Zerocard

[Anonymous]

On "The Points Guy" (05-26-19) the following information was released. Maybe this can be our next go hot item (been quiet around here so lets "kick the pig" Navy talk for AJC for awhile)

The company, Zero Financial, said last week that it had secured a round of financing that brought its funding to $35 million and that it would start making the card, called Zerocard, available to more than 200,000 people on its waitlist in the next few weeks.

Perhaps the most attractive feature will be that it offers unlimited cash-back at a rate as high as 3 percent on all purchases, which would make it among the highest flat-rate cash-back cards in the country. To earn that high rate, though, there’s a twist: You start at 1 percent cash back, but as you successfully refer more friends to get the card, the higher your cash-back rate goes. To get the full 3 percent, you have to refer four friends.

The other notable feature is that the Zerocard is linked to a Zero Checking account through a mobile app, which lets you see your account balance and prevents overspending. To earn the full amount of cash back, customers have to pay the full amount on time.

The company says the product allows people to “bank like debit and earn like credit.”

Oh, of interest is: "Still, new players have traditionally had a tough time gaining traction against some of the country’s biggest card issuers. Zero’s CEO, age 36, is a former product developer for the app Words With Friends."

Will add that "Words With Friends 2" is great play it every day but ... the CEO's background seems to not include financial? Hmm ... don't tell me another Blispay?

[Brian_Earl_Spilner]

Kinda curious how this will play out. $30MM doesn't seem like a lot of capital for unlimited 3% cashback, especially since in order to get it, you need more people to sign up, who will also be getting 3%.

[Anonymous]

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@Brian_Earl_Spilner wrote:

Kinda curious how this will play out. $30MM doesn't seem like a lot of capital for unlimited 3% cashback, especially since in order to get it, you need more people to sign up, who will also be getting 3%.

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Presumably not unless each of those people you get to sign up each get 4 people to sign up.

[pinkandgrey]

Interesting. A card that requires friends with good credit lol. It’s a neat idea with the checking account setup. It sounds like a charge card basically. It’s kind of funny—the “pyramid scheme card” lol. As Brian_Earl_Spilner said, it will be interesting to see how it plays out. 

[Revelate]

Oh great, way to take out the 80’s pyramid schemes when it came to Avon or whatever and put it in a credit context.

Figure 20m of that will go towards reserves and say that 10% of CC CL’s have to be accounted for (might be less TBH) that’s what 200m of CL? 1k tradelines for errybody?

I am probably off on the 10% this scheme doesn’t really work unless it’s at 2% on this stake and they have to know that on the business plan side.

[Brian_Earl_Spilner]

I just looked into it more. 3% carbon requires 4 referrals or an annual spend of $100k, the 2% magnesium requires $50k annual spend. But you get metal cards, so there's that. 👍

[CreditInspired]

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@Anonymous wrote:

On "The Points Guy" (05-26-19) the following information was released. Maybe this can be our next go hot item (been quiet around here so lets "kick the pig" Navy talk for AJC for awhile)

The company, Zero Financial, said last week that it had secured a round of financing that brought its funding to $35 million and that it would start making the card, called Zerocard, available to more than 200,000 people on its waitlist in the next few weeks.

Perhaps the most attractive feature will be that it offers unlimited cash-back at a rate as high as 3 percent on all purchases, which would make it among the highest flat-rate cash-back cards in the country. To earn that high rate, though, there’s a twist: You start at 1 percent cash back, but as you successfully refer more friends to get the card, the higher your cash-back rate goes. To get the full 3 percent, you have to refer four friends.

The other notable feature is that the Zerocard is linked to a Zero Checking account through a mobile app, which lets you see your account balance and prevents overspending. To earn the full amount of cash back, customers have to pay the full amount on time.

The company says the product allows people to “bank like debit and earn like credit.”

Oh, of interest is: "Still, new players have traditionally had a tough time gaining traction against some of the country’s biggest card issuers. Zero’s CEO, age 36, is a former product developer for the app Words With Friends."

Will add that "Words With Friends 2" is great play it every day but ... the CEO's background seems to not include financial? Hmm ... don't tell me another Blispay?

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I was thinking the same thing. 

And securing a round  of $35M financing—uhoh—is that really enough?

[CreditInspired]

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@Brian_Earl_Spilner wrote:

I just looked into it more. 3% carbon requires 4 referrals or an annual spend of $100k, the 2% magnesium requires $50k annual spend. But you get metal cards, so there's that. 👍

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And the 1.5% cashback is 1 friend or $25K annual spend. Plus, you have to have their Zero checking so payments can be deducted. 

Now why cant I come up with these money-making schemes 😩

[Brian_Earl_Spilner]

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@CreditInspired wrote:

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@Brian_Earl_Spilner wrote:

I just looked into it more. 3% carbon requires 4 referrals or an annual spend of $100k, the 2% magnesium requires $50k annual spend. But you get metal cards, so there's that. 👍

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And the 1.5% cashback is 1 friend or $25K annual spend. Plus, you have to have their Zero checking so payments can be deducted. 

Now why cant I come up with these money-making schemes 😩

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If you can secure $30MM in funding, you can start your own credit card.

[Anonymous]

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@pinkandgrey wrote:

Interesting. A card that requires friends with good credit lol. It’s a neat idea with the checking account setup. It sounds like a charge card basically. It’s kind of funny—the “pyramid scheme card” lol. As Brian_Earl_Spilner said, it will be interesting to see how it plays out. 

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Lol that’s word for word what went through my head — the pyramid scheme card. 

Thanks but no thanks. I don’t think my friends have good enough credit to do it anyway. 😅