Financial Feminist - 18. What Credit Card Companies Don't Want You to Know with Credit Expert Vrinda Gupta

Episode Date: May 17, 2022

The Credit Card Industry is built on sexism (surprise, surprise, another industry that benefits the patriarchy) –– and not understanding how credit cards, credit scores, and things like reward points benefit men more than women is how it continues to go unchecked. Today’s guest is lifting the veil and taking us on a deep dive into the credit card industry –– how it works, why you might not be getting approved for that credit card even though you have a great salary, and how women are losing out when it comes to rewards. Vrinda Gupta is a former Visa Credit expert, who was denied for a card she helped create and is now on a mission to make sure women can build credit and have access to all the perks of credit cards with her company Sequin.  Pre-Order “Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love”: https://bit.ly/3PpHvlC Our HYSA recommendation [affiliate]: http://sofi.com/herfirst100k Episode show notes: https://herfirst100k.com/financial-feminist-show-notes/  The Badass Budget Spreadsheet: https://herfirst100k.com/shop/badass-budget-spreadsheet Our Credit Card Recommendations: https://herfirst100k.com/recommended-credit-cards Follow us on YouTube for behind the scenes and extras: https://www.youtube.com/c/HerFirst100K/featured Skip the line for the Sequin Rewards Card: http://tiny.cc/hfk   Follow Vrinda on Instagram: https://www.instagram.com/vrinda.gupta/   Follow Sequin on Instagram: www.instagram.com/sequin_card    Follow Financial Feminist on Instagram: https://www.instagram.com/financialfeministpodcast/    Follow Her First $100K on Instagram: https://www.instagram.com/herfirst100k/   Looking for more actionable money advice? Take our FREE money personality quiz! https://treasury.app/herfirst100k/money-journey-quiz    Leave Financial Feminist a voicemail: https://www.speakpipe.com/financialfeminist Learn more about your ad choices. Visit podcastchoices.com/adchoices

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slash legal slash ca dash pru dash disclaimer. Hello, financial feminists. Welcome back. Happy to see you. We're talking all things credit cards today with a former Visa credit expert and a fellow female founder and CEO. Now, if credit cards feel a little scary to you and you heard me intro this episode and you're already like, nope, I'm out. You're not alone. I invite you to stay. If you have come from a Dave Ramsey background, if you have come from a background that has said that debt is bad, that credit cards are bad, here's the deal. You are an adult and I'm going to treat you like an adult. Credit cards are not the devil. Credit cards are not evil. In fact, they're a really great tool if you use them responsibly. And whether we like it or not, credit scores specifically, but also credit cards are a necessary part of our life, a necessary

part of our finances, and we need to learn how to use them responsibly as well as any pitfalls that we're currently falling into. So we talked all about credit scores last season, how to increase your score, what makes up a credit score. So if you haven't listened to that episode, it's episode seven. Please go back, listen to that one first. It'll give you a really good baseline in order to listen and fully absorb today's episode. Okay, I've talked about it before and I mentioned it again in the episode today, that I actually don't even own a debit card. I never have. My parents don't own debit cards. I pay all of my bills and I spend exclusively on a credit card. Here's what that does for me. One, it's secure. Credit card companies

have some of the best fraudulent protection available, and it's easy to report if I believe a purchase has been double charged or if I think my credit card got stolen. I also reap the benefits of all of these cards. So whether that's reward points, free miles, cash back, I get all of those points possible because I'm putting everything, every purchase I have on a credit card. I also love using the travel specific credit cards for perks like lounge access at airports, free upgrades on flights, sometimes even free flights. The third thing is that using a credit card helps me build my credit score, which yes, unfortunately, you actually do need one of those in order to function in society. We have all of our credit card recommendations linked in our show notes. And we'll talk again about how to use your credit card responsibly as we go throughout this

episode. The education most of us get on credit is lacking. You've probably heard some myths like you have to keep a balance to have a good score, which is not true. And today's guest is here to demystify the credit industry and to help you make smarter choices with your money. And today's guest is here to demystify the credit industry and to help you make smarter choices with your money. Now, I want to state something very clearly. I've already said it a couple of times in this intro, but we are talking about credit cards as a tool. And like every tool in your toolbox, you have to use it smart.

You have to use it correctly in order for it to work well and to keep yourself from getting hurt. I kind of think of it like a knife, right? A knife can cut you. It can also make you a yummy veggie stir fry. And credit cards, we want to, I don't know, make us a yummy veggie stir fry. The metaphor doesn't fully track, guys. It's just stay with me. Okay. Before you begin using credit cards or if you're currently paying down credit card debt, I need you to do a few things first. One, you need to have an emergency fund of at least three months in a high-yield savings account. The last thing I want for you credit card debt, I need you to do a few things first. One, you need to have an emergency fund of at least three months in a high-yield savings account. The last thing I want for you to do is to

dive into debt when you lose your job or your water heater goes out or you get a flat tire, right? The second thing is you need to have a budget. It can be a spreadsheet, shameless plug, we have a great one called the Badass Budget that is pre-automated for you to plug and play, link in our show notes, or even an app on your phone. But you need to know how much is coming and going each month so you can know exactly how much you can spend on your credit card without going into debt. We have more about emergency funds, more about setting up budgets, more about financial goals on episode five called The Financial Game Plan. Again, we have all these

resources for you. Please go back and listen to that one. As a special bonus for financial feminist listeners, get 10% off the Badass Budget Spreadsheet with the code FFBUDGET. That's FFBUDGET. You can learn more about this and other personal finance tools and courses at herfirst100k.com slash products. Again, linked in the show notes. You should only be using credit cards if you can pay off the entire balance every single month. You need to be making on time and in full payments, meaning that you're not allowing the date to go by without submitting a credit card payment. And you're also not just paying the minimum balance, you're paying the full balance. Okay, back to the episode. Vrinda Gupta is the CEO of

Sequin, a debit card and credit builder with rewards that pay back the pink tax in categories where women spend. She's a globally recognized credit expert with experience building credit cards at Visa and has an MBA from UC Berkeley School of Business. Vrinda lives in San Francisco, California and is a proud first-generation Indian immigrant. Today's episode is incredibly informative. You're going to learn the ins and outs of the credit card industry and how women like Vrinda are turning this traditional patriarchal stronghold into a system that benefits women. Enjoy. I would love for you to tell me kind of your story about being especially one of the people who built the Chase Sapphire Rewards card and then you got rejected for it. So even before then, what was your journey and your career to getting to that point?

Yeah. So as quick background, I started my career at Visa. And, you know, even before that, my family and I are first generation immigrants. And I grew up watching my mom, who is my superhero, and I don't feel like she's afraid of anything. But the one piece was always a financial system. don't feel like she's afraid of anything. But the one piece was always a financial system. And so growing up, I would watch her rely on my dad in just this one area. And so to me, it became very important to understand the financial system and especially credit in the US. And my mom's view was always, there are a lot of gotchas, you can get into debt, you can make one mistake and that can carry on throughout your life, and she's not wrong. And so when I decided to think

about what I wanted to do after I graduated, going into financial services was a lot more than just a job. It was a way to empower myself in the system and a way to, you know, really help my mom as well. And so started off at Visa, worked on the credit cards team for a few years and built a very popular product called the Chase Sapphire Reserve. I am a member. Yeah. Yes. Yeah. So that is the card that I was the main PM for on the Visa side. And it was a really exciting project to work on something like that where it blew up immediately. And I think for the first time, we really saw young people being catered to and things being thought of differently. And of course, I, like everyone else, wanted that product. And I wanted to start off building my credit.

