LendingClub: America Does Not Need Another Credit Card, Apple Card Spells Disaster for Consumers

Apple Card, a “new kind of credit card” launched by Apple (NASDAQ:AAPL) in partnership with Goldman Sachs (NYSE:GS) is expected to be made available to the public within the next few days. In fact, it has been reported that invitation emails have already gone out to a small group of iPhone owners. More will follow during August.

The tie-up with Goldman Sachs is made more interesting due to Goldman’s fast-growing digital bank Marcus. The challenger bank started life as a consumer online lender. Marcus has since pushed into other banking services with additional features in the works.

Pitched as a more secure, feature-rich type of credit card, one that gives cashback daily on purchases, most observers expect the Apple Card to be a hit out of the gate. The affiliation with Apple, and its enormous installed user base and iPhone integration, virtually assures wide adoption of the Apple Card. 

But not everyone is enthusiastic about Apple’s deeper push into Fintech and some have criticized the high-interest rates users may pay to access the credit.

One detractor is LendingClub (NYSE:LC), an online lending platform that has long touted its ability to lower consumer debt by providing access to low-cost loans; mainly utilized for debt consolidation of high-cost credit cards which some consumers struggle to manage.

In fact, on the low-end, LendingClub is currently offering rates of 6.95% to borrowers. According to the most recent card users agreement published last week, Apple Card users can hope to pay at best an interest rate of 13.24%. Almost double of what some customers may access on LendingClub, depending on your credit score.

Crowdfund Insider recently spoke with Anuj Nayar, Financial Health Officer at LendingClub, and he told us why the Apple Card “spells disaster for consumers across the U.S.”

You said that launching a credit card refinancing product and then a credit card two years later is equivalent to building a fire station and then going into the woods with a flamethrower. Please explain?

Anuj Nayar: Americans don’t need another credit card. They need the right tools to help them build their financial futures and pay down debt without the opportunity to accumulate more at high-interest rates. Goldman Sachs tried to pursue building a helpful consumer tool with Marcus but now has slipped back into its old ways, looking to make money by getting consumers hooked on revolving, high-interest debt on Apple’s credit card.

[easy-tweet tweet=”Goldman Sachs tried to pursue building a helpful consumer tool with Marcus but now has slipped back into its old ways #Fintech” template=”light”]

Isn’t household debt, as a percentage of GDP, down considerably versus a decade ago? Doesn’t this indicate better financial management?

Anuj Nayar: We still can’t overlook the fact that credit card debt levels have surpassed $1 trillion this year — higher than credit card debt levels were a decade ago. We also know that American’s appetite for credit cards is only increasing, and that will have a huge impact on the financial future of consumers that are already struggling.

Today, one in five Americans aren’t saving for retirement at all, and more than half of Americans are living paycheck to paycheck. Revolving credit card debt will make it impossible for these Americans to get back on a path to financial health and begin saving for their future.

In addition, for the first time in a decade and since the financial crisis in 2008, the Fed cut interest rates by a quarter-point, saying they were taking the action to prepare the U.S. economy for a global slowdown. As we prepare for a recession, this means that households carrying debt will likely grow, and consumers will struggle to make their payments.

The Apple Card will incorporate features to assist users to better manage their finances. Isn’t that a better type of card than more traditional offerings?

Anuj Nayar: While it’s to be expected that the Apple Card may incorporate features that will help users manage their finances — like spend tracking and budgeting, purchase notifications, and payment tracking, features that already exist across personal finance mobile apps — at the end of the day, it’s still a credit card.

And credit cards profit off of revolving debt. Traditional credit cards may not have these offerings, but ultimately they’re the same, with more or fewer bells and whistles.

Do you expect Marcus to promote debt consolidation within the Apple Card ecosystem?

Anuj Nayar:  Absolutely. It makes sense for Goldman Sachs to want to make the most of their partnership with Apple and keep their hands on consumer debt.

With $1.03 trillion in total revolving debt in the United States and the average for balance-carrying households coming in at $9,333, Americans need products and solutions that put them on the path to financial health — not ones that make it easier for them to continue to accumulate debt.

[easy-tweet tweet=”Goldman Sachs expected to leverage Apple Card to offer consumer loans #Fintech” template=”light”]

Why doesn’t LendingClub offer credit card for your users? Isn’t this just another type of loan where LC can coach consumers on how to better manage their finances?

Anuj Nayar: Two of the key differences between a personal loan and a credit card is first that you start paying off the principal with your first payment versus just the accrued interest with a credit card and secondly that you have a fixed time period to pay it off versus revolving.

For the time being, we are focused on innovating to help individuals manage their credit card debt and put them back on a path to financial health.

In comparison to the competition, do you expect Apple Card to be a success?

Anuj Nayar: The Apple Card is definitely an interesting idea, and I look forward to seeing the features they incorporate to help adopters manage their finances, and how it impacts consumer credit card debt.

[easy-tweet tweet=”LendingClub: America Does Not Need Another Credit Card, Apple Card Spells Disaster for Consumers” template=”light”]

Naya Coin Partners with Lean In Los Angeles & K5 Ventures on “Positive Impact Currency”

Naya Coin  HelpNaya Coin, a positive impact currency, is launching to help organizations incentivize social issues. The digital currency may be awarded to for verified employee volunteer work and used to purchase unique services from the App’s marketplace.  Naya Coin states its objective to help organizations create “pop-up” movements to incentivize their employees and their audience so they may join as a group to accomplish a shared goal.

