I really enjoyed the recent conversation I had with Marla Blow who is not your typical credit card executive. She runs a start-up credit card company (FS Card, Inc.) focused on helping subprime customers get their “sea legs” to establish a positive credit history.  In a sense, she has been preparing for this role for her entire career. You will hear about her odyssey from modeling losses in credit card portfolios during  the Great Recession to signing on as an early team member at the Consumer Financial Protection Bureau (CFPB) and will learn how these experiences inform her work today. Enjoy!

Details:

• 0:00~1:37 – Introduction
• 1:37~4:02 – Early money issues
• 4:02~6:03 – Saving habits
• 6:03~10:56 – Career changes
• 10:45~12:48 – Experience at Capital One
• 12:48~ 14:45 – What is a “sub-prime” borrower?
• 14:45~18:28 – Initiatives at CFPB
• 18:28~21:24 – Credit card interest rates
• 21:24~23:41 – What does it mean to offer an “honest” product in the credit card space?
• 23:41~28:12 – How they choose who to lend to
• 28:12~33:38 – Alternative information they review to make credit decisions
• 30:48~33:38 – How loans changed
• 33:38~33:56 – A word from our sponsor, Next Gen Personal Finance
• 33:56~37:03 – Credit scores increasing
• 37:03~40:34 – Demographic of FS cardholders
• 40:34~45:30 – Income volatility and how it impacts large percentage of population
• 45:30~50:58 – Customer loyalty
• 50:58~54:12 – Teaching credit cards to young people
• 54:12~55:15 – Best thing purchased under $10
• 55:15~56:01 – Favorite columnist
• 56:01~56:50 – Favorite book
• 56:50~58:14 – Weekly text to young people
• 58:14~59:13 – Conclusion

Resources:

• Marla’s Company: FS Card
• Favorite columnist: Sendhil Mullainathan
• Favorite book: A Wrinkle in Time

Notable Quote:

“Many of our customers are extremely loyal. They think of us and see a company that helped them when everyone else rejected them. This is why we see a high number of interactions and a low number of attrition. We just need to create value for our customers.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.