Pros
- There are no credit requirements
- Connects to existing bank accounts
- Autopay offers lower interest rates than other credit cards
Cons
- Multiple fees could apply
- It is possible that a security deposit will be required
- Credit limits are relatively low
- Not available on Android
The Grain App
Grain allows you to borrow money to pay for your day-to-day needs using only your debit card and checking account. Grain is an alternative to credit cards and was created to improve credit scores. Your cash flow will determine how much you can borrow. The app allows you to transfer the money to your checking account and spend it as you would normally. You then have to pay it back each month at the end.
Avoid interest by paying your statement in full before the due date. Your credit score will improve if you pay your full monthly statement balance.
You can access the service by downloading the Grain app from Apple’s App Store. The service is not available for Android at the moment.
No credit score
Credit cards often require excellent credit. Those with lower credit scores might face higher interest rates. Grain does not require you to have a minimum credit score or base your offers on your credit history. Through the app, you can increase your credit score over time by making timely payments.
Lower interest rate than many credit cards
Grain charges a flat 15% APR if you use Autopay. This is applied to balances after a 21-day grace period following your payment is due. Federal Reserve data shows that this rate is lower than the average credit-card interest rate of 16.27%, as of August 2022. Credit cards with higher interest rates would be more attractive to those with poor credit or little credit history.
Multiple fees may be applicable
Grain may have several fees. You will need to pay a $56.25 to $75 sign-up fee and then a monthly service charge based on your credit limit. A 1% fee is charged every time you access your credit card line. Avoid late payments. Grain charges 5% (or $5) for each credit line. This can adversely impact your credit score.
An in-depth look at the Grain App personal loan
- Very low credit limits. Your cash flow will determine how much credit you are offered. However, the current maximum credit limit is $1,000. After six months of using the app, you may be eligible to increase your credit limit.
- You may need to make a security deposit. You may be required to deposit a certain amount of cash before you can get a line. Grain does not disclose the amount of this deposit on its website.
- Higher interest without autopay. If you make all payments manually, you will be charged 17.99% APR.
- Credits are quickly deposited in your bank account. Grain states that the money will appear in your bank account immediately after you use your credit card. However, it could take up to one day.
Who’s the Grain App good for?
People with poor credit or short credit histories may find the Grain app a great option. Grain doesn’t require minimum credit scores, so you may be able to access a line credit through this app even if your credit score isn’t high enough elsewhere.
People with a steady income may find Grain a good option. Grain’s credit line is based on your cash flow or how often and reliably you are paid.
How to Apply with Grain
You will need to download Grain from the App Store for your Apple iPhone or iPad in order to get started. Next, connect your primary checking to the service. You should use the checking account that you receive your paychecks from and makes most of your regular payments. Grain will use your history with your checking account to make you a credit proposal. The process takes only a few minutes. You may need to make a security deposit at this point.
If you accept credit offers and are approved, the app will allow you to access the money. Tap the “Credit” tab and choose a amount. This money will be transferred to your checking account.
Are you unsure if the Grain App is right for your needs? These are some alternatives.
- Chime : Chime is a good alternative to a checking account. Chime offers a free checking account, the option to overdraft up $200, and a credit-building loan option.
- Dave The Dave app lets you get up to $500 in advance on your paycheck without interest.