Gone are the days when you needed to have a credit history before being issued a credit card. Doesn’t matter if you are a recently graduated student, an immigrant, or anybody with an income but little or no credit history. The San Francisco-based start-up Tomo Credit brings you its revolutionary credit card called the Tomo Credit Card.
The credit card will give you a shot at establishing a credit history without carrying a monthly balance. The evaluation process includes deciding factors like your income or income potential and bank account balance. Then, the credit card issuing bank (Community Federal Savings Bank, New York-based) determines whether you are a suitable candidate for the card.
Tomo Credit Card Review
1. No interest charges or credit Check Involved
the issuing bank does not charge you with interest on your transactions or perform a check on your credit history. However, you have to link your bank account so that it can pay any charges weekly. TomoCredit makes money from “interchange fees” rather than charging interest.
2. No balance on the card
the card holds no balance to carry over to the next month. Because there is no balance on the card, there are no chances to rack up debt. The repayment schedule is set to 7 days by default initially. This feature helps you establish credit by keeping your credit utilisation low due to frequent payments. Major credit bureaus like Experian, TransUnion and Equifax receive these payment reports and determine your credit score.
3. Generous credit limit
A credit limit of up to $10000 is allocated depending on the deciding factors weighed in the underwriting of TomoCredit. You may even see this limit increase after your first payment.
4. Cash-back and rewards
The cardholders are given a 1% cashback. Although average, it is a decent reward rate for cards similar to the Tomo credit card. In addition, if you refer a friend to the card and they are approved, you will get an additional 1% for the next three months. However, there is a limit of 20 referrals that you can make, each of which will make you an additional 1% for the next three months. At an earning rate of 1%, a Tomo cardholder can earn more than $300 for every approved referral.
5. Redeeming rewards
the rewards you earn can be redeemed after 28 days of payment of your previous month’s statement.
6. Social security numbers might not be required to qualify
This feature is still rare among credit cards. If you are new to the US (non-US citizen) and don’t have a social security number or are an immigrant, it is still possible to apply with just your passport information.
Few things to know about the Tomo Card being a MasterCard
Being a master card, the Tomo Card comes with a few more benefits:
- You have zero liability protection if an unauthorised purchase is made with your card.
- You can get emergency assistance in your preferred language, courtesy of MasterCard’s global service.
- If suspicious activity is detected, you will receive alerts once you have activated your card and registered your card number, courtesy of Mastercard ID Theft Protection.
Competitors of the Tomo Credit Card
Petal® 2 “Cash Back, No Fees” Visa® Credit Card- This can be the best alternative to the Tomo Card. Unlike the Tomo Credit Card, this runs on VISA. Just like the Tomo Credit card, there is no annual fee. Rewards you with 1% cash back on each eligible purchase initially. The rate goes up to 1.5% after making 12 on-time monthly payments. Also, the Petal® 2 “Cash Back, No Fees” Visa® Credit Card rewards you with 2%-10% cashback on making purchases from selected merchants.
Although the card allows you to carry your balance to the next month, you will incur interest. The metrics of qualification are similar to that of Tomo Card.
OpenSky® Secured Visa® Credit Card– The card is similar to the Tomo Credit Card in most notable aspects. However, two prime drawbacks make the difference. First, you have to make a security deposit which can range from $200 to $3000. Your security deposit becomes your credit limit. Also, there is an annual fee of $35 to be paid.
Frequently Asked Question
Why not use a debit card instead of a credit card with weekly payments and no carry-over balance?
The simple answer to this is- reward.
Unfortunately, a debit card does not give you 1% cashback on all purchases, nor does it help build your credit score from scratch.
Where can the Tomo Card be used?
You can use the Tomo Card online and anywhere among over 200 million merchants in 200 countries where MasterCard is accepted.
Can non-US citizens apply for the Tomo Card?
Absolutely! All you need is an ITIN or SSN and an ID issued by your government.
How long does it take to receive my card?
Provided you are approved, the card should reach you within 7-10 days. If not, contact customer support.
When are the statements issued?
You will receive your last month’s statement on the 7th of every month.
How does Autopay work and can its schedule be changed?
Weekly autopay is the default mechanism and is the same for everyone. It gets triggered every Monday.
Do you need the Tomo Card?
It depends on how you like to spend your money. The Tomo Credit card is tailor-made for a specific segment of people, like students, immigrants and cohorts. If you do not have a credit history to show or lack sufficient credit history, then look no further because this card is perfect for you.
However, you must have a steady income and/or solid financial assets to qualify for the card. In addition, you must be able to pay their bill in full at the end of every week.
If you have a well-established credit history in the US, then you would probably like to try out other credit cards that give better returns.