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

SouthJamaica
Super Contributor

TomoCredit rolls out first FICO-free credit card

TomoCredit rolls out first FICO-free credit card

https://www.americanbanker.com/news/challenger-bank-rolls-out-first-fico-free-credit-card

 

Update 3/20

 

Sorry about the paywall folks. Here's another article on the same subject:

https://www.businesswire.com/news/home/20210318005204/en/The-TomoCredit-Mastercard%C2%AE-Gives-Consu...

 

 


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 758 TU 777 EX 749

Message 71 of 85
blindambition
Community Leader
Senior Contributor

Re: TomoCredit rolls out first FICO-free credit card

Looks like article is behind a paywall.
ETA: Second attempt provided article without login.

Message 72 of 85
Dumbee
Established Contributor

Re: TomoCredit rolls out first FICO-free credit card

The most shocking thing from the article to me is that apparently 300K people are "approved" and to receive this card in the next 30 days


Smiley Embarassed
Personal/40.15K Biz/23K POT/17K
Message 73 of 85
CreditMagic7
Super Contributor

Re: TomoCredit rolls out first FICO-free credit card

The very name gives it away to me it must be some knockoff trap.

Not even startups will have much standing against the time tested big shots IMO

Message 74 of 85
FinStar
Moderator

Re: TomoCredit rolls out first FICO-free credit card


@CreditMagic7 wrote:

The very name gives it away to me it must be some knockoff trap.

Not even startups will have much standing against the time tested big shots IMO


How so @CreditMagic7?   

Tomo, although a much newer player in the FinTech arena, has not done so bad since last year.  Petal has been around for a bit.  Upgrade is another one.  The demand for these products in the digital age, given the shift in consumer behaviors, especially with Millennials, Gen Z, etc., has changed a bit of the landscape.

Message 75 of 85
donotpassgo
Valued Member

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

Astroturfing notwithstanding, at least the Tomo CEO's Reddit AMA has sparked considerable interaction.

 

For those inclined, link follows. . .

 

https://www.reddit.com/r/Entrepreneur/comments/ltr28p/update_im_kristy_kim_ceo_of_tomocredit_as_a/?u...

 

Message 76 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!


Agree with going to your bank to get the card.  And with researching cards designed for students.  And definitely stay away from debit cards or anything that sounds too good to be true (Tomo).

I'll throw this out, although you may not want to:  Get your parents to make you an AU of one of their cards.  They don't have to actually give you the card or even the number, but you'll create a FICO score with it and that may help you on your way.  

My 21 year old daughter is an AU of my AX card. Has been since she was 18. The card is frozen, but  her credit report still shows the card and the CL from my account, so her score is in the 770's.

 

Message 77 of 85
Anonymous
Not applicable

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


@Aim_High wrote:

@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.



This is a brilliant post, and should be made available to everyone, not just first timers, looking for credit. Its emphasis on the lack of privacy, compromise of security (login/pw) and twisting of common terms should be a tool for everyone to be more savvy about applying for anything where financial records may be at risk. 

 

Bravo Aim_high!

Message 78 of 85
Larrypatty
Established Member

Re: Tomo Credit Card, no credit check, builds credit

 A big factor must be the age of your checking and savings. Mine is only 18 months old. At the time it was 12 months old with 40k in savings and petal gave me a $1,250 limit. Tomo gave me $2,000 last week with an 18 month old savings/checking with 13k in savings. So in all reality your savings and checking account is a credit check(age of accounts) and then how much you have in there.

 

 Wish I would have read more detail about Tomo. The weekly payments are a joke. Anyone know how long until they let you select monthly payments? Still coudn't help myself from activating the account. lol. wish i hadnt. 

Message 79 of 85
4sallypat
Established Contributor

Re: Tomo Credit Card, no credit check, builds credit

I received the Tomo card but after linking 2 checking accounts and 1 savings account, the system would "disconnect" from my banks and could not autopay.

 

I received automated messages that the card is locked.

 

I called & emailed over and over again but no CSR to help.

I even asked them if I can just send them a check and close my account - no answer except for an automated message....

 

Finally I sent a nasty email to them with the header "Office of the Comptroller of the Currency (OCC) - complaint filing - 24 hours to reply"

 

Same day, I got a higher up management person calling me and looking into the issue.

 

Finally fixed it after 2 weeks of their silly automated system telling me to pay up.

 

Now I am at monthly auto pay and it's pretty smooth.

Message 80 of 85
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