Once time has been fulfilled and verified, volunteers are rewarded for their efforts in digital currency Naya Coin, which can then be exchanged for professional services and unique experiences on the Naya Marketplace. Coins are paid per hour, and the rate is set by the nonprofit. The digital currency can be spent on items such as IP law work from a lawyer, startup advice from local VCs, and private dining by famous local chefs.Milad Moh

“We’re building a positive impact currency that helps each community fight poverty and social inequality within itself, by empowering non-profit organizations” said Naya co-founder and CEO, Milad Moh. “Our new Movements feature enables influencers and companies to rally their network to achieve a certain milestone along causes related to poverty and social inequality, by partnering with non-profit organizations.”

naya coin exampleThe Naya Coin app, available on iOS, has already been driving initiatives in Los Angeles to help female founders get their technology businesses off the ground. The company is working in partnership with non-profit Lean In Los Angeles and K5 Ventures, a network of more than 3,000 female entrepreneurs, to connect professional volunteers, like engineers, designers, and startup veterans with the female-founded startups in the Lean in Los Angeles network .

The first Naya Movement to benefit, Lean In LA, crafted a campaign aimed to direct entrepreneurial resources to one of its members, Samantha Dickinson – the founder of startup WineKey. Dickinson created a campaign outlining her startup’s needs and, over the course of 10 days, 150 hours of professional expertise and hands-on help was pledged and the campaign overachieved its original goal.

Nay Coin differs from rewards/donations based crowdfunding platforms as organizations raise time and action – instead of money.  The contributed services generate Naya Coin for the contributors which may be deemed in the Marketplace.Max Siskin

“Social responsibility is easy to talk about about, but hard to get results from and we aim to change that with Naya Coin. Companies will finally have a tool to help their employees support causes and meet their company objectives,” added Max Siskin, cofounder of Naya.

Most established companies have a commitment to social corporate responsibility.  Enterprises are now able to engage and incentivize their employees to help support designated causes and projects.

Siskin and Moh see Naya Coin as a tool for different communities to fight poverty and social inequality – more effectively.


PayPal Partners with SETI to Crowdfund, Powered by FundRazr

Dubbed Crowdfunding’s Final Frontier – Crowdfund Anything Anywhere Site FundRazr Powers PayPal Galactic Site.

The crowdfunding innovators at FundRazrSETI Crowdfunding are are powering PayPal Galactic’s partnership with SETI Institute to crowdfund life on earth, and search for ET (extraterrestrial) life beyond it. SETI’s Curiosity Movement crowdfunding campaign strives to change the way scientific research is funded and completed. FundRazr’s crowdfunding platform, with the mantra “Crowdfund Anything, Anywhere”, is making this unique partnership and the exploration of these new frontiers possible.

FundrazrPayPal today announced the launch of PayPal Galactic, a project that brings together leaders in the scientific community, including the SETI Institute and Space Tourism Society, to prepare and support the future of space commerce.

 “We are very proud to make it easier for earthlings to donate and support space sciences while receiving some very cool perks,” says FundRazr CEO and founder, Daryl Hatton. “PayPal Galactic and SETI’s Curiosity Movement are discovering the potential of the universe. With FundRazr’s new social funding technology contribution, the next groundbreaking SETI project could fund and result in groundbreaking discoveries beyond our world.”

This rewards based initiative  will offer perks like:We're everwhere on Earth

  • First Contact Alert – Be one of the first people on earth to be notified when SETI makes contact
  • Voyager Message Plaque – A copy of the ET greeting message sent on Voyager autographed by Carl Sagan collaborator Frank Drake
  • Guided Tour of Allen Telescope Array – Live the life of Jody Foster’s character, hang with scientists and explore that first contact
  • Limited edition SETI swag – Fly a Flag of Earth to show “We are all Earthlings” or nab a special edition Galactic T-shirt or poster

SETIPowered By FundRazr, the new technology behind Curiosity Movement, is an innovative CFaaST (Crowdfunding as a Service Technology) solution. Organizations, like SETI, can easily plug-in FundRazr’s applications to run crowdfunding campaigns directly from their site, get them noticed and funded.

 “We are launching a crowdfunding campaign powered by FundRazr to support SETI Institute’s endeavors to educate the public and further its mission to improve the understanding of life on Earth, and the search for life beyond it,” PayPal’s Anuj Nayar, Senior Director of Communications and Social Media, stated.

SETI Institute, the Search for Extraterrestrial Intelligence, is a non-profit research organization that has been dedicated to expanding the knowledge of the universe and the search for intelligent life beyond planet Earth for about 30 years.

The private organization has a unique mission to pursue evidence of life in the universe as an exploratory science. Some of the world’s most advanced scientific endeavors are supported by the SETI Institute’s innovative team, such as, astrobiology and radio astronomical research with the Allen Telescope Array. Support the SETI Institute and the science of space could change our world, and the galaxy we live in forever.

The launch of PayPal Galactic is in conjunction with the celebration of PayPal’s 15th anniversary. Founded in 1998, the company has since grown its service of a faster, safer way to pay and get paid online to more than 128 million active accounts in 193 markets.