Nu Mexico, a digital finance firm serving nearly 75 million customers throughout Latin America, has unveiled a novel credit card that aims to allow Mexicans to build or repair their credit history and secure access to credit.
The Nu Guaranteed Card affords customers the opportunity to make credit payments online or at any physical establishment, including paying for subscriptions. It also allows users to pay in installments and access interest-free promotions. The card allows customers to establish a credit history with both credit bureaus, which could allow them to access more extensive lines of pre-approved credit in the future.
The Nu Guaranteed Card is now entering its Beta phase and will gradually become available to customers, allowing them to share their experiences and provide feedback during the co-creation process. To use the product, individuals need only to set aside funds from their Nu Account, which will serve as a backup for the Guaranteed Card. The amount serves as the available purchase credit limit and is kept on hold until the customer pays their monthly balance. The card allows customers to withdraw any unused portion of the loan, a unique feature among similar offerings in the market that gives customers flexibility and autonomy to manage their money.
Nu Mexico seeks to be a gateway for those who never had access to credit or have experienced financial difficulties. By assisting them in establishing a healthy credit history, Nu aims to allow them to unlock higher credit limits, while promoting sound financial habits.
Recent Nu Mexico product launches include: Caixinhas, which enables personalized and organized money-saving; NuTap, which allows small businesses and entrepreneurs to take card payments without a point of service (POS) machine; and NuPay, an integrated e-commerce payment solution.
According to the National Financial Inclusion Survey, only 11% of Mexicans have access to a bank credit card and 19% are denied loans due to a lack of credit history, while 36% have a negative credit bureau rating. Nu Mexico's proprietary algorithm Aki approves about 40% of customers who would have been rejected using traditional credit scoring methods. However, due to limited data to feed the risk model, Nu Mexico must still reject roughly 60-70% of credit card applications.
Nu Mexico is launching this product in phases. During the beta phase, Nu Mexico will invite customers on its waiting list to obtain their "Tarjeta de Crédito Moradita" (Purple Credit Card) and participate in the co-creation process. The Nu Guaranteed Card will gradually become available to the rest of the Mexican market. "We always ensure we follow a co-creation process with our customers when launching any of our products. For Nu, it is vital to build products based on their feedback, so we can ensure they meet the genuine financial requirements of people in Mexico," says Miguel Ludlow, Product Leader, Nu Mexico.