I wanted to get a product that could give me travel rewards, et cetera. And it really was this kind of symbol of financial independence for me. And I applied for the card and I got rejected when I was at work in an open floor plan. You applied for the card that you built and then were rejected. Did they give you a reason behind that rejection? I mean, that's the worst part of it, right? When you get rejected, all you see, it's this instant rejection. Right, it's a yes or a no. Two weeks later in the mail, you get this kind of generic, you know, letter that says, well, it could be one of these four reasons. And later on, I learned it was because my debt to income ratio, which now I understand what that means. But at that point,

I had no idea, right? I was a new grad. I was just getting on my feet. And I think the piece that I felt the worst about was that credit felt like a very important test and no one had taught me how to study for it. And so when I applied and I got rejected, I said, had I known, I would have been building my credit and I just didn't. And ultimately what I realized was that I had been spending primarily on a debit card and I'd been spending on my dad's credit card, which I thought was building my credit, but it really was building his credit more effectively than mine. And so even though I had a high income, the credit decisioners don't really take that into account. And so I applied, I lacked credit history and I got rejected. And so that was kind of the beginning of me starting

to think about credit in the industry for the first time. And just realizing that if this was something that was impacting me as someone who was actually building these products and writing the rules for these products, you know, what was happening to so many other people? And that led me down a long rabbit hole of realizing that the system truly was not designed to center women, but really anyone outside of this prototypical heteronormative. Cisgender white male. Exactly. Yeah. So you said the words debt to income ratio. Can you explain for my listeners what that means? Absolutely. Yeah. So your debt to income ratio

is basically how much a creditor is willing to give you in relation to your income. And so essentially at that point, in addition to my income, I hadn't built up credit. And so the amount of debt that an issuer was willing to give me was not proportionate to the amount that they were willing to. Because they're basically, they're like kind of placing, not a bet, but they're saying like, hey, we're trying to figure out how responsible you are, right? And the likelihood that you will pay something back. So they're coming up with kind of this arbitrary number. And you can tell me if it's not so arbitrary, but like seemingly arbitrary number of like how much they're willing to bet on you or how much they're like the flexibility they're willing to give you. And so it sounds like for you, it was less about like your income or how

much salary you were making and more of the fact that you had not built credit up to that point. Absolutely. Yeah. Yeah, that's right. And I mean, ultimately it does come out to this number, which is your credit score, right? But there's so much more to it than meets the eye. So I'm excited to talk about all of that, but it really is this black box that, you know, credit affects every aspect of your life and every single goal that we have as people, as women, as whoever, is usually tied to a financial goal that is usually tied to credit. And so what I always like to say is your credit score is the only grade that matters after you graduate because- I say it's your adulting GPA.

Exactly. I love that. Yeah. Because I mean, you need credit for literally everything, and even things you don't think about. Like sometimes if you go to apply for a job, your employer actually might pull your credit. Which is some bullshit, in my opinion. Exactly. I mean, that's a whole other concept. I don't know. Maybe that's a conversation we'll get into today.

We should. I mean, yeah. So credit is, you know, central to everything. Getting an apartment to rent, trying to buy a house, buying a car, opening a credit card. Absolutely, yeah. Absolutely. Yeah. I mean, anytime you need a loan, anytime you need to borrow something, your credit score, credit history is going to come into that. And so, you know, making sure that that, that you're good gives you the options in life to be able to, to pursue whatever huge goals that you have for yourself. Yeah. Well, and in previous interviews you've mentioned, and of course it's obvious once you do a second of digging, that the credit card industry caters to men, specifically cisgendered straight white men, right?

And that there's so much implicit bias kind of baked into this industry. I just want to talk more about that. So when you were creating cards for Visa, what things were you considering to like entice high earners into, you know, applying for these cards? And then was it kind of just left unsaid that these like millennials that you were trying to entice were just men, right? They were just straight white men. So the way that we were thinking about building out the Chase Sapphire Reserve was a product that was similar to the success of the Amex Platinum,

but with a little bit more around a young urban millennial lifestyle. A little more accessible, probably. Exactly. Yeah. And slightly more accessible. And so the idea was that we could actually create this kind of black card, centurion card experience for a younger population. And that actually would have, you know, the lounge access that we all like, right? You know, it would have, one thing that's really interesting about the Chase Sapphire Reserve is that the value actually doesn't necessarily come from the cashback rewards. It comes a lot from the different – The perks or the benefits.

The perks and the benefits, exactly. And so really creating this card that felt aspirational and really elevated you as this young professional traveler was the idea behind it. And actually, a fun fact is even everything was meant to feel very aspirational and premium. So even the weight of the card. Yeah, that was the first weighted card I'd ever gotten. So for those of you who don't know, with credit cards, right, is like typically it's just plastic, right? You have plastic with some numbers on the card. But with the Reserve, that was was the first card and then I now have the Amex Platinum but that was the first card where it actually like you set it down on the table to pay right and you hear an audible like like that clink literally and it's like it makes you feel powerful and you're like oh my gosh who am I like

this is the height of luxury so I yeah and I I imagine it was 100%, of course, like a decision that was like very intentional. Yeah, yeah. So we actually, in the visa rules that I helped write, we would say the weight that it needed to be and the types of material that it would be. And it was actually interesting because this is a travel card. And so it would sometimes beep in the metal detector. So during our test, we would have to make sure that the metal that we used wasn't beeping in a metal detector. Oh, shit you don't think about. Exactly.

Yeah. So, yeah, I mean, it was a really interesting experience. And I think the important distinction to make with women in credit and the industry was, you know, up until 1974. You could not have a credit card in your own name. Exactly. Women could be rejected from a credit card without a male co-signer. And for business loans, that was until 1988, which was, you know, I was thought of to be in this world at that point. Right. And so, you know, since then, after 1974, RBG's work with ACLU made it illegal, right, to say,

if woman, then. However, what we're seeing with the credit industry today is that because the system truly was never designed to center women or let's just say- Any marginalized group. Exactly. Any marginalized group. The downstream impacts are there. You think about end-to-end, you think about credit scoring and how that reflects systemic bias, which is a whole conversation. You also think about the way that advertising is working is that banks are advertising to men 13 times more than they're advertising to the rest of these groups. Which, can I pause you there? Yeah. Okay, so they're advertising 13% more to men. 13 times more. Oh, 13 times. 13 times, yeah.

But women hold the majority of the buying power. Exactly, yeah. And I'm sure you know the stat, but by the end of this decade, women are slated to hold 75% of discretionary spend. So is that because they're not stupid people, obviously, that are running these companies. So where's the disconnect? Is it the bias? Is it the bias? running these. So where's the disconnect? Is it the bias? Is it the bias? Is it the expectation that the man in a heteronormative relationship is owning the financial decisions? I'm sure it's an

onion-layered problem, right? You start peeling back onion layers. But what do you see as the disconnect there? So there are multiple pieces. I think the first one is that men traditionally are the financial or have been the decision makers at the household. And so what we see actually is that women are twice as likely to be authorized users on a parent or on a partner's card. And so it's these men that are getting the products, whether that is because they actually can qualify for them or it's because- They're the ones actually being marketed too. Exactly. So there's so much around that. And then women end up being the ones making the purchasing decisions. But as these authorized users, which, you know, brings the problem full

circle where women are actually building credit for their male counterparts and earning rewards for their male counterparts, right? So that's the second piece is kind of this marketing, you know, understanding issue. The third piece is education. One of the things that we saw was that women are half as likely to have received an education on credit by the time they reach high school. And we all know that we're not taught about credit in school. We don't know where to learn about it. And so there's this education gap that never really closes. So that's the third piece of this onion layer is that if you don't know the rules of the game, you don't want to play. So that's kind of the third piece. And the last piece is actually the rewards.

