Thoughts on Extra.App?

[JonoT]

Hey!

So we've been contacted by Extra.App to be a sponsor across all Linus Media Group. Our prelim talks and research seem to be very transparent in how they operate, which is a big bonus for us.

https://extra.app/

So what do they do? Well, they offer a way to help build or repair your credit rating with a debit card. (the US only for now)

 

How does it work? 

 

- build or repair credit with a debit card

- "spot" you the funds to make any purchase today but withdraw it from your bank account tomorrow
- app/service links up to your bank account and bases your spending power in buckets also your balance

- at the end of each month, they send your purchase + payment history to credit reporter (Equifax and Experian)

- the service is a monthly fee of $7 to $12 (based on the account type you want)
 

What they don't do:

- sell your information to 3rd parties or anyone

- offer credit card services (for the time being)

- operate outside of the US (for the time being)

- charge you interest on your purchases

 

Notes:

We have read through reviews, and while you could still get a credit card regardless of your credit rating as interest rates would be very high, this is an alternative for someone who doesn't want to worry about owing a monthly balance. 

 

We did bring up this post we saw on Reddit to them, and they assured us they have re-worked internal measures to make sure this doesn't happen a. Also, they've been speedy in responding to our messages and questions. 

Let us know if there's any questions you may have that we haven't thought off or just your initial impressions. 

[Ultraforce]

Only thing I would want to make sure get's mentioned in ad reads is that it's an USA only service. Since I remember, it took me a while, and it was disappointing to find out that Privacy's electronic credit cards were an American only thing and that there wasn't even really anything close to that in Canada.

[GhostRoadieBL]

Honestly, I don't understand the card. It's probably much more complicated but it sounds like a credit card and auto-withdrawals from your bank account as if it was a debit card but has a monthly service fee.

 

What I can't wrap my head around is what happens when they "spot you the funds...today" and you don't have the funds tomorrow? or does it just limit your spending power to the actual $ in your account like a debit card?

How does this company make money when they don't "charge you interest" and don't "sell your information" and give you points for "free" things? $12 a month is not enough to cover the company's leverage on potentially thousands of dollars a month per card holder.

 

I like the idea, just can't wrap my head around the numbers

[Skipple]

Interesting concept. I'm simply not understanding how this could affect your credit score without having... a line of credit? Are they issuing a line of credit and simply immediately paying off the balance directly after making the purchase? Very interesting.

 

They are owned by Evolve Bank & Trust, which I am unable to find any real information on. They appear to be a smaller sized bank but are a FDIC member and regulated by the FRB so.. ¯\_(ツ)_/¯

[JonoT]

1 hour ago, GhostRoadieBL said:

What I can't wrap my head around is what happens when they "spot you the funds...today" and you don't have the funds tomorrow? or does it just limit your spending power to the actual $ in your account like a debit card?

The one item I didn't explain too thoroughly is that when you sign up, they link up to your bank account and see your balance. Based on that, they create spending limits, or buckets is what they call it, which will prevent you from overspending through Extra or what you're able to pay back. 

 

1 hour ago, GhostRoadieBL said:

How does this company make money when they don't "charge you interest" and don't "sell your information" and give you points for "free" things? $12 a month is not enough to cover the company's leverage on potentially thousands of dollars a month per card holder.

From our conversation, that's how they're making money. Not all start-ups are profitable, heck look at Amazon's history! We are able to talk to their executives to get a clearer picture, but their key focus is growth, like any company.

1 hour ago, Skipple said:

Interesting concept. I'm simply not understanding how this could affect your credit score without having... a line of credit? Are they issuing a line of credit and simply immediately paying off the balance directly after making the purchase? Very interesting

Extra acts as a lender with its super quick loans. Since it makes it look like you pay it back almost immediately, they have a sort of credit history with you. They submit it every month, which in turn helps you repair/build your credit rating. 

Thanks for these excellent questions; it helps us and even highlights areas that need a thorough explanation for future spots.

[adarw]

curios about how much they charge

[Skipple]

2 minutes ago, adarw said:

curios about how much they charge

 

3 hours ago, JonoT said:

the service is a monthly fee of $7 to $12 (based on the account type you want)

 

[Skipple]

20 minutes ago, JonoT said:

Extra acts as a lender with its super quick loans. Since it makes it look like you pay it back almost immediately, they have a sort of credit history with you. They submit it every month, which in turn helps you repair/build your credit rating. 

