Illustration by Alanah Sarginson
What you need to know:
Average read time: ~5 minutes
This is an important and inspiring day for the Possible team. For the last year, we’ve been working hard, speaking with our customers, and anticipating this big moment where we share this solution with you. It’s finally here. To say I’m excited would be an understatement.
Here’s a little bit about our new product, and how we got here.
Millions of Americans are financially stuck, trying to make ends meet. They’re paying interest and fees, seemingly in an endless debt trap. They want to get out of debt, save money and build credit.
Lenders and credit card companies offer solutions, but they have a different goal. It’s in their best interest to keep customers in the debt cycle, rather than helping them out of it. That’s just how these businesses make money.
The demand for small-dollar credit is undeniable— 32% of Americans can’t afford a $400 emergency2. So, millions use nontraditional forms of credit like payday loans, overdraft fees and subprime credit cards to make ends meet. Then the debt trap gets real: 80% of payday loans are rolled over or renewed within two weeks3 and over half of credit cardholders reported carrying a balance4.
When we founded Possible in 2017, we had a vision for our customer and our company to share the same goal: to benefit their financial well-being, and find a path out of the debt cycle.
We didn’t initially set out to start a payday loan company—or even a credit card company. Instead, we wanted to create a financial health company that can make a real, positive impact for our customers.
But the more we learned about financial health, the more we realized the importance of small-dollar lending. In order to become a financial health company, we had to begin by offering the Possible Loan to help customers solve that $400 emergency.
So we created a loan that builds credit to help people break the debt cycle caused by predatory financial products. Instead of a payday loan, we reported payment history to credit bureaus, providing a path out of the endless cycle of cash advances and overdraft fees.
Today, we’ve lent over $630 million to our customers, without ever charging late or penalty fees. I’m proud to see how far we’ve come.
As the Possible Loan took off, we noticed that a small number of customers were taking out a new loan every few months right after repaying their previous loan—in other words, a debt cycle. Instead of a small-dollar installment loan, what they needed was open-ended credit.
It became clear what the next step was for our team—to make a credit card that will help our customers continue to manage debt and build credit sustainably.
Our team got to work applying the same principles, data and technologies we built for the Possible Loan. The result: the Possible Card, a credit card that is aligned with its customers' long-term interests.
It’s the first credit card designed to help customers spend less, not more, of their hard-earned money.
With full-balance payments on the due date or the option to use installment-based Pay Over Time plans, this card helps customers manage debt, pay it down faster and improve their financial health.
We made the Possible Card different. It’s not a traditional credit card. In fact, it is the first and only unsecured credit card on the market with no late or penalty fees specifically for deep subprime individuals.
Possible Card members simply pay a flat monthly membership fee to get a $400 or $800 credit limit. This way, our own financial incentives are aligned with what’s best for our customers. We do well when when we help customers stay out of debt and stay on track with their payments. This alignment is such an important goal for our team, and it enables us to build the most transparent and predictable credit card experience for our customers.
Just like the Possible Loan, the Possible Card payment due dates align with paydays. If you can’t pay your balance all at once, there’s no need to worry. For no additional cost, we will break your full balance into three or four equal installments to be paid over your next few paydays when you enroll in Pay Over Time.
And we know that hard credit pulls are a non-starter for our customers, so applying doesn’t require a FICO check for approval. Instead, we look at a wide variety of factors like income, bank transactions and cash flow to get a real picture of your financial situation.
We are creating an ecosystem within the Possible experience where our products work together. Our current customers who consistently repay their Possible Loans will have a greater likelihood of being approved for a Possible Card. Now, all Possible Loan customers have a path to graduate into affordable, open-ended credit.
So far, a small group of pilot customers have tried the Possible Card and it’s been incredible to see how we've hit the ground running. Their voices have shaped our go-forward plans, app functionality and underscored the need for safer, affordable credit.
Because Possible Card payments work differently than other credit cards, we were eager to get feedback. Customers loved it. When comparing the Possible Card to other cards, one pilot customer, Kasaia, felt reassured: "It's all set up. I don't have to worry about it... This actually keeps you honest and on track."
In the coming months, we’re making the Possible Card available for more people. I’m so excited about this important step towards achieving our mission to end the debt cycle and help our customers and their communities unlock economic mobility. It’s a huge step forward, and we’re still just getting started. 🟦
Comments or questions? Drop us a line at [email protected]—we’d love to hear from you.
1 “Americans pay $120 billion in credit card interest and fees each year”, Consumer Financial Protection Bureau, https://www.consumerfinance.gov/about-us/blog/americans-pay-120-billion-in-credit-card-interest-and-fees-each-year/
2 “Dealing with Unexpected Expenses”, The Federal Reserve, https://www.federalreserve.gov/publications/2022-economic-well-being-of-us-households-in-2021-dealing-with-unexpected-expenses.htm
3 “2021 Consumer Credit Card Market Report”, Consumer Financial Protection Bureau, https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2021.pdf
4 “Credit Card Late Fees”, Consumer Financial Protection Bureau, https://files.consumerfinance.gov/f/documents/cfpb_credit-card-late-fees_report_2022-03.pdf