The news: US Bank launched two new secured card products that are tied to existing programs, per CNBC.
What it means: US Bank can use its rewards-centric secured cards to compete for customers who have limited or poor credit histories.
Unlike many secured cards available on the market, US Bank’s new products offer rewards—a top feature US consumers value in credit cards. This can help US Bank stand out to potential cardholders with lower credit scores and compete for this demographic against Discover, whose Discover it Secured card is positioned as the top secured product for beginner cardholders, according to NerdWallet.
The opportunity: US Bank can use the new cards to launch customers into its ecosystem and as a way to branch out its services.
The bigger picture: In the last year, issuers have tried to attract a broader range of customers, particularly those with no or subprime credit history. This has taken the form of new government-backed credit access initiatives and lower qualification barriers.
US Bank is taking a different approach to financial inclusion by offering an attractive rewards solution that lets customers improve their credit and access other financial services—creating customers who might have a high lifetime potential value and can serve overall revenue ambitions.
Go deeper: Check out the Credit Access segment in our “Credit Cards in the ‘Next Normal’” report to read more about secured credit cards and other tactics issuers are using to improve financial inclusion.