If you could ask: With my rudimentary understanding of how credit scores are calculated, I understand that age of lines of credit is fairly important. Are they opening and immediately closing many lines of credit with each purchase, or is there a single line of credit that is constantly being payed off? If it's the former, does this type of 'quick loan' affect age of credit?

[JonoT]

3 minutes ago, Skipple said:

If you could ask: With my rudimentary understanding of how credit scores are calculated, I understand that age of lines of credit is fairly important. Are they opening and immediately closing many lines of credit with each purchase, or is there a single line of credit that is constantly being payed off? If it's the former, does this type of 'quick loan' affect age of credit?

Mostly credit lenders or credit score primarily is based on your history of being able to pay back loans. Since it's the next day it usually looks favorable as Extra takes the entire history and submits it to credit reporters at the end of each month. 

We'll ask about the age of the loans on our next meeting with them, you bring up some awesome points!

[Spotty]

4 hours ago, JonoT said:

- the service is a monthly fee of $7 to $12 (based on the account type you want)
 

What they don't do:

- sell your information to 3rd parties or anyone

- offer credit card services (for the time being)

- operate outside of the US (for the time being)

- charge you interest on your purchases

... So, how are they making money? How is their business venture sustainable in the short, medium, and long term?

Or are they just operating at a loss with the initial funding of venture capitalists in a "growth stage" hoping to build up a large customer base so that they can attract a higher price selling to a major lending company or when they go public? When a company like this sells out they're not selling the company, they're selling the customers.

 

1 hour ago, JonoT said:

The one item I didn't explain too thoroughly is that when you sign up, they link up to your bank account and see your balance. Based on that, they create spending limits, or buckets is what they call it, which will prevent you from overspending through Extra or what you're able to pay back.

Let's say I have $500 in my bank account.

I spend $500 through extra.app card, which provides me credit on that $500 purchase with the intention of charging my bank account the following day

Between the time I spend $500 on my extra.app card and being charged for the credit, I purchase $400 worth of other things through my bank debit card and only have $100 in my bank.

 

What happens then? There's no money in the account for extra.app to draw from. Does the bank account just go in to overdraft? Does the charge incur interest until it is paid? Fees?

 

With automatic deductions for bills it would be very easily for people to unintentionally double spend from their extra.app credit card and their normal bank account.

 

How is a 24 hour credit card any better than a regular credit card that doesn't charge interest if the outstanding balance is paid off before the end of the month? Why would you use this instead of just a regular credit card (which also has the benefit of acting as a credit card, for better or for worse) and paying off the balance the next day? If you're only using it for purchases that you can afford to pay off immediately then why not just use a traditional credit card and just pay it off, which would probably be better for your credit rating than this fake debit card anyway.

 

If you do decide to advertise this then don't call it a debit card. They are providing a 24 hour line of credit with the maximum available credit based on your current available bank balance. It's still a credit card. Just because it isn't on a monthly billing cycle or claims not to have interest rates doesn't mean it is not credit. Yes, I will admit that it might be better than a credit card in that it doesn't have a spending limit beyond what a person could theoretically pay off at any given moment, but that doesn't mean it is a debit card. Calling this a debit card is misleading and irresponsible.

[Spotty]

Quote

How does Extra work?

First, you connect your bank account with Extra.

After that, we give you a spending limit (Spend Power) based on your bank balance with no credit check. Generally, the more purchases you make with Extra the more your Spend Power will increase.

Every time you swipe your Extra card, we spot you for the purchase and automatically pay ourselves back the next business day.

Looking at their FAQ they're opaque about what it actually is. They avoid using the word "credit" or "loan" and instead say "We spot you the purchase" (aka credit!) and call it "Spend Power^TM" instead of "credit limit", even though they are referring to the same thing.

 

As far as I can see this is a company doing nothing but trying to rebrand "Credit card" to something else and using people's fear of bad credit ratings to market a credit card with a low spending limit and daily billing cycle as features.

 

I don't think this should ever be advertised as a debit card that improves your credit score. If you want to advertise it, advertise it as what it really is; a credit card with a low spending limit and daily billing cycle. Some people might see the appeal in that, though I think most people won't.

