The Credit Card Industry has been shrouded in mystery…until now

Have you ever applied for a credit card and been denied with no idea why?

Surprise! It might be the patriarchy, again!

We wish we were kidding, but the credit card industry is yet another example of how centering men in the conversation leads to negative outcomes for women. Today’s guest is shining a light on the inner workings of this industry to help women get better credit and reap the benefits.

Vrinda Gupta is a former Visa Credit Expert who was denied for the very card she had a hand in creating. As a result, she made it her mission to help women better understand how the credit card industry works and eventually went on to build her own company, Sequin.

This episode is so informative, especially if you’re trying to make sure you get the most out of your credit card experience and are aiming to build your credit score. Make sure to check out our previous Financial Feminist episode on Credit Scores and see all of our credit card recommendations!

P.s. If you’re struggling with budgeting, check out the Badass Budget Spreadsheet –– a user-friendly, plug-and-play budgeting spreadsheet to help you take back control by keeping better track of your finances.

Watch the promo:

About Vrinda:

Vrinda Gupta, CEO & Co-Founder of Sequin, is a globally recognized credit expert on a mission to address gender inequities in credit. After spending five years at Visa Inc. building popular credit cards, including the Chase Sapphire Reserve, Vrinda was rejected from the very card she helped launch. Determined to demystify credit cards for the over 70% of women who are not engaging with credit optimally today, Vrinda launched Sequin – a debit card and credit-builder with rewards that pay back the Pink Tax in categories where women spend – alongside Y Combinator, IDEO, and other top investors. Sequin is supported by angel investors at the forefront of their industries, including Carrie Schwab-Pomerantz (President of the Charles Schwab Foundation), Kevin Weil (Former Head of Product at Instagram), and Deb Liu (CEO at Ancestry.com) – with over 90% identifying as women. Vrinda holds an M.B.A from Berkeley Haas and a B.A. from UCLA. She is a proud first-generation Indian immigrant and lives in San Francisco.

Vrinda’s Links:

Get the Sequin Rewards Card

Website

Instagram

Twitter

Resources:

Our HYSA Partner Recommendation (terms apply)

Credit Card Recommendations

Build Your Credit Score Blog

Beginner’s Guide to Credit Cards

Debt Defeater Course

Badass Budget Spreadsheet

Transcript:

Tori (00:00:01):

Hello, Financial Feminists. Welcome back. Happy to see you. We’re talking all things credit cards today with a former VISA credit expert, and a fellow female founder and CEO. Now, if credit cards feel a little scary to you, and you heard me intro this episode, and you’re already like, “Nope, I’m out.” You’re not alone, I invite you to stay.

Tori (00:00:21):

If you have come from a Dave Ramsey background, if you have come from a background that has said that debt is bad, that credit cards are bad, here’s the deal, you’re an adult, and I’m going to treat you like an adult. Credit cards are not the devil. Credit cards are not evil. In fact, they’re a really great tool if you use them responsibly. And whether we like it or not, credit scores, specifically, but also credit cards, are a necessary part of our life, a necessary part of our finances. And we need to learn how to use them responsibly, as well as any pitfalls that we’re currently falling into.

Tori (00:00:54):

So we talked all about credit scores last season, how to increase your score, what makes up a credit score. So, if you haven’t listened to that episode, it’s episode 7. Please go back. Listen to that one first. It’ll give you a really good baseline in order to listen and fully absorb today’s episode.

Tori (00:01:11):

I’ve talked about it before, and I mentioned it again in the episode today, that I actually don’t even own a debit card. I never have. My parents don’t own debit cards, I pay all of my bills, and I spend exclusively on a credit card. Here’s what that does for me. One, it’s secure. Credit card companies have some of the best fraudulent protection available, and it’s easy to report if I believe a purchase has been double charged, or if I think my credit card got stolen.

Tori (00:01:40):

I also reap the benefits of all of these cards. So whether that’s reward points, free miles, cashback, I get all of those points possible because I’m putting everything, every purchase I have on a credit card. I also love using the travel specific credit cards for perks like lounge access at airports, free upgrades on flights, sometimes even free flights.