They are much more catered towards where men are spending most of the time. So if you look at these travel rewards cards that, again, I was building at Visa, they are rewarding where these male-dominated categories like dining, like travel. And again, I love to travel as much as the other person. But what we're seeing is that women are spending significantly more in fundamentally different categories like retail, household goods, pharmacies, beauty, all of those categories we're spending a lot in and that's not being rewarded on traditional products today. So it's kind of this slew of marketing, education, legacy, rewards, and it turns into this kind of just whole system that truly does not center a population that, to your point,

holds the spending power in this country. What has been really inspirational for me is seeing young women who are coming into the workforce at greater rates than ever before and having incomes higher than ever before and really saying- Being more college educated and, yeah. Exactly. And really saying that we want to know and we don't want those things to be true. So I think the intention is there. And of course, everything that you're doing here proves that, right? This group of financial feminists who are just like, I want to know and I want to be able to play, right? I want to learn the rules. And so I think the industry hasn't really caught up with

that in creating products and services that are actually centering women. And I think a lot of that is also because the financial services industry is so male dominated, right? You don't see as many women as we would like to that look like you and me. So, I mean, there's so much work to be done, but I think we are in an upward swing. Yeah. And the stat that I think about all the time, which is the one you cited of like, credit card, couldn't have one in your own name till 1974. My mom was born in, you know, 1962. She was in middle school by that time. You know, it's not that long ago that there was this huge gap. And yet we wonder, like, why aren't women able to take advantage of these things? And why

aren't women able to build credit? And then we remember all of these statistics of like, basically yesterday, women didn't have the opportunity to do any of these things. Exactly. Yeah. There was actually an interesting interview that I heard from Hillary Clinton. And she was saying that, you know, even after this law was passed, she still experienced discrimination when it came to getting a credit card. And they had asked her to have Bill as a co-signer. And she said, I make more money than him. I'm like, I'm sorry, do you know who I am? I know, I know. So, I mean, yes, there is a certain thing as, you know, laws being passed, but I think history time and time again has showed that it's, that's not enough, right? There needs to be so much more that needs to be done.

Right. So I'm writing my first book and I'm writing about, I'm doing a whole chapter on debt and a huge portion of that is around credit cards especially. And from the research we've done, we know that actually the number one reason women get into debt is they simply don't understand how a loan works. So in very basic terms, can you describe the process of signing up for a credit card, putting a purchase on the credit card, process of signing up for a credit card, putting a purchase on the credit card, and hypothetically, the different payment options for paying that balance back. Absolutely, yeah. So let's start off with the application process. So you go, you figure out you want this product, you apply for it, and they'll ask you for some information. You'll share that information and

you get a decision pretty quick. What's interesting is in the background, there's a lot going on. So this, you know, we call them credit issuers, right? That could be your bank that's giving you your credit card. That can be, you know, a landlord that's giving you your home. It could be a loan for a thing, right? And so what they'll take into account is, first of all, your credit score, but also each of these different credit issuers have their own secret sauce that they put into it. And so, you know, some issuers might want to know, okay, what actually is your income? And they'll have you submit a pay statement. You know, other issuers, there's new types of ways to think about underwriting is what they call this process. So a lot goes into that and then they decide, okay, yes or no, do I want to extend this person credit? And if yes,

what terms do I want to extend it on? So what interest rate do I want to give them, right? If you are riskier, they'll give you a higher interest rate. What is the minimum payment that you need to pay at the end of each month? When they say riskier, what factors or criteria are going into designating somebody as risky? So at the highest level, the way I think about how credit scoring is created is thinking about if you would lend money to a friend. And so there are different factors that go into credit scoring. And so one of them is your length of credit, right? Have you had credit products before? And this is a question that you would probably ask your friend, right?

It's, hey, have you done something like products before? And this is a question that you would probably ask your friend, right? It's, hey, have you done something like this before? So your length of credit and also whether that credit was in your own name or in someone else's name, were you primarily in charge of paying that back? That's a huge piece of what goes into it. The second piece is, okay, if you had credit, how were you using it? Were you paying credit back on time? Were you paying it back in full? And so you want those answers to be yes, right? And so the more you're doing that, the better someone is to lend you something. The third, which is kind of an interesting concept, is this credit utilization concept.

kind of an interesting concept is this credit utilization concept. And essentially what credit utilization is, is it is the percentage of your total credit line that you're using. And so really simply, let's say your credit line is $1,000, you use 100 of it, you've used 10%. And what issuers want to see is that you're actually using a very small percentage of your credit. As little as possible, yeah. And what's wild is that you want to have your credit utilization be below 30% at all times, but actually that's just to keep you out of the red zone. So if you're above 30%, then that's actually actively a red flag and that can take your credit. So what we would always say is keep your credit below 10%, 5% every single day of the month. Because what I've heard is

people will come to me and say, okay, well, I pay my card off in full at the end of the month, so I should be fine. And the challenge with that is that your credit might be reported to credit bureaus at some random day in the month that you do not even know of. And so even if you're paying in full at the end of the month, at that point in time, if your credit utilization is 35%, 50%, that's going to be docked against you. And so you want to keep your credit utilization really low. There are other factors, smaller ones like, okay, are you seeking credit a lot? So that's called, do you have a lot of hard pulls? If you're looking for your credit score on your own, you should do that as much as possible. That's a soft pull and that's not going to affect your

credit. But with the hard pull, which is basically if you're actually applying for credit and your credit is being used to determine whether or not you should be given a loan or not, that credit card issuers don't want to see that you're seeking a bunch of different types of credit all at once because that possibly is a sign of distress. And all of these factors kind of have their own biases baked into them. So I'm not going to talk about that, but I will just talk about the fact that this is how it is done today. So those are some of the top factors that they're going to look into, which is, okay, have you been building credit? If you had credit before, if you have credit, how are you using it? Are you paying it back on time? Are you paying it back in full?

How's your credit utilization? And are you seeking a bunch of credit or not? So yeah, all of those things go into it. So we have a credit episode as part of season one and literally reviewed everything you just said. And we've seen, I've seen it both in my credit and also one of the recommendations I give

is if you can, ask for a credit line increase and then don't use it, right? So we've seen a bunch of community members go out and get credit line increases and then see their credit scores go up because again, that utilization rate is smaller. So I think I'm at like 3.3% credit utilization.

Amazing. I love it. Which I love. And I haven't checked it recently, but last time I checked. Okay. So we've applied for the credit card. Let's say we've gotten accepted due to these factors. Right?

Okay. I have gone and bought, I don't know, a $100 sweater from TJ Maxx. I don't know why TJ Maxx are selling a $100 sweater. Bad example. I don't know. $100 sweater from TJ Maxx. I don't know why TJ Maxx are selling $100 sweater. Bad example. I don't know. I bought a sweater and it's $100 and I put it on the card. What happens now? So there are different payment options that your credit issuer is going to give you in the 10, 20 page document that you get in a bunch of legalese, right? So to... Looks like it's written in German.

Exactly. Yeah. So to break it down, so you have multiple options. One option is to pay the minimum fee, which we do a fun myth versus fact quiz on our end, but essentially, I hear a lot from many women disproportionately. Carry a balance. It increases your credit score. Exactly. I don't know who spread that myth. I have the not so conspiracy conspiracy theory that it's credit card companies because they keep you in debt.

I mean, that's how they make money. And there's actually a slight tangent. But there is a study that I read that when credit cards were first invented in the 50s, they actually worked with behavioral economists to say, okay, well, we're making a lot of interest on people. What's a way to make more interest? And they actually did studies that said, if you show someone the minimum payment or whether they should pay in full or some other option, they will always default to the minimum payment. So anyway, these folks are smart, right? But we're going to be smarter here. So do not pay just the minimum. And what I always

say is unless you really, really have to carry a balance, credit card debt is some of the most expensive money you will ever borrow. So even if you're in a situation where you can't pay the full amount for whatever reason, pay as much as you can above that minimum. Anything that you can, just pay it there. So anyway, so that's one option is you could pay the minimum, do not recommend that option. And let's say in this hypothetical example, our due date's the 15th. So if I, on this $100 sweater, send in $25, let's say that's the minimum payment, by the 15th, what does that mean for now the 16th of the month? So for the 16th, you are still owing the other $85. Right. And that $85 is compounding in interest. Yes. And essentially,

compound in interest is this evil concept that... Unless it's working for you. If you're investing, compound interest is great. Exactly. But if you're in debt, compound interest is bad. Absolutely. Very, like, very, very bad with a capital B, right? Because you're accruing interest on your interest.

