How Firstcard is Helping Students Build Credit Through Better Banking Products

Learn how Firstcard built an innovative banking product to help students get better access to credit

When Kenji Niwa, Firstcard’s founder and CEO, first came to the United States on a student visa, he quickly ran into an issue many international students find when they arrive in America — he didn’t have a credit score. This made it nearly impossible for him to open a US-based credit card. But the impacts go far beyond that.

It can also make it more difficult to secure a lease on an apartment, open up a utility account without having to make initial deposits, or get an auto loan.

He wasn’t alone in this problem. Others who now work at Firstcard, as well as millions of international students around the country, struggle to build credit when they arrive in the United States. 

This problem isn’t unique to just international students either. Many college students, regardless of where they grow up, struggle to build credit. More than 50% of US college students don’t have a credit card due to the fear of overspending or rejected applications because of financial mistakes they made in high school. If, for instance, a high school student forgets to pay a cell phone bill, they may quickly ruin their credit score and find themselves in a hole they’re unable to dig out of. 

Kenji recognized that without the right tools and proper education students of all backgrounds would struggle to safely build credit, creating long-term implications for their financial lives. 

Firstcard’s Student Credit Builder Product

To provide a solution to this problem, Firstcard recently launched their student credit builder product, while also announcing their seed funding round. With Firstcard, students can open a bank account with a credit builder card tied to it. 

This unique type of card allows students to establish and build their credit, while simultaneously eliminating the risk of overspending. This is accomplished by giving card-holders the ability to only spend the funds they have in their linked account. Due to the lower credit risk, Firstcard is able to approve students who otherwise may not be able to access credit products.

“We solve two problems at the same time,” says Kenji, noting their nearly universal acceptance rates as well as the fact students can earn interest on the money they keep in their accounts. “We help them build credit, as well as save money,” he says. 

Finding the Right Partner in Synctera

When Firstcard set out to build their credit builder product, they began researching the different options they had to build this unique product. They quickly discovered that since this product is more complex than a standard debit card, many Banking as a Service platforms and sponsor banks didn’t support it. 

Luckily, Synctera had just the solution they were looking for.

Synctera’s Smart Card product checked all of the boxes that Firstcard was looking for. It provides all of the credit building functionality their student customers need, while allowing Firstcard to earn credit interchange, which is significantly higher than debit.

“Synctera was able to support our product vision where most other platforms could not,” says Kenji. “For many platforms, this is a relatively new product, and we appreciated how Synctera could understand our needs and provide us with the best possible solution.”

Outside of the technology and compliance expertise Synctera was able to provide, Firstcard also knew that forming a strong relationship with their sponsor bank was going to be key to long-term success. Given the unique features and functionality of their credit builder product, they needed to ensure that the bank they were ultimately matched with was aligned to their overall vision. 

“Through Synctera, we’ve been able to form a strong relationship with our sponsor bank. Their flexible and innovative approach has allowed us to build the unique features we need, while feeling confident that we are in sync every step of the way. Both Synctera and our sponsor bank feel like true partners for our business,” says Kenji Niwa. 

A Successful Long-Term Relationship

Following its successful initial launch, Firstcard has big plans for its future.

As the school year starts, Firstcard anticipates a large upswing in onboarding and bringing new students onto the platform. Part of their marketing plan also includes providing financial education for students, with content geared towards enhancing their financial literacy.

Firstcard also recently launched Firstcard Plus — a subscription plan that offers a higher APY on deposits, credit monitoring, and 1% cashback on all purchases. 

Synctera is proud to be Firstcard’s partner in this important endeavor and is excited to support their mission of empowering students with better student banking. 

If you would like to know more about how Synctera can help you build the next great embedded banking or FinTech product, contact our team today!

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