomes a primary input for our underwriting. This means at least one bank account should be linked at all times.(https://tomocredit.com/privacypolicy)

 

According to this article from American Banker about the Tomo founder Kristy Kim and how the company started, "TomoCredit asks applicants to let it connect to their bank account using the data aggregator Plaid. The underwriting team analyzes six months’ worth of cash-flow data, which includes looking at the average balance, any overdrafts, and the largest spending categories (school, books, clothing). They look for consistency."   That's a lot of personal data they are accessing to by-pass the credit history requirement of most cards. https://www.americanbanker.com/news/startup-caters-to-millennials-tired-of-paying-in-cash-like-a-gangster

 

Tomo claims they make all their money through interchange fees so they don't charge any fees or interest.  Plus they pay 1% or more cash back.  Something doesn't add up.  If this were a viable business model without making back-end money from marketing your private data, it would have been done a long time ago.

 

As per their privacy policy,  "We only share information ... or to fulfill business obligations."   We may process or share data based on the following legal basis ... We may process your data when it is reasonably necessary to achieve our legitimate business interests."  That's cryptic and can mean a lot of things.  What business interests or obligations have they entered into with their data partners???

 

There are many better and proven options for establishing a credit history using the "old fashioned" way.  Student credit cards.  Opening a checking account and establishing a banking relationship with a lender before applying for a credit line with them.  Retail store or gas station credit cards usually have more lenient underwriting and can help you build credit.    Stores often offer "90-days same-as-cash" or similar payment options which are short-term credit lines that will usually show up on a credit report.  A small car loan can build credit history since the loan is secured with a vehicle that can be repossessed if you default.    I tend to not recommend "Secured" credit cards since they have typically been used as a tool for rebuilding on a bad credit history and their presence on a credit profile might make a lender draw the wrong conclusions, but they can be a short-term option to build new credit.   Similarly, taking out a small and short-term "Savings Secured Loan" (where deposits are frozen as a security until the debt is repaid) can be another way to build credit.



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Message 7 of 85
Jojo567
Valued Member

Re: Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

Your first card should be one with a  established company. I suggest the Capital One Platinum, really all you need is to not have bad credit and a pulse. After six months product change it to the quicksilver. 

Message 8 of 85
SweetCreditObsession
Valued Contributor

Re: Recently stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?

Great job for getting focused on building good credit at such an early age! 😀

I agree with @MrCreditInternational .

 

Avoid Tomo, I've never heard of them so they are like new or possibly a scam. Work with an  organization that has established a good reputation.

 

Your local bank or credit union will have a secured credit card or a secured loan that you can use to build credit. If you don't want to submit to a credit check, you can open a securd card with OpenSky

Best wishes!



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Message 9 of 85
notmyrealname23
Established Contributor

Re: Stumbled upon a new credit card called Tomo. Should I get this as my FIRST card?


@Aim_High wrote:

 

What most alarms me is the potential for data-mining and privacy violations.  Similar to the Experian BOOST that is being advertised, you are giving a third party permission to access your banking account data.  As a minimum, we know they see the account balances when you apply for credit, as they state that is part of what determines your credit limit.  But you're also allowing them to store your login credentials to your bank account.  That's creepy and unusual. RED FLAG. And apparently, they continue to monitor your banking account (instead of your credit report) since it is their "primary input for underwriting."  Reading the fine print and legalese, while they don't say what exactly they collect or exactly what they do with it, you can be sure they profit from it.  You don't have to give up your privacy for a piddly 1% cash back. Reputable credit issuers don't require you to maintain linked banking accounts as a condition of service.  "To sustain a card that doesn’t require a credit score, deposit, or fee of any kind, your bank balance becomes a primary input for our underwriting. This means at least one bank account should be linked at all times.(https://tomocredit.com/privacypolicy)

 


Well, Mint also stores your credentials for financial institutions (aka Intuit). Same with Personal Capital. Same with roboadvisors Betterment and Wealthfront when they're tracking net worth. I believe a lot of these companies are using Plaid. Lot of red flags there.

Also, this isn't an unheard of way to extend credit- I happen to be using a somewhat similar card, Petal. I did have to hook up bank accounts to get approved... bank accounts that Mint and Personal Capital are already tracking for me as a user of those products (my Mint history goes back to 2012 so I guess they have a nice thick file on me). I'm also a Betterment/Wealthfront customer and I've used financial aggregation tools with other financial institutions (Fidelity Full View comes to mind, though I haven't used that service for years as a Fidelity customer).

I wouldn't blame people for not wanting to go this route at all for privacy concerns, but I pretty sure there are millions of people who've already jumped off this bridge. Smiley Happy

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