And it adds up so quickly. So fast. And it's really, really challenging to get out of. I mean, that's a whole other conversation is being in debt and paying that off. But that dings your credit as well. And it goes back to the utilization factor that really affects. So yeah, so the minimum payment is an option. You can pay some other amount that is between the minimum and in full,

or you can pay in full, which is kind of the ideal way to be using these credit products is you use them like a debit card, right? You're paying on credit, you're earning whatever perks, whatever rewards, you're building credit, but you're not getting into any of those nasty gotchas that my mom always warned me about. If you don't pay anything, what happens? So there are various things that can happen to you. You'll get hit with late fees. And actually, that's kind of the best case scenario. And you're getting interest, right? So it's interest plus the late fee. Exactly. So interest plus the late fee. And then what happens is, you know, 30, 60, 90 days later, depending on what your issuer decides, they're going to start reporting you delinquent to credit bureaus.

And getting a delinquency show up on your credit report is some of the hardest pieces to remedy because it stays on your report at least for seven years. And it makes debt and borrowing anytime so expensive for you. And those rates just really don't go down. So once you do that once, yeah, I think a black spot is the best way to describe it. So when you're thinking about using credit cards responsibly, I often compare them to a knife where I'm like, knives are great because they can cut vegetables, right? And if used properly, they're a great tool. They can also, of course, cut you, right? So in responsible credit card usage, for me, it's always pay it on time and in full. If you can't, same thing. Like, pay as much as you can. And it's also why I advise saving an emergency

fund first so you don't hopefully have to go into credit card debt. What other responsible ways can we use credit cards? Or what does it look like to be a responsible credit card user? It's really not rocket science. It's pay it off on time and in full and keep your credit utilization as low as possible. The rule of thumb that I always say is if you pay your card off every Friday, you should be in the clear of having your utilization below the good threshold. I send my monthly payment in for the full balance, like, I think the day before it's due. Yeah. my monthly payment in for the full balance, like I think the day before it's due. Yeah. I know, I'm trying to remember if credit cards, and you could tell me, because I know there's some benefit to like paying loans off twice a month as opposed to just once a month. Do credit cards work like

that as well, where if you're paying them more frequently, that's a better idea or a better option? Yes. But the reason is not that you're paying it off more frequently. The reason is that it keeps your utilization low. Got it. Okay. So it all comes back to credit utilization. Got it. So I always say pay it off every Friday if you can. If you have a big purchase, just pay off that purchase immediately after so that doesn't affect your credit utilization. And actually, we've done studies where we've had women reduce their credit utilization and pay their card off every Friday, and their credit scores increased 20 points on average in a week.

Wow. And one woman's score went up 118 points. Oh, hell yeah. That's amazing. It's super effective. And actually, it's very relevant for this audience is credit utilization disproportionately affects women because we are getting lower credit lines for many reasons. We lack credit history. We don't know. And so even if we are spending the same amount as a man, our credit utilization looks artificially inflated. Because our credit line isn't as high. Exactly. So yeah, if you, instead of the $1,000 credit line, now have a $500 credit line, but you're spending the same amount of money.

Yeah. Exactly. So especially for, again, any group that this industry was not built for, making sure to keep your credit utilization low is one of the greatest hacks. And that's really going to skyrocket your credit score almost overnight. Yeah, that's amazing. In my research, and just it's pretty obvious, again, once you start doing any sort of thinking about this, but most credit card companies, they seem to play this kind of gotcha marketing, right? Where they don't want you to know how interest works in order to make money. Because if you don't know how a loan works or when you're charged interest or how you're charged interest, of course, like we said before, that means more money for these companies.

How are you working to combat that? Yeah. So I guess we can dive into our product. So essentially, so we are building a product called Sequin. And essentially what Sequin is, is it is a debit card and credit builder that builds credit more effectively for women and earns rewards that pay back the pink tax. And essentially, the reason that I'd wanted to build this in the first place was I had been building these popular credit cards like the Chase Sapphire Reserve. I got rejected. Which is still so funny. Every time you say it, I'm like, it's so – it's honestly – it shouldn't, I guess, be as surprising, unfortunately, as it is. But it's just like you knowingly – like you built the game and then you're like, I lost.

I know. Like how? I know. I know. I know. I know. I know. And so, you know, I looked around and I saw just so many smart and ambitious women and saying that, you know, statistically, we are better to lend to and we are holding the spending power. And actually, I saw stat and visa data that 70% of women are spending on non-credit building tools. And that is leading... So debit cards, cash. is leading. So debit cards, cash. Yeah. And credit cards and other people's names. And that was leading to us having these negative credit experiences, like getting rejected, like getting lower credit lines, higher interest rates. Right. Because if you're a lender, right, you're saying,

okay, I'm going to give you this thing because I trust that you can, quote unquote, like handle it. Right. But if you have not established that you can handle it, even if you're like, I can do this, right, to your point of like, I have the income, like I can do this. But if you haven't proven that to the system yet, it doesn't know. Exactly. Yeah. So I had no idea how to start building credit because credit is a chicken and egg game that you need credit in order to build credit. But you build, yeah. So, you know, I left Visa just thinking that, you know, this was wrong. I didn't feel like the industry was keeping up with where women were going in society, which, you know, is everywhere.

Right. And so, you know, decided to build this product. Essentially, the way that Sequin works is it is a debit card and also a line of credit. And so when you sign up for Sequin, you're signing up for two things. And the line of credit becomes available via the debit card. So when you're actually using this product, it works exactly like your debit card. There's no interest, there's no late fees, there's no gotchas. It just acts like your debit card. And in the background, essentially what we're doing is every time you're spending, you're making a purchase using that line of credit. Got it. And you pay that back every week instead of monthly just to make it easier to budget. And then at the end of the

month, we tally up all of your payments and we actually report those to credit bureaus. So in effect, all of your payments are turning into credit building activities. Right. In a way that's like a safety net, right? Exactly. Yeah. You can't get into trouble with the sequin card, which is something that, you know, I saw a lot of, again, you know, minority women folks struggling with, right?

Where you're not educated about the system, so you're making these avoidable credit mistakes. If you're first gen, no one in your family is educated about how the system works. Exactly. There's so much privilege steeped into even understanding how these systems work. And so we wanted to create a product that wouldn't get you into trouble, but would allow you to build credit. And so essentially, think of this product as your key to unlocking the world of these higher value, you know, travel cards, et cetera, which, you know, we all want. But we need help to get there. And so that's kind of the nitty gritty of this product.

And the last piece I'll add that's very cool, I know we've talked about credit utilization quite a bit. Yeah. So we actually make a payment for you the date that your credit utilization or your credit is being reported to the credit bureaus. And so you can max out this card and your credit utilization is not going to be affected. So you're not- Well, and taking the guesswork out of it for the person. Exactly. Exactly. So yeah, I kind of think of it like a credit card with training wheels that just builds your credit, teaches you about the system. And there haven't really been products like this on the market. So it's really exciting to be able to offer something that, something I just wish I

had had when I was starting off on my credit journey. So how does Sequin make money? So we have a monthly or an annual fee. Okay. So it's just a normal kind of subscription model. Cool. Compared to other products that are in kind of like the early credit stage, we're offering rewards and we are also not requiring you to put up your credit line up front. So essentially, we are charging either $9 a month or $89 annually. And a lot of that gets paid back in cash rewards and refunds on

the pink tax. So we'll talk about that next. But we didn't want there to be this interest mechanism. That's not how we wanted to make money. We wanted people to understand how to budget for this product and use it responsibly. This question I got actually in a comment and it made me a little uncomfortable and I wanted to talk to you about it. And get your insight because you definitely know more than I do. I always thought, of course, as I'm going to use a credit card, right, and I'm going to use it responsibly and use it as a debit card and get a bunch of rewards and basically use it as like the ultimate like fuck the patriarchy tool. Because I am taking money from this huge billion dollar corporation and being like, actually, you expect to make money off of me. I'm going to make money off of you. You're going to pay for my flight to Europe.

You're going to pay for my lounge access on that flight to Europe. Yeah. But really, and again, correct me if I'm wrong, it almost feels like I'm almost making my money and my rewards off the back of people who are going into debt. Is that accurate? Like, is that what's happening? Is it like they're able to offer rewards to people who are able to use these credit cards responsibly, either because they're making smart decisions, or more likely they probably have the privilege of using those cards responsibly, are more likely, they probably have the privilege of using those cards responsibly, on the back of a bunch of people who are going into debt trying to survive or, you know,

trying to use these credit cards. So that is part of it, but there's actually another kind of disturbing issue here. Oh, we love them. Okay. Is it more disturbing than this first one? Buckle in. Okay. So essentially, in addition to interest, the way that credit cards make money is on interchange. And essentially what interchange is, is it's those merchant swipe fees. So when it's saying, you know, you go to a small business and they say, we don't accept credit, that's because the fees that they have to pay cut so much off of their margin that it's not worth it to them. Or you'll go to some places. Like, actually, we're in L.A. It's hard to go out to a restaurant and not pay for valet parking because there's no parking, right? And so

they'll say like, oh, $10 for this. And then it's an $11 fee if you use a credit card. Exactly. Exactly. So what happens with these more premium travel rewards cards is that the interchange is higher. And the reason that, I guess the rationale behind that is, okay, someone with a travel rewards card is probably spending more. And so in order to, you know, to get that additional spend at your merchant, you should be accepting this card. And the interchange fees end up kind of mapping to your rewards. But what ends up happening is if you're a huge business, that doesn't really matter, right? 2%, 3% per swipe fee, someone else can pocket it. It doesn't matter. And for the convenience that you're offering hypothetically to a customer of just not having

to use cash or, yeah. But what ends up happening is these smaller businesses are the ones who end up paying the price. Interesting. And so in addition, what you said is an element, but more of a downstream impact. But what we really see with this interchange issue is, great, if you're a huge corporation, you can pay 2%, 3% per swipe. But if you're a small business, that really does kind of gouge you. And so a lot of times what I'll say is, if you're shopping at a small business, And so a lot of times what I'll say is if you're shopping at a small business, use either a debit card, one that has credit building abilities like ours, or try to pay in cash if you can. I mean, it's going to be the small ticket purchase. I don't – so we'll talk about this in a second.

I don't own a debit card. I never have. Like I literally have never owned a debit card and neither have my parents. And I hardly ever keep cash on me. I put everything on a credit card and I pay it off in full every month. But I didn't, you're exactly right with the merchant fees. I knew that, but it wasn't, it didn't like click to me. I was like, oh. And then I'm like, okay, do I take care of myself and give myself the little cash back? Right? Or am I, of course I want to take care of small businesses too. So it's,

okay, I'm gonna have to sit with that. It's something to think about, right? And for, it's the same way that you think about charity or whatever else is however you want to take care of small businesses too. So it's, okay, I'm going to have to sit with that. It's something to think about, right? And it's the same way that you think about charity or whatever else is however you want to split that up. I mean, of course, pocketing the cash back, building credit, all of that is really important. And so it really does just depend on where your own, wherever you feel comfortable. But it is, I think, an interesting fact just to illuminate, just to understand. Yeah, and just to think about. Yeah, just to think about, exactly. Yeah, interesting.

Yeah, I'm going to have a whole moral crisis. You touched on this a little bit, but a lot of women have no idea that just because you have a credit card with your name on it doesn't mean you're actually building credit. So what are some common pitfalls? And we mentioned a couple of these already, but what kind of mistakes are you seeing them make when they're building credit? Absolutely. So the one that you just mentioned, being an authorized or secondary user on someone

else's credit card that is a parent or a partner, more likely, that is not building your credit as effectively. And again, that goes back into the factors that go into your credit. Are you the primary user? Were you the person responsible for paying back? So it'll get you credit visible. Your name will be in the system, but it's not going to have those same credit boosting effects. So that's one. The second piece that we see is just these avoidable credit mistakes, like paying the minimum, like paying those late fees as well. We see women and minorities disproportionately doing that.

However, when we're educated, that gap closes, which is interesting. And so it really does relate just to a lack of education around it as well. The third piece is not opening up a credit building tool in your own name early. The length of credit piece is so important on this. And, you know, sometimes you'll say, oh, you know, I have five years of history. That sounds great. But other people have 30 years, 50 years of history. And unfortunately, this isn't something that you can go back and fix. And so, you know, just being able to tell your loved ones, like, hey, let's start getting you building credit early and responsibly is really important as well. So those are kind of the top three tips. Switching gears into entrepreneurship.

Yes. Can you walk me through the venture capitalist process? Because I know the stats, and I'm sure you know the stats. Not only do women not receive venture capital, what is it? 3%? I've heard somewhere two to three. Especially women of color. It's even worse if you're a woman of color, but very few venture capitalists are actually women. And so can you just talk about any experiences you had raising VC and what were the challenges, especially as a brown woman trying to do that?

Absolutely. I mean, gosh, how much time do you have? I mean, we have like an hour, so I will sit here and be present for all of that. Yes. So I think, no, there's two elements to this. I think the reality is that someone who looks like me is less likely to be funded by a venture capital world. And I think it's really important to go in and be equipped with facts and expertise and data. And I think I've seen that I need to come into meetings 10 times more prepared than my male counterparts. And this is not unique to the venture capital. This is every industry, right? As a woman, you have to be 10 times better. And so that's something that I've seen going in is just getting grilled, right? Getting grilled on stats, getting grilled on my background, getting grilled on my vision. It's a lot more questions. And actually, I was in an early pitch, and I was pitching to a

group of mostly male VCs, but there was one woman. And after, she said, in my years of venture, I've never seen someone be grilled like that. And you did a great job. And so, you know, for me. Which feels very validating, but also like, what the fuck? I know. And actually, I had that exact feeling at first. I was like, oh, thank you. Because this is a woman I really respect. And then I was like, that's really messed up. Why did that happen? So I think, you know, that's one element is there are those differences. You do have to be 10 times better. On the other side, one of my personal theses that I've come to develop is I really feel being underrepresented is your superpower. And coming in and saying, I know something you don't, I see something that you don't is actually so powerful.

I read the stats somewhere that every single woman is a billion dollar opportunity because most systems in our society have not been designed with women, with minorities in mind. So if you see something and you say, this is not working for me, it's probably not you. It's the system and you can do something about it. So I think there are two sides of that coin of it's really shitty and I'm not going to downplay that. But on the other side, I do feel, I mean, that's why, you know, we're all able to see these opportunities and even you, right? You know, that's so much of your founding story as well. Have you been following the Elizabeth Holmes trial? Yes, actually a lot.

I am obsessed with her. Me too. Okay. I didn't expect to bring this up, but I'm really curious. I have an interesting response to this whole thing. And I want to know your thoughts because 100% I think what she did was wrong and 100% deserves to be prosecuted,uted. I think she's 100% though also getting way more bad press and is being subjected to the kind of justice that we have not given to male entrepreneurs. And so it's interesting because it's like, yes, this is a step in the right direction where there's a bunch of Silicon Valley people who are selling dreams rather than actual products. But I feel like there's a massive double standard because of her success as a woman. I have so many thoughts on this. So the media loves a good takedown story of women. 100%.

They love it, right? The away co-founders, the wing co-founders. Like, I can keep, like... Exactly. And by the way, when I first launched Sequin, I'd just written a Medium article that had legs of its own. And there was a reporter who just picked up the story and just trashed everything that we were doing without asking. I mean, just like, oh, actually, the premise of the article is that if there actually are so many discrepancies in the system, the bank should be held liable. I'm like, yes, the bank should be held liable. But in the meantime, let's also do something about it, right? I'm going to be sitting around waiting for the banks to be held liable for a good chunk of time exactly yeah i mean i

think we see it time and time again you listed i would have listed all the same people as you are getting built up by the media and then they love the takedown they love the destruction which is like we as human beings we love the pitchforks. We love the tort. Like we love that. And I think, especially with the double standard around, yeah, like she was Silicon Valley's like golden, golden girl. Sweetheart. Yeah. Yeah. She, I mean, I think, you know, there were certain lines that were crossed and that's why. And I want to be very clear. I want to be very clear like i 100 believe that she committed a crime yes absolutely just the perception of that and the fact that we know that a bunch like i know because i've worked at startups like you you you end up selling what the potential of this thing could be that's the whole

reason you get venture capital right is you're selling the potential of this thing you're going on shark tank typically right and you're selling the potential of this thing and so i think for her what of course the line that was crossed was like when was she actually lying about what the thing could do at that moment exactly yeah turned from this is my vision to this is what this thing does right now and was being tested on very real people right and that's the problem. But I know men have done that shit. I know men have done that shit. I know.

And they are not being prosecuted. I know. I know. I mean, double standards are real, right? Yeah. I think anyone who denies that, I think, you know, could use a little bit of eye opening and a little bit of education. But I agree.

I mean, there are just so many of these stories. And what's interesting is that, did you watch Super Pumped? No. It's the new one. It's on Showtime, I think. But it's on the Uber CEO. Oh, no. And it's from his perspective. And it's very interesting the way that these two stories are being told even are, you know, it shows him and, you know, his faults as well, but it's in a different, a slightly different light. And it's interesting watching these shows back to back too. So I agree. I mean, I think just the media

loves a good takedown, especially when it's, you know, a woman. Totally. Yeah. And it's not, I think it's, again, it's not just the takedown. It's the, yeah, it's, know a woman totally yeah and and it's not i think it's again it's not just the takedown it's the yeah it's and the double standard it's just um i think we also expect and weaponize women's altruism right as we say like we we value women's empathy in our altruism to like do the right thing quote unquote and then if we see a woman not quote unquote doing the right thing, we punish her or jeopardize her or her opportunities or career in a way that we just don't with men. So I think part of the conversation around Elizabeth Holmes, which again should be the conversation, it's just that it's not happening with men, is it's like, what the fuck? Why did

she take advantage of all these people? People's medical history was on the line. Like, you know, we're not saying that about men. I was like, didn't she care? Doesn't she have any remorse around this? And like, we don't really do that with men. There's another piece. I 100% agree with that. And there is another piece related to her where in the trial, they were talking about the fact that she had used company

funds to buy clothes and to buy whatever else. The weaponization of the frivolous spending, actually. I have a question about that too. Yeah, exactly. And it's just, she is held to a different standard. The VCs came out, one of them was like, oh yeah, and I thought she was a pretty girl, right? Which by the she was a pretty girl, right? Which, by the way, like jaw drop, right? Both of us. I wish like everyone could see both of us. But that is a part of the standard.

And I think it goes back to the pink tax conversation. We'll give you VC, you cute little woman entrepreneur, as long as you're hot. Yeah. As long as you're nice to look at. Exactly. And then we'll tell you that you're frivolous, that you're spending frivolously on the things that we expect, right, you to look hot for, the makeup and the clothes and the hair. You can't win. No, you can't win.

You can't win, right? You cannot win. I mean, again, I think we keep on caveating this with she lied, it was fraud. I don't want to be super clear. But everything leading up to that, right? Before she crossed those lines, it's a pretty typical story of you have a vision, you're selling it, you're out there, you're doing what it takes.

And she wasn't a scientist. She didn't have any experience in healthcare. And a bunch of people were like, that's crazy. And I'm like, literally people do that shit all the time. People will say, I want to start this company. I have no idea how, so I'm going to go and like, I'm going to go employ a bunch of really smart people who can do this for me. That's completely normal. So yeah, I'm so fascinated by this story. I know the double standard. I mean, I think the other one that I think back to a lot also was a way co-founder as well, where, you know, she was just, she,

there was a bunch of those where it was like and again that that whole idea i think with a way story i don't know the full i haven't read that article in a long time so i don't want to misspeak because i think again there were like there were serious issues that were happening but again it was like we have a certain pedestal that we put women founders on and then we're really excited to watch them fall and in addition we're like an insensitive uncomfortable work environment how dare these women and it's like men have created uncomfortable work environments and also been praised for it exactly steve jobs bullshit where they're like he wouldn't shower and he would yell at his employees but because he was passionate and because he was a visionary. And I'm like, make that make sense. I know. I know.

I know. I know. I mean, you can see it when you have these comparisons, right? You have like, again, you have the Uber CEO and you have- WeWork CEO. Did you watch that whole thing? Yes, I did. There's so many of these now, right? But yeah, I mean, it's hard to watch.

And I think, you know, coming back to it, I think about my day-to-day, right? And I think about what does this mean for me? I mean, I am ready to get a lot of criticism for what I'm doing. I think ultimately you just have to care and really believe that you're doing a good thing. And for me, it's talking to thousands of women who are like, I feel so much more credit confident and empowered in my credit after talking to you or using your services. And I need that. And so when all of the other bullshit comes at me, that's what I think about. Right. Knowing that you're doing it for a reason.

I know. I think the intentionality is the most important piece. Yep. And yeah, not lying. Not lying and frauding investors. Yes. And giving positive cancer test results when you don't have cancer. I have been obsessed with that.

I know. Are you watching the dropout? Yeah. The fantasy freak? Yeah. I watched the most recent episode last night. It was so good. I think I've seen two or three episodes.

There's just one more out. Okay. I have, yeah, I've seen two or three episodes. There's just one more out. Okay. I have, yeah, I've listened to the whole podcast. I've read, I've read, what is it,

Bad Blood. I've read, I have, I have a very big obsession with like scam artists and grifters. Like, I love that.

I mean, there's a lot of that out there right now. Yeah. Tender Sundler. Yeah. No, I just,

I'm really fascinated by it because it's literally, so the words con man or the word, you know, the phrase con man is confidence man, right? So it's like people who are just incredibly confident. You even like the catch me if you can's of the world. No, I love that movie. I know, me too. I feel like we have a similar interest. Yeah.

I mean, it's just so fascinating. What is the role of confidence? And I mean, it just, it gets you all of these crazy places. But when you cross the line, then. Right. Well, and then some people I feel like do actually have a conscience, like, you know, the Leo DiCaprio character, which is based on a true story. Right. Frank Abagnale. And then you also have the people who I think are, you know, borderline or actually sociopathic who don't feel anything and who are okay manipulating people because it actually makes them feel good to manipulate people. Yeah. Yep. Didn't think we'd be talking about this. I know. No, I'm really, yeah, me too. So starting your own business rather than like taking a banking job or, you know, a job in finance, right? Because you graduated with your MBA, right? And then you were like, I'm going to go start a company. Yeah, I started the company actually when I was in my MBA. Okay. Yeah. Was that super daunting in the light of COVID? And did you know you always

wanted to run your own business? So, you know, going back to the Steve Jobs conversation we're having. So I, so first generation immigrant, born in India, we moved to Cupertino, and that's actually where I grew up. So the land of Steve Jobs, the Apple world. Google, all of it. Yeah, all of that. Growing up, when I looked at entrepreneurs, I thought it was Steve Jobs. And I looked at myself. I looked at my values.

I looked at how he was leading orgs. And he is a genius. He's a visionary. All of those words, again, that we used to describe men that are true. But I don't think I ever – I didn't see entrepreneurs who looked like me. And I think it's very – it is very hard to be who you can't see. And so I had my – went to Visa, worked there. We know that story.

I left Visa because I felt there was a lot of opportunity to do something good in banking. There are so many underserved populations that need help. And so I went to business school thinking that maybe I could be an executive at a big bank and I could really focus on some of these populations, especially given my- Make some of that change within these like monoliths that already exist. Exactly. And then I started getting offers for those positions and I realized that the change that needed to happen, because it's so systemic and ingrained, it couldn't be made from within the system. And when I started thinking about populations that I really cared about, it was the ones that I identified with, right? Being a woman, being a first-generation immigrant, being a person of color, all of these populations are being marginalized and left out of the system. And so I looked around and I said, I don't see a company that feels like it's going to address this.

And the way that you want. Exactly. And I was looking around and then I started looking at myself and I said, I have this amazing background. I really care. Also, I think the timing was good. Time's up was happening. Me too was happening. And I was just like, the future is so female. Hell yeah. Like, let's go.

And so I was actually doing my MBA summer internship at a design agency called IDEO. Yes. And. Human, was it not human design? Design theory, right? Yeah, design thinking. Yeah, yeah, yeah. I am.

Oh, this is very weird. I, one of my internships in college was helping the marketing for a book all about like design theory. Oh my gosh. I don't know if it was one of the IDEO founders. It was like somebody who had like worked in that whole space. Yes. That's so funny. Yeah, yeah.

And so, you know, it's a really creative bunch. And again, I was thinking a lot about, do I want to do because going back into traditional bank doesn't really make sense for what I want to do. center women and mostly de-center who the industry was built for. But then as I thought about who I really cared about helping, I just went back to my mom. And I was like, I just feel like so many women need this. And there's this amazing quote from the president of the Women's World Bank. And she said, when you build products designed to center women, they work better for everyone. Unfortunately, the other way around isn't true. And I think- Will you say that one more time?

Yes. When you build products and services centered around women, they work better for everyone. Unfortunately, the opposite is not true. And so what we're seeing with our product right now is so many guys are coming in and, you know, are saying that we love this. This is really cool. Can we use it? And we're like, yeah, the point is to be inclusive and to think about something differently. I have an experience with her first 100K, too, where men are like, can I be here?

And I'm like, as long as you're chill, yes, you can 100% be here. We want you here. Yeah. I mean, the allyship is so important. If you're being a dick, no, you are not welcome be here. We want you here. Yeah. I mean, the allyship is so important. If you're being a dick, no, you are not welcome. But no, yeah. Exactly. Because I'm like, everything else is super bro-y and I don't want to be a bro.

And I'm like, welcome. Welcome. No bros allowed here. Yes. I love it. Yeah. So I was thinking about this. I actually was washing hands next to a woman in a restroom, which is relevant.

I add this because this is why we need women in positions of power, because this happens to guys all the time, right? They're like, I was with my buddy golfing, and I talked about my business idea, and then it got funded. Talked about stocks or whatever. Yeah, exactly. And so that's what happened to me, was as we're washing hands in a restroom, I just spilled out. I was like, I think women have this incredible spending power power and we're not being served by um I mean briefly we're colleagues for my summer internship I didn't know if it was just like a random stranger in an airport being like let's talk about the spending power at IDEO at

my MBA summer internship yeah so I mean you're just like hey can I pitch you my business no this was within the confines of my internship. But yeah, she was asking me how my internship was going. And I said, it's fine. However, I just feel there is a huge opportunity to help women step into their financial power. And she said, I mean, have you thought about anything else? And I was like, I have experience building credit cards. Building credit is a huge issue.

I built most of the most popular rewards cards on the market. So I think I could do something that could really stand for something meaningful and reward women's spend. And she said, well, I'm a part of the investment committee. Do you want to pitch to the investment committee? And it's one of those, in movies, those movies, those like moments that can just like change the trajectory of your life. I didn't think because probably if I thought more, I would have been too scared. I would have said no. But I just said, yeah. And I pitched the committee and they loved it.

And they gave me a little bit of seed funding. And then I went out to raise the rest of our pre-seed round. And you'll appreciate the story. to raise the rest of our pre-seed round. And you'll appreciate the story. I had been approached by three very traditional VCs who wanted to take the rest of the round. But I said, the whole purpose of this is to get women wealthy and women partaking in the financial system, whether it's with building credit or whether it's with being VCs and having your hands in something like this. And so I ended up reaching out to a bunch of amazing women investors, including Carrie Schwab Pomerantz, who's the president of the Schwab Foundation.

Right. And she said, yes, she invested. And 92% of our cap table is women. Wow. Which is a flipped. That unfortunately shouldn't be so jaw-dropping, but that's amazing. It is a flipped cap table. It's usually 100% men. Men. Right. Wow. Which is a flipped. That unfortunately shouldn't be so like jaw dropping, but that's amazing. It's a flipped cap table. It's usually a hundred percent men. Right. Right. So yeah, I think being really intentional, I mean, it was harder for sure. It took me longer, but. It's a hundred percent harder. Yeah. It was a really, really good decision. That's amazing. That's so

cool. What would it look like if the credit card industry was built for women? Like if we were to tear it all down, we don't know anything. We're like little babies in a utopia. What does it look like if it was built for women? I think about that every day with Sequin. I think, you know, there are a few things that fundamentally would be different. The first piece is the transparency element. How does this work? How do you make money? What do I need to do to get into this system? What happens at the end of the month? I shouldn't have to listen to a podcast to know that you and your product should tell me how this works. The second piece is education around what these products can get you and talking about what is your next financial goal.

Let's work backwards. Let me nurture you into the system versus what's happening today is women are, first of all, not entering the system at the same rates, but are falling off every step of the way. So if you see from debit to your first credit card, there's so much dropout in terms of women actually and minorities. I was going to say, especially in black and brown communities. Exactly. Some of them aren't even getting to debit card or bank. Exactly.

Yeah, exactly. So that's a great point. So you're zero, right? You're using cash and whatever else. Or payday loan establishments to cash your checks. That's a whole other conversation we could have. For sure. Yeah, so going from there to debit card is even a leap.

And then debit card to credit card. Debit to credit. And then credit to investing and other tools. There's so much drop off at each part of the system. Or basic credit card with like 1% cash back to. Exactly, to a premium travel rewards card. Right, to me at the Amexinum. Like I didn't get there overnight, right? But yeah, there was the drop-off that happens every single step you make up the staircase.

Yeah. So nurturing you through that, how do you actually get from each of these financial steps? And then the third piece is community. And what we see and what I think about a lot is how do you make credit and finances, which is traditionally this one single player game, how do you make it a multiplayer game? Because your finances and every dollar you spend are representative of your values and what you care about. And so being able to share that with others, right? You know, where am I spending? What am I supporting? Like, what's cool this month, right? You know, it could be a whole gamut of things as well. So making it less of an individual experience or choice and more of a collective choice. Exactly. And having just a safe space for all of this to happen

and, you know, talk about things because, again, finances are so personal. And it's a reason that people stay in bad relationships. It's a reason. I mean, gosh, there's so much heavy material around finances. So I think just having that support as well would be different. Totally. So building the algorithm for sequent cards, what are you keeping from Visa and what are you disregarding? So disregarding, let's start there. It's probably the easier question. So we don't require a credit score for you to get onto our product. Or a credit check, right?

No. So if you're not requiring a credit score, then you're opening up, I didn't even think about this till now, because a bunch of undocumented people are not able to get credit cards hypothetically in the country, right? Yeah, exactly. You need an SSN. So I guess that's like a keep, I guess, in the future. I think there's ways around that. This is our first product. But yeah, so we don't think that you need to have credit to get credit. And so you don't need a credit score. We don't do a hard pull or a credit check on you. The only thing that we look for is that you have a few hundred dollars in your bank account

and that you've had that bank account for a few months at least. So it's not something that was just spun up overnight. And that kind of helps us kind of think about, make sure you're a real person essentially. Well, and also making sure that it's not so much that you're able to pay it back in a way that we need our money, but more just that you are financially capable of taking this next step. Exactly. Yeah. So that's what we look for. You know, yeah, we just make sure you have enough in your bank account to cover that credit line so you're not in a situation where, you know, the end of the week happens, end of the month happens, and you aren't able to pay back.

So yeah, so that's a disregard. Another, you know, and a lighter disregard, one of the pieces that I kept on hearing from women who I spoke with about their existing banking products was they're like, I have a question. Why are all of my banking products black or blue? They're ugly. They are very ugly. And I said, you know what? I don't know that, but somehow blue has become associated with power and security and

by the way blue is associated with the patriarchy right and so very masculine color exactly and again I like blue it's not it's nothing about blue I literally actually it's funny you say that because I could pull out I carry like three cards on me pretty much at all times since the amex platinum which is like a gray or like a silver. Yeah. Platinum, silver. And then my two Chase cards are both blue. My ink card for my business and my Sapphire Reserve, which is blue. Yep. Yep. So our sequin card is actually coral. Cool. I know. I love it. I have it. Yes. And actually funny enough. So one of our tenants at sequin is co-creation. I didn't want to come into this and say, well, you should want this. I really wanted to talk to a bunch of different women, a bunch of different minorities and say, you know, what do you like?

And one thing that came up was coral is a color that looks good on every skin tone. And yes, exactly like your lipstick. I love it. It's actually very simple. I'll show you a card after this. Perfect branding. So I built, I don't know if you know this, the Her First 100K that like, we call it Blackberry Sorbet internally, but like that burgundy brand color.

Yes, yes. That is the exact lipstick color I wear all the time. And of course, I've got like a different tone on today. But like, we literally built the brand around that color because we're like, we didn't want it to be pink. And we were like, what color? Because we still want it to be feminine. But yeah, again, we were like avoiding pink. And I was like, perfect. Branding. I know. And your lipstick is now sequin colored today. Yeah. So there you go. Like I planned it. Yeah. So that's the thing that we're leaving. The other piece that we're leaving behind is just,

again, the lack of transparency. So having the education is really core. The things that we're keeping are financial tools when used responsibly are really powerful, right? So there are some tools that exist in the market that are completely kind of outside of the financial system. And one of the pieces that I thought a lot about when I thought about how to actually help women and minorities get into the system is how do you set yourself up to play within the existing system to at least, again, give yourself that optionality? And so, you know, our line of credit reports to all three credit bureaus and that gets you credit visible. So, I mean, we want you to be able to partake in the system if you would like

to. So that's something we're keeping. Totally. Amazing. My last question for you, on the heels of this question around how is the world different if women have credit, what do you want women, specifically women of color, to know about building their financial lives? And what for you was the biggest aha moment or the biggest confirmation that this is what I want to do with my life. When I first started Sequin, I wanted to talk to as many women and as many women of color as I could. And it ended up actually kind of being a self-selecting sample because I'm a woman of color. So I think a lot of women of color felt comfortable talking to me. And I kept on hearing that they wanted to learn more about the system. They really wanted to know, but they felt they lacked confidence in understanding how the system worked.

Yeah. And because of that, they said, again, just like my mom, I don't want to make a mistake, so I don't want to play. And the amount of times I hear that, I don't mean to cut you off, but the amount of times I hear that of, I don't want to make a mistake, so I'm just not going to do anything at all because it feels like such life or death when it comes to something as precious as money. I hear that all the time. Exactly. So I think that aha moment was, okay, well, women and minorities do want to be a part of the system,

but they just don't, A, have a tool that feels approachable, but B, do not have the education to actually help them get into that system as well. And so I think the merger of those two is so powerful where you can actually have a tool that is getting you to avoid those gotchas. You don't have to worry. But it's doing all of the great things that credit can do for you. But also having that education as well and teaching you about how the system works, why it works a certain way, and making sure that you feel confident in the tool that you're using. So I guess I would say the credit confidence is almost as important as the actual credit building. Because you can have great credit and still not feel very confident. And by the way, vice versa, which is so, yeah, I think just the combination of the both, knowing how the system works and

actually being able to build credit and be a part of that system is really important. Yeah. Anything else you'd like to add or that I didn't touch on? I wanted to talk about the pink tax and the rewards. Yes, let's talk about that. When you say, first, for those of you who don't know, I'm sure you know, but what is the pink tax? And how does that, of course, affect women disproportionately when compared to how it affects men?

of course affect women disproportionately when compared to how it affects men. So essentially the pink tax is this absurd cost of womanhood, which basically makes everyday products and services cost more for women 42% of the time. I didn't realize it was that high. I thought it was 30. 42. Oh, God. And it actually comes out to on average about $1,350 a year. But that's more in traditional pink tax categories. And the emblem of this has become the razor. So if I'm a man and I'm getting a black or blue or whatever color razor, it's a certain amount. And for a woman, it's pink. And

now all of a sudden, it's 42% more expensive. But the other piece that I like to just clump into this pink tax conversation is the other hidden cost to being a woman. And so we're talking about credit, but also thinking through public transportation. And at night, I'm not going to feel comfortable taking the BART. I live in San Francisco. So I'm going, if it gets dark at five o'clock and I have to leave work at six, I'm not biking home. I don't have that option, right? I don't have the option of biking home to save money. I know. Yeah. So that, so I mean, caretaking is, is a other huge part of the conversation. The, you know, the gender wage gap is the other huge part of this conversation as well. Tampons being taxed as luxury goods?

That is such bullshit. Yes, exactly. The luxury tax on tampons, right? It's just, there's so much around this and not to mention healthcare, right? For women, it's just so much more throughout our lives. So there are all these hidden costs to being a woman, the pink tax being one of them. Yeah. So talk to me about the rewards program. Are you looking to combat the pink tax? How does this work? So I wanted Sequin to be a symbol of finding the patriarchy. Sure. And part of that is being able to pocket some of what the pink tax is. And so essentially, in terms of our rewards, I love airline lounge access as much as the next person. You can get that somewhere else. But with Sequin, we really wanted it to be relevant to women's lived experiences. And so we have a really simple cash back. There's no complex reward schemes. So you know what you're getting on every dollar you're spending.

The second piece is we actually have cash credits in pink tax categories. So if you use your Sequin card on a category that is pink tax, which is actually a lot of categories because unfortunately many categories are pink tax. Yeah. So starting with household goods, retail, beauty, charity, there's a whole list. Subscription services, a whole list. How is charity pink tax? I mean, women are contributing.

We're more charitable. Are more charitable. Right, sure. Right. So it's basically just any categories where women are spending more than men and then end up kind of being paying tax as well. So we give cash credits on that. And then the third piece, kind of on the theme of having a product that's very aspirational, I wanted this to feel like a product that meant where women's aspirations are, which are everywhere, right? Sky's the limit. And so on our product, we have partnerships with women-founded venture-backed companies.

And we offer perks and discounts on everything from mental health services to personal branding services. And so there really is kind of like this aspirational element to it as well. And then we have our… Self-development, it sounds like, too. Exactly. Yeah. Cool. And then also in terms of the education and some of the Sequin experiences, we do credit power hours where we talk about everything related to credit.

Like if you couple up, how do you think about credit? If you're about to start a business, how do you think about business credit? There's just so many conversations as well. And, of course, just having that community to chat with. So yeah, just combating some of these hidden costs and having a product that really stands for everything being like a woman is, which is everything. So I'm really excited about it. Well, I so appreciate you coming on and sharing your thoughts. Where can people find you? Where can people find Sequin? All of that good stuff. Yeah. So check us out on sequincard.com.

We are in waitlist mode, but we are opening it up really soon. And so folks to sign up will be the first to know. Amazing. And you can follow us on Instagram as well. It's sequin underscore card. Cool. Thank you so much again to Vrinda for joining us for this episode. We have linked tons of credit

resources, including more information on the Sequin card in our show notes. And if you're loving Financial Feminist, and if you got a lot out of this episode, make sure to share this podcast with your friends and family and leave us a review on your favorite podcasting platform. It only takes a few minutes, but if you subscribe and you rate, review, it's the best way to make sure that the mission of financial feminism is spread far and wide. Can't wait to see you next week, financial feminists. Talk to you soon. Thank you for listening to Financial Feminist, a Her First 100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields,

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