[Nayr438]

8 hours ago, JonoT said:

We have read through reviews, and while you could still get a credit card regardless of your credit rating as interest rates would be very high, this is an alternative for someone who doesn't want to worry about owing a monthly balance.

 

3 hours ago, Spotty said:

How is a 24 hour credit card any better than a regular credit card that doesn't charge interest if the outstanding balance is paid off before the end of the month? Why would you use this instead of just a regular credit card (which also has the benefit of acting as a credit card, for better or for worse) and paying off the balance the next day? If you're only using it for purchases that you can afford to pay off immediately then why not just use a traditional credit card and just pay it off, which would probably be better for your credit rating than this fake debit card anyway.

My significant other would disagree. She has been denied countless times for having a insufficient Credit History. Kind of hard to build Credit when no one will give you the initial Credit. I could also see this helpful for Credit Recovery, something which I am personally going through, due to a unexpected long term job loss. Having alternatives to help build initial credit or help in rebuilding credit is a big plus in my opinion.

[Spotty]

2 minutes ago, Nayr438 said:

My significant other would disagree. She has been denied countless times for having a insufficient Credit History. Kind of hard to build Credit when no one will give you the initial Credit. I could also see this helpful for Credit Recovery, something which I am personally going through, due to a unexpected long term job loss. Having alternatives to help build initial credit or help in rebuilding credit is a big plus in my opinion.

If somebody has a really poor credit rating and is unable to get a traditional credit card then I can see how a credit card with no credit checks, a low credit limit, and automatically deducts the outstanding balance from your bank account each day might be something that person is willing to consider if they're trying to use a credit card to increase their credit rating... But I still don't think it should ever be marketed as a debit card that will improve your credit rating. See:

3 hours ago, Spotty said:

I don't think this should ever be advertised as a debit card that improves your credit score. If you want to advertise it, advertise it as what it really is; a credit card with a low spending limit and daily billing cycle. Some people might see the appeal in that, though I think most people won't.

 

There's also no guarantee that this will help your credit rating even if used as intended. It might work for some but it definitely won't work for everybody. For some people just signing up to this might even drop their credit rating (a comment in the reddit thread linked to in the OP said their rating dropped after they signed up). If someone uses this credit card and their credit rating doesn't improve, do they get their $7/month refunded?

 

I'm not entirely sure how it works in USA, but people might be better off contacting the credit agencies and requesting your credit report (they may charge a trivial fee for it) and checking to make sure there aren't any errors in it, double listings, incorrect amounts, loans that you did actually pay off in time, etc. Getting any errors removed would likely be much better for your credit rating than applying for a credit card. Also knowing why your credit score is bad might help you work towards improving it and avoid having a bad credit rating in the future. For example if your credit history is bad because you've applied for and been rejected from a dozen credit cards in the past 6 months then it probably isn't a good idea to apply for any more credit cards for a while (I don't actually know if that affects your credit rating but just using it as an example).

 

I'd honestly prefer it if LMG didn't advertise financial services/credit lenders at all, especially not to their largely younger audience. "Does your credit score suck? Well that doesn't matter because this Totally Not Credit Card^TM can help clear your bad credit history" is a bad message to send teenagers.

[Arika]

I've worked in a financial institution for the last 12 years, these kind of "businesses" always make me very uneasy, i'm not sure if that's because i've seen what debt "rescuers" can do to people, or if it's because the whole concept of how you build credit in NA is just so backwards to me (australian).

 

Te fact that they have no fees related directly to the card, is personally a massive red flag. these companies don't exist to help our of the goodness of their heart. a $7 monthly fee per person is not sustainable at ALL.

 

Something that immediately caught my eye was this:

https://s3.extra.app/legal/Extra Cardholder Agreement_Jul_7_2021.pdf

Quote

VIII.       Obligation for Negative Balances
Each time you initiate a Card transaction, you authorize Extra to reduce the funds available in your Funding Source by the
amount of the transaction and all associated fees. You are not allowed to exceed the available amount in your Funding Source through
an individual transaction or a series of transactions (creating a “negative balance”). Nevertheless, if any transactions cause the balance
3in your Funding Source to go negative, including any purchase transactions where the retailer or merchant does not request
authorization, you shall remain fully liable to us for the amount of any negative balance and any corresponding transaction fees. You
may also be liable for any related Insufficient Funds/NSF Fee(s) as set forth in Exhibit 1. We reserve the right to bill you for any negative
balance or to recoup such negative balance from any other Card we have issued to you. You agree to pay us promptly for the negative
balance and any related fees. We also reserve the right to cancel your Card if you create one or more negative balances with your Card.
If you fail to pay us amounts owed under this Agreement, we may refer your Funding Source and collection of amounts owed to a
collection agency.

However in their fee table on the same document, there is no reference to any NSF fee. This is a pretty big oversight and makes me worry about what the NSF fee actually is. $5? $15? $100?

 

at MINIMUM this needs to be clarified with Extra and must have this fee added to their fees and charges document that is publicly accessible.

Exhibit 1 is on page 10 in the above linked document.

[Nayr438]

50 minutes ago, Spotty said:

I'm not entirely sure how it works in USA, but people might be better off contacting the credit agencies and requesting your credit report (they may charge a trivial fee for it) and checking to make sure there aren't any errors in it, double listings, incorrect amounts, loans that you did actually pay off in time, etc. Getting any errors removed would likely be much better for your credit rating than applying for a credit card. Also knowing why your credit score is bad might help you work towards improving it and avoid having a bad credit rating in the future. For example if your credit history is bad because you've applied for and been rejected from a dozen credit cards in the past 6 months then it probably isn't a good idea to apply for any more credit cards for a while (I don't actually know if that affects your credit rating but just using it as an example).

The problem with the first instance is that she just doesn't have any sort of Credit History whatsoever. Options that were available when I started, are no longer accessible options now. The main option she was given was to have someone cosign something with her to get started, but she doesn't have anyone to aid in that. In my case, it's just a matter of being unprepared for the unexpected and that's something I just have to deal with.

 

50 minutes ago, Spotty said:

I'd honestly prefer it if LMG didn't advertise financial services/credit lenders at all, especially not to their largely younger audience. "Does your credit score suck? Well that doesn't matter because this Totally Not Credit Card^TM can help clear your bad credit history" is a bad message to send teenagers.

In a time where many places require a Credit Check just to rent a apartment or house, advertising it as a way to initially start your credit is something I could get behind. In terms of younger teens, I believe you need to be 18 to even open any sort of credit line or bank account without a legal guardian.

I however wouldn't advertise it as a way of magically fixing Credit problems, or as a Magical Debit Card which is how it seems to be presented on there website.

Edited February 16, 2022 by Nayr438

[Middcore]

Every time I hear of something like this, I figure that a lot of people who make poor financial decisions will just end up finding a way to use it to make things worse for themselves. Purely an off the cuff impression. 

[AbydosOne]

I used a similar service (but not targeted at credit restoration) for a while called Debitize. It was actually pretty nice, IMO, and nothing shady happened. TBH I wasn't in a bad place financially at the time, so it didn't make much difference, but I saw it as the best of both worlds: always know exactly how much money I had and could get credit card rewards that debit cards don't offer. (I understand their card probably wouldn't have benefits/rewards.)

 

3 hours ago, Arika S said:

Te fact that they have no fees related directly to the card, is personally a massive red flag. these companies don't exist to help our of the goodness of their heart. a $7 monthly fee per person is not sustainable at ALL.

8 hours ago, Spotty said:

... So, how are they making money? How is their business venture sustainable in the short, medium, and long term?

One of the theories I read about Debitize was that, because they paid the bill at then end of every month, they were holding the money they withdrew during the month+ period between charge and payment and could use it to generate interest. AFAIK that was never implemented in the short time Debitize existed (was bought, not folded), but seems like a reasonable idea to me (in a "if you don't mind someone profiting from your money" kind of way, which really isn't different from a normal bank, and you get a service for it).

 

[JonoT]

9 hours ago, Spotty said:

Let's say I have $500 in my bank account.

I spend $500 through extra.app card, which provides me credit on that $500 purchase with the intention of charging my bank account the following day

Between the time I spend $500 on my extra.app card and being charged for the credit, I purchase $400 worth of other things through my bank debit card and only have $100 in my bank.

This is one of the things I asked but they explained this is how it works

Once they see that you only have $X amount of money they put you in a specific spending bucket that is a % based of your balance. So for example for your $500 they allow 10% of it to be spent per month or day (we asked this last night to clarify since do they continually look at your balance and readjust). This prevents you from making more purchases beyond your ability to pay it back.

We did ask further clarification on how they fix issues if your balance is lower than what your spending limit and not able to pay it back. Akrika highlighted in the next couple of posts about NSF fees, it's something we also asked. 

 

5 hours ago, Spotty said:

I'd honestly prefer it if LMG didn't advertise financial services/credit lenders at all, especially not to their largely younger audience. "Does your credit score suck? Well that doesn't matter because this Totally Not Credit Card^TM can help clear your bad credit history" is a bad message to send teenagers.

This is something I too was worried about, but we're still working on the messaging they want and how we want to highlight the sponsor message. 

8 hours ago, Spotty said:

I don't think this should ever be advertised as a debit card that improves your credit score. If you want to advertise it, advertise it as what it really is; a credit card with a low spending limit and daily billing cycle. Some people might see the appeal in that, though I think most people won't.

Very good point. I believe technically it is a debit card but we'll be very transparent how we position it if we choose to continue forward with the partnership.

 

45 minutes ago, AbydosOne said:

I used a similar service (but not targeted at credit restoration) for a while called Debitize. It was actually pretty nice, IMO, and nothing shady happened. TBH I wasn't in a bad place financially at the time, so it didn't make much difference, but I saw it as the best of both worlds: always know exactly how much money I had and could get credit card rewards that debit cards don't offer. (I understand their card probably wouldn't have benefits/rewards.)

Interesting, thanks for the feedback!

[wanderingfool2]

I agree with Spotty, I would like seeing LMG not go towards this kind of advertising (no matter how transparent they are it still seems sketchy to me).  Sponsored by banks would be barely okay but anything involving credit cards or loans I don't feel comfortable with (on any youtube channel I watch).

 

There are a few things that stand out to me though:

- The starting fee of $7/month...without really clarifying without signing up what the other more expensive plans might cover

- It weirds me out that they have the rolling "5 stars" kind of reviews

 

The bits that I am always curious of, that is never mentioned when it comes to credit card companies is what do they charge the merchants?  And policies involving merchants.

Like how @Spotty was asking regarding how they make money at the monthly fee.  My guess to that is they likely make it up from the merchants. (That 1% back they give you...well they could potentially be charging the merchant 3-5% the cost or have a fixed price per transaction plus the 1% fee).  That is the number I would like to know, how much does the merchant end up paying.

 

It's why I am against the advertisement of credit cards that give you "cash back %" kind of rewards.  It only ends up hurting smaller businesses and in general the consumers without them knowing (Nothing is worse than having a large CC payment disputed and failing the dispute process, despite having a signed contract, initials next to the pricing and rental agreement, only to have the payment dispute resolved in the customers favor.  Overall the prices needed to increase to cover incidents like that and just to cover the extra % that was eaten up on each transaction)

 

So yea, if it were myself, I would ask what their policies are in regards to the merchants.  Such as, what is the average percentage charged to the merchant who accepts the credit card.  When there is a refund, do they still charge the merchant a fee?  If so, what is the average fee.

 

I get that it's more about transparency to the customer side of things, but honestly with credit card companies I think it's equally important regarding the details about how they are treating merchants. [As I'd be amazed if people knew how much some businesses effectively get held hostage by credit card fees]

[Jtalk4456]

10 hours ago, JonoT said:

This is something I too was worried about, but we're still working on the messaging they want and how we want to highlight the sponsor message. 

While some are concerned with the sketchy aspect, I have more trouble with you guys offering financial services in general, reliable or not. This channel is about tech, and the sponsors are tech related, so it all works together and feels more natural that way. I trust you guys to know about remote management software since you work in tech so I trust you when you say pulseway is good. With something like this, I have no reason to take your word because you guys don't deal in financial services. This is unfamiliar territory to you on a professional level and gives me no confidence in the brand. 

That aside, I would avoid these companies on a value standpoint alone. Credit is just a measure of how good you are at managing debt. Debt is bad by definition. Good credit is not a good goal in general. People should work to be debt free and pay in cash for things. Consumer debt is a massive issue here in the states. Promoting a system that is known for keeping people in poverty is not a good look. I realize not many people are this hard on credit cards (part of the problem IMHO), but it's really ruining a lot of people's lives. If you want some more info, I'd recommend listening to some of Dave Ramsey's videos on it. credit scores are entirely unnecessary and are detrimental to a large portion of the population. A lot of people don't care enough about it and will tout whatever financial services company offers because they pay well, but since you had the foresight to ask our thoughts, I hope I can help steer you away from things like this. It's very disingenuous to pretend to be helping people's finances by pulling them further into the credit system. And that disingenuousness falls back to you for promoting it. 
Edit for some more context:
https://cdn.ramseysolutions.net/media/company/pr/everyday-millionaires-research/National-Study-of-Millionaires.pdf?_gl=1*1psa2f3*_ga*Njk0OTI3MDI4LjE2NDUwNjc0MzE.*_ga_02SXDH1H96*MTY0NTA2NzQzMC4xLjEuMTY0NTA2NzQ0OC40Mg..&_ga=2.243046410.985323173.1645067431-694927028.1645067431
Ramsey did a survey of over 10,000 millionaires and found almost 75% have never carried any credit card balances. They focus on staying out of debt and saving money instead.

[Ultraforce]

2 hours ago, Jtalk4456 said:

While some are concerned with the sketchy aspect, I have more trouble with you guys offering financial services in general, reliable or not. This channel is about tech, and the sponsors are tech related, so it all works together and feels more natural that way. I trust you guys to know about remote management software since you work in tech so I trust you when you say pulseway is good. With something like this, I have no reason to take your word because you guys don't deal in financial services. This is unfamiliar territory to you on a professional level and gives me no confidence in the brand.

Just one thing haven't both LMG the organization and Linus himself talked about why looking for sponsors outside the tech space is something that is done as a way of helping to minimize chance of a conflict of interest? Of course in the case of LMG because of LTTStore some other normal safe sponsors might be a bit harder since while not completly a direct competitor with selling their own underwear they compete in a sense with Mack Weldon and what not.

So at least personally, albeit I'm someone whose only been watching videos on the channel since November I think it's fine and probably even good to seek sponsors outside of tech focused. Such as the various wallet brands or KiwiCo.

But I don't really know enough about credit cards or financial stuff to say anything other than that I really think it would be nice to note when something you are advertising is explicitly USA only to mention it in the ad read.

[Needfuldoer]

What happens if you get caught in a 'negative balance' situation and can't immediately pay it back?

 

What do they report to the credit bureaus as your "credit limit" for credit utilization (the main metric they're flaunting for "building credit")?

 

Since this card just gets tied to a checking account anyway, why not just get a debit card from the bank holding the checking account? There's usually no credit check required because charges to the debit card are immediately paid out of the checking account. You just don't get the 24 hour buffer "Extra" is offering.

 

I'm sorry, this just sounds like a potential debt trap, just like title and payday loans.

[Needfuldoer]

36 minutes ago, James Evens said:

1. Either you pay for the account a monthly fee or at least need to have some creditably to get the free ones. In Germany the fees widely wary. Personally I use a free bank account which comes with a credit card just as credit card so no cost there for me with the benefit of it being debit based. But other institutes/banks are in a similar price range to extra. At my local bank it would cost me everything included 10€ per month for an account and credit card.

2. Connivance. Not having to deal with multiple accounts/balances for daily use (or just forgetting to top up the deposit on the debit card) might be a benefit for some folks.

1: You likely have to pay a fee anyway because you need a checking account to tie the Extra card to. (Some banks waive the fee if you get weekly direct deposits or there's a certain amount of activity on the account. Even the bank everyone loves to hate, Bank of America, does this.) 

 

This card isn't available in Germany, or even Canada. They only offer it in the US, and it only works inside the US. Here, we have banks and credit unions. I use a credit union, they don't charge anything just to have an account, credit card, or debit card. It's not uncommon to have multiple checking accounts; I do this to keep services like PayPal isolated.