Tori (00:02:04):

The third thing is that using a credit card helps me build my credit score, which yes, unfortunately, you actually do need one of those in order to function in society. We have all of our credit card recommendations linked in our show notes. And we’ll talk again about how to use your credit card responsibly as we go throughout this episode. The education most of us get on credit is lacking. You’ve probably heard some myths like you have to keep a balance to have a good score, which is not true.

Tori (00:02:31):

And today’s guest is here to demystify the credit industry and to help you make smarter choices with your money. Now I want to state something very clearly, I’ve already said it a couple of times in this intro, but we are talking about credit cards as a tool. And like every tool in your toolbox, you have to use it smart, you have to use it correctly in order for it to work well. And to keep yourself from getting hurt. I kind of think of it like a knife, right? A knife can cut you. It can also make you a yummy veggie stir fry, and credit cards we want to make a CMA veggie stir fry. The metaphor doesn’t fully track
guys, it just stay with me.

Tori (00:03:08):

Before you begin using credit cards, or if you’re currently paying down credit card debt, I need you to do a few things first. One, you need to have an emergency fund of at least 3 months and high yield savings account. The last thing I want for you to do is to dive into debt when you lose your job or your water heater goes out or you get a flat tire, right?

Tori (00:03:27):

The second thing is you need to have a budget. It can be a spreadsheets, shameless plug. We have a great one called Badass Budget that is pre automated for you to plug and play link on our show notes, or even an app on your phone. But you need to know how much is coming and going each month so you can know exactly how much you can spend on your credit card without going into debt. We have more about emergency funds, more about setting up budgets, more about financial goals on episode 5 called the financial game plan. Again, we have all these resources for you. Please go back and listen to that one.

Tori (00:03:58):

As a special bonus for financial feminists listeners, get 10% off the Badass Budget spreadsheet with the code F F budget, that’s F F budget. You can learn more about this and other personal finance tools and courses at herfirst100k.com/products, again, linked in the show note. You should only be using credit cards if you can pay off the entire balance every single month. You need to be making on time and in full payments, meaning that you’re not allowing the date to go by without submitting a credit card payment and you’re also not just paying the minimum balance, you’re paying the full balance.

Tori (00:04:34):

Back to the episode. Vrinda Gupta is the CEO of Sequin a debit card and credit builder with rewards that pay back the pink tax in categories where women spend. She’s a globally recognized credit expert with experience building credit cards at visa and has an MBA from UC Berkeley School of Business. Vrinda lives in San Francisco, California and as a proud first generation Indian immigrant. Today’s episode is incredibly informative. You’re going to learn the ins and outs of the credit card industry, and how women like Vrinda are turning this traditional patriarchal stronghold into a system that benefits women enjoy.

Tori (00:05:20):

I would love for you to tell me kind of your story about being especially one of the people who built the Chase Sapphire rewards card, and then you got rejected for it. So even before then, like, what was your journey in your career to getting to that point?

Vrinda Gupta (00:05:36):

Yeah. So as quick background, I started my career at Visa. And even before that, my family and I are first generation immigrants, and I grew up watching my mom, who is my superhero, and I don’t feel like she’s afraid of anything. But the 1 piece was always a financial system. And so growing up, I would watch her rely on my dad, and just in this one area. And so to me, it became very important to understand the financial system, and especially credit in the US.

Vrinda Gupta (00:06:10):

And you know, my mom’s view was always, “There a lot of gotchas, you can get into debt, you can make one mistake and that can carry on throughout your life. And she’s not wrong. And so when I decided to think about what I wanted to do after I graduated, going into financial services was a lot more than just a job, it was a way to empower myself in the system in a way to really help my mom as well. And so, started off at visa, worked on the credit cards team for a few years and built a very popular product called the Chase Sapphire Reserve.

Tori (00:06:48):

I remember.

