Zerocard aims to reduce overspending

Financial technology company Zero announced on Tuesday, July 30, the public launch of Zerocard, a credit card offering a “debit experience” issued by WebBank and backed by Mastercard.

Zerocard is a credit card, but it offers a “debit style experience” and 1% to 3% cash back rewards for cardholders. You must have a Zero checking account to qualify for the credit card, allowing you to use the unique debit style feature. The card gives you all the benefits of a traditional credit card: access to a line of credit, cash back program and the opportunity to build credit, while encouraging you to spend within your means thanks to the function of debit.

This debit feature can be turned on and off at any time through the Zero app. When this feature is enabled, the credit limit on your Zerocard is equal to the amount in your Zero checking account: a checking account balance of $ 100 gives you a credit limit of $ 100. This is similar to a secured card, which generally requires a cash deposit of $ 200 that becomes your line of credit.

This feature also includes automatic payment, which automatically deducts the Zerocard balance from your Zero checking account on the expiration date. Zerocard holders also have the option to disable the debit style feature and simply use the card like a traditional credit card. When the debit style feature is disabled, Zerocard works similar to a credit card with no preset spending limit, although that does not mean unlimited credit.

You can also maintain a month-to-month balance when you choose not to participate in the debit experience; however, there is a variable APR of 24.99%, so it is important to pay your bill on time and in full. Whether you choose to have the debit style feature enabled or disabled is up to you, although Galen says that the majority (90%) of cardholders enable the debit style feature during onboarding.

You always know where you are and you’re not very tempted to overspend,” says Galen. Zerocard is available in four tiers: Quartz, Graphite, Magnesium and Carbon, each with an increasing percentage of cash back on purchases.  and your “current position” which is your Daily Zero check balance minus your Zerocard balance For example, if you have $ 500 in checking account and a balance of $ 200 on your Zerocard.