The average American that carries credit cards usually has about 4 in their wallet. But a full 30% of Americans don’t carry a credit card at all! They just don’t have them.
Why? Well, in 2009, the Credit Card Accountability, Responsibility and Disclosure Act prohibited credit card companies from marketing to college students with no credit history. So it’s become far less convenient for younger people to get started creating a good credit history. And once they’re out of college, it takes a while for their FICO credit scores to rise, since one of the factors for a good credit score is age of their accounts.
Seeing that younger consumers were a little scared off of debt - not a bad thing - and that it was harder for them to establish credit - not a good thing - Charlie Youakim and Paul Paradis decided to create Sezzle, a company that offers an alternative way to pay.
Sezzle allows customers to finance their purchase at the point of sale, even if they’ve had issues in the past with credit. That’s because they don’t use their FICO score to evaluate them. Instead, they look at the monthly inflow and outflow from a customer’s bank statement. They use that information to determine if the customer can afford to pay off their purchase in a few installments.
One great thing - there is no interest charged on the purchase. The customer pays the purchase price divided by 4. The first 25% is paid at the time of purchase. The remaining 75% is paid over 3 installments, every 2 weeks.
Sounds like a win for the consumer, but a lose for Sezzle. How would they stay in business without charging interest?
Well, despite their loan-ish product, Sezzle is not actually considered a “lender”. That’s because they don’t charge interest, and they split the payment into just 4 installments. So not qualifying as a lender means they don’t have to have any banking partners or state lending licenses.
Instead, they charge the merchant (us) a slightly higher fee than a typical credit card merchant services account. We, as the merchant, care less about the fees we pay than we do about helping our customers get the product they need.
So we hope our addition of Sezzle will encourage you to find what you need to feed your newest addiction - your great skin!