 

2: I don't see how this card doesn't complicate things, because a bank debit card is tied directly to the checking account. Extra's 24 hour revolving line of credit means it's possible you can overdraft the checking account it's tied to by charging things to the card and spending the checking account down lower than that amount "behind Extra's back". If you're only using the card for petty cash transactions like lunch it's unlikely to happen, but if large recurring bills like rent, auto loans, and utilities also draw from that same checking account, or you transfer money to a different bank account, it could be a problem.

 

If you're running on a low balance, adding an obfuscation layer is playing with fire. It's too easy to fall into a trap of thinking "it's okay, I just have to make sure this other check clears into my account before tomorrow". Given LMG's viewership demographics must skew toward teens and twenty-somethings who are only getting into real-world finances, I don't know if this is the right lesson to be teaching them.

[Nayr438]

2 hours ago, Needfuldoer said:

What happens if you get caught in a 'negative balance' situation and can't immediately pay it back?

Quote

you shall remain fully liable to us for the amount of any negative balance and any corresponding transaction fees. You
may also be liable for any related Insufficient Funds/NSF Fee(s) as set forth in Exhibit 1. We reserve the right to bill you for any negative
balance or to recoup such negative balance from any other Card we have issued to you. You agree to pay us promptly for the negative
balance and any related fees. We also reserve the right to cancel your Card if you create one or more negative balances with your Card.

Looks like they may be pretty quick to tack on a NSF Fee and possibly Terminate the account. The Fee is something they are looking into according to above. Given it's a 24 hour cycle, I personally don't see any issue with this, if you can't manage your money for 24 hours, then you probably need to rethink what your doing.

 

1 hour ago, Needfuldoer said:

2: I don't see how this card doesn't complicate things, because a bank debit card is tied directly to the checking account. Extra's 24 hour revolving line of credit means it's possible you can overdraft the checking account it's tied to by charging things to the card and spending the checking account down lower than that amount "behind Extra's back". If you're only using the card for petty cash transactions like lunch it's unlikely to happen, but if large recurring bills like rent, auto loans, and utilities also draw from that same checking account, or you transfer money to a different bank account, it could be a problem.

 

If you're running on a low balance, adding an obfuscation layer is playing with fire. It's too easy to fall into a trap of thinking "it's okay, I just have to make sure this other check clears into my account before tomorrow".

If your tight on money you really need to stop and ask yourself, is $100 in Groceries worth enough to potentially sacrifice your Credit, or is that box of $2 Ramen, that you probably have enough change laying around for enough to get you by for a couple days. If they need/want the benefits of a potential short term "emergency" funds solution they should work on building Credit to get an actual Credit Card.

 

2 hours ago, Needfuldoer said:

Since this card just gets tied to a checking account anyway, why not just get a debit card from the bank holding the checking account? There's usually no credit check required because charges to the debit card are immediately paid out of the checking account. You just don't get the 24 hour buffer "Extra" is offering.

Because a Debit card doesn't help build credit.

 

1 hour ago, Needfuldoer said:

This card isn't available in Germany, or even Canada. They only offer it in the US, and it only works inside the US. Here, we have banks and credit unions. I use a credit union, they don't charge anything just to have an account, credit card, or debit card. It's not uncommon to have multiple checking accounts; I do this to keep services like PayPal isolated.

 

Me and my significant other also Bank at a Credit Union and while there are no fees, neither one of us qualifies for any sort of Credit from them, either do to insufficient credit history or bad credit.

 

1 hour ago, Needfuldoer said:

Given LMG's viewership demographics must skew toward teens and twenty-somethings who are only getting into real-world finances, I don't know if this is the right lesson to be teaching them.

The point of the card is to help people build Credit, not extend there ability to pay expenses. Given how widely used your Credit Report is, it's something that at least people in the U.S. should start working on early in life.

 

Just to throw this out there, I'm not in any way pro credit, I think the whole system is heavily flawed and works against people, at least in the U.S.. Based on my experience however, for better or worse it's slowly started becoming a large part of life. I have had my Credit Check for Rental Agreements, Utility Agreements, Insurance, Medical Payment Plans, and of course Loans.

[IkeaGnome]

One thing I also don't like is that fees for international purchases aren't listed. Being charged for using the card isn't the full story to international fees.

It says no fees, but how are the exchange rates done? Is that through the card, or the bank?