Vrinda Gupta (00:06:49):

Yes, that is the card that I was the main pm for on the Visa side. And it was a really exciting project to work on something like that, where it blew up immediately. And I think for the first time, we really saw young people being catered to and things being thought of differently. And, of course, I like everyone else wanted that product. And I wanted to start off building my credit, I wanted to get a product that could give me travel rewards. And it really was this kind of symbol of financial independence for me. And I applied for the card, and I got rejected when I was at work in an open for the-

Tori (00:07:31):

You applied for a card that you built and then were rejected. Did they give you a reason behind that rejection?

Vrinda Gupta (00:07:35):

That’s the worst part of it, right? When you get rejected all you see, it’s this instant rejection. Two weeks later in the mail, you got this kind of generic, letter that says, “Well, it could be one of these four reasons.” And later on, I learned, it was because my debt to income ratio, which now I understand what that means. But at that point, I had no idea, right?
I was a new grad, I was just getting on my feet. And I think the piece that I felt the worst about was that credit felt like a very important test, and no one had taught me how to study for it. And so when I applied, and I got rejected, I said, “Had I known I would have been building my credit, and I just didn’t.” And ultimately, what I realized was that I had been spending primarily on a debit card. And I’ve been spending on my dad’s credit card, which I thought was building my credit, but it really was building his credit more effectively than mine.

Vrinda Gupta (00:08:34):

And so even though I had a high income, the credit decisioners don’t really take that into account. And so I applied, I lacked credit history, and I got rejected. And so that was kind of the beginning of me starting to think about credit and the industry for the first time. And just realizing that if this was something that was impacting me, as someone who is actually building these products and writing the rules for these products, what was happening to so many other people, and that led me down a long rabbit hole of now realizing that the system truly was not designed to center women, but really anyone outside of this prototypical heteronormative-

Tori (00:09:12):

Cisgender white male.

Vrinda Gupta (00:09:12):

Exactly.

Tori (00:09:14):

So you said the words debt to income ratio. Can you explain for my listeners what that means?

Vrinda Gupta (00:09:18):

Absolutely. So your debt to income ratio is basically how much a creditor is willing to give you in relation to your income. And so essentially, at that point, in addition to my income, I hadn’t built up credit. And so the amount of debt that an issuer was willing to give me was not proportionate to the amount that they were willing to.

Tori (00:09:42):

Because they’re basically kind of placing, not a bet, but they’re saying like, “Hey, we’re trying to figure out how responsible you are, right? And the likelihood that you will pay something back. So they’re coming up with kind of this arbitrary number. And you can tell me if it’s not so arbitrary, but like seemingly arbitrary number of how much they’re willing to bet on you or how much the flexibility they’re willing to give you. And so it sounds like, for you, it was less about your income or how much salary you were making and more the fact that you had not built credit up to that point.

Vrinda Gupta (00:10:15):

Absolutely. Yes, that’s right. And, ultimately, it does come out to this number, which is your credit score, right? But there’s so much more to it than meets the eye. So I’m excited to talk about all of that. But it really is this black box that credit affects every aspect of your life. And every single goal that we have as people, as women, as whoever is usually tied to a financial goal. That is usually tied to credit. Yep. And so, what I always like to say is your credit score is the only grade that matters after you graduate because-

Tori (00:10:48):

I say it’s your adulting GPA.

Vrinda Gupta (00:10:50):

Exactly, I love that. Because you need credit for literally everything and even things you don’t think about, sometimes if you go to apply for a job, your employer actually might pull your credit.

Tori (00:11:02):

Which is some bullshit in my opinion.

Vrinda Gupta (00:11:04):

Exactly. I don’t know, maybe that’s a conversation we’ll get into today.

Tori (00:11:09):

We should.

Vrinda Gupta (00:11:09):

So credit is central to everything.

Tori (00:11:14):

You need to have it to rent, trying to buy a house, buying a car or opening a credit card.

Vrinda Gupta (00:11:17):

Absolutely. Anytime you need a loan, anytime you need to borrow something, your credit score, credit history is going to come into that. And so making sure that you’re good, gives you the options in life to be able to pursue whatever huge goals that you have for yourself.

Tori (00:11:35):

In previous interviews you’ve mentioned, and of course, it’s obvious once you do a second of digging, that the credit card industry caters to men, specifically cisgendered, straight white men, