Are Credit Cards Inescapable?

By James Garvey, CEO of Self Financial

“Credit Cards have become an established and inescapable part of our society,” says a public file from New York University’s website, entitled The History of Credit Cards.

Over half of millennials would be the first to disagree with the above quote. Given the amount of controversy by financial advisors and credit card companies over the recently released figure by, which reveals that 6 out of 10 millennials do not own a credit card, it’s safe to say that 60% of millennials have escaped credit cards.

Daily Finance, a financial advisor website, has turned a substantial amount of its attention towards’s figure since it was released in early September 2014. Daily Finance has published articles such as 6 Out Of 10 Millennials Really Need To Get A Credit Card and Pssst, Millennials! When You Pay Choose Credit, Not Debit.

All of these articles urging millennials to use credit cards are apt to point out the benefits of a credit card (e.g. builds credit, emergency payments), but fails to mention the amount of credit card debt that each average household in the United States of America possesses.

In 2014, Nerdwallet released American Household Credit Card Debt Statistics: 2014 which reveals that “credit card debt is the third largest source of household indebtedness. Only the mortgage and student loan debt markets are larger.”

So, if millennials aren’t using credit cards to pay for purchases, then how can they build credit?

Three words: Credit Builder Loans.

Credit Builder Loans allow for people to take out a loan that they cannot use until it is paid off. Customers pay specified amounts each month over a specific amount of time, thus building their credit. Once the loan is paid off, then they receive it in full back to them.

Traditionally, credit builder loans have been offered by only Credit Unions and Banks, requiring people to have an account with either/or.

However, that is all changing.

In fact, one startup has created a way for people to pay for their credit builder loans without even having a bank account.

Financial disruption or opportunity?

Meet Self, a startup based in Austin, founded by James Garvey. Self is designed to help people establish credit without a credit card. Customers have the options to decide on how much they would like pay per month and for how long. After a customer’s specified Self plan is finished that person receives all of their money back in the form of a loan along with a credit score.

The service costs $3 per month to use, the minimum amount of money a customer can pay per month is $25, and the maximum amount is $250 per month. Customers can choose between three, six, nine, and twelve month plans.

In addition, if a customer does not have a bank account then they can make their monthly payments in cash at over 17,000 locations across America, or if the customer owns Bitcoin then they can use those to make their payments as well.

Self was one of the twenty-six startups invited to TechCrunch Disrupt Startup Battlefield in San Francisco in September 2014. Self received the runner-up Accenture’s Open Enterprise Innovation Disrupter Award.

About the Author

James Garvey is the co-founder and CEO of Self Financial, Inc.

Written on July 13, 2016

Self is a venture-backed startup that helps people build credit and savings.
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Disclaimer: Self is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.

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