By Oliver Smith on Thursday 13 January 2022
The bank is aiming at helping near-prime customers build credit.
Enter Chetwood Financial, which today is launching its own challenger credit card called Wave, aimed at helping near-prime consumers underserved by the traditional credit card giants.
Wave includes everything you’d expect from a credit card in 2022, including an app with biometric login, Apple and Google Pay support, card freezing, repayment alerts and the ability to tweak payments from your smartphone and more.
Chetwood’s founder and CEO Andy Mielczarek told AltFi that the ‘USP’ is that Wave brings these features to consumers with low credit scores.
Mielczarek called Wave a “way of getting people into credit and good credit habits.”
To do that, the app also has several more unique features, including a Repayment Calculator to help customers understand how repayments affect the interest on their account, and a 3-day grace period for late payments.
“In our research we could see that prime customers were getting a much better experience with their credit cards,” Chetwood’s commercial director Julia McColl told AltFi, pointing both to the cashback and rewards you might get with AmEx or Barclaycard, and also the digital apps and customer service.
“It felt like there was a lot of opportunity, because what our customers are getting today is so significantly below what the rest of the market seemed to be able to access.”
Obviously, one of the biggest trends in credit these last few years has been the meteoric rise of buy now, pay later, which Mielczarek describes as both a competitor and an opportunity.
“The buy now, pay later journey is what we’re competing against,” said Mielczarek, pointing to the ease at which providers like Klarna are integrated at online checkouts.
“The danger is in terms of managing your finances, especially if you've got several [buy now, pay later products] going on at once. Wave is the place you come to after you've had a few buy now, pay laters and you want to get control of your finances.”
More broadly the CEO says that he’s “bullish” on demand for credit and the direction of the macro economy, which lines up with the latest Bank of England figures which have shown a sharp increase in credit card usage as consumers grow more confident in the economy and increase their borrowing.
“A revolving credit product that you can dip in and out of to get through the bumps that might be coming in the next year, I think it's a good time for that.”
Wave sits alongside Chetwood Financial’s three other products, a fixed-term savings account called SmartSave, an online consumer loan called BetterBorrow and a dynamic consumer loan that adjusts its rate based on the borrower’s credit score called LiveLend Reward Loan.
Chetwood secured its full banking licence from the Bank of England in 2018 and has focused on creating financial products that cater to those consumers underserved by the mainstream.