Half the American population - that’s 85 million people - have credit histories that are either poor or simply sparse, so finding a financial institution willing to lend them money can be a tricky business. And when they do, it costs more – making it harder for people who want to borrow responsibly to get back on their feet.
It’s a reality that often means putting hopes and dreams on hold . But it’s also the kind of reality where Barclaycard can be a force for good.
Seeing both business opportunity and a chance to make a big difference for millions of under-served consumers, Barclaycard US decided to give them a real option – an attractive product that also directly tackles their reality.
So business lead Jared Young and the team set to work on designing a clear, fair product, picking lots of potential customer brains along the way. The result? Path to Prime.
Earning your prime stripes
Path to Prime lets people with poor credit scores - for the first time - earn their way back to a prime credit status.
“It’s a product that’s built on a promise,” said Jared. “Customers get a promise from us that if they make their payments on time, the product will graduate with them as their credit profile improves. Path to Prime will help them re-establish themselves as good credit customers. Then, they’ll get the product they deserve.”
After two years of timely payments, customers will take their credit APR from 24% down to 14%. In other words, they’ll end up on a lower rate than the average prime APR of 15% - 16%. Barclaycard’s promise really is a Path to Prime.
For 15 million of those 85 million consumers, often young people, there just isn’t enough information for them to prove to lenders that they can handle credit – usually because they’ve never had credit before. But you’ve got to start somewhere, and when it comes to credit, Path to Prime could be the answer.
“We think this product will resonate particularly well with the Millennials,” said Jared. “They’re consumers who understand that they’ll have to start with a high APR, and appreciate the fact that as they make their payments, we’ll reduce it automatically.”
Jared is delighted to lead the development of a product that not only helps customers on their personal Path to Prime, but also has huge potential for Barclaycard.
Taking social responsibility
“It’s important to make a positive difference for consumers,” said Jared. “We’re here because of them, so we need to build products that enable them.
“The great thing about Path to Prime is that it fits right in with what Barclaycard is trying to accomplish. It fulfils the values that we’re seeking to live and has the potential to create a lot of value for our shareholders, while also being a very strong, citizenship-focused product.
“It’s important to push our thinking into these areas, because ultimately there’s huge benefits for consumers and our business. But unless we think in a socially responsible way, we’ll never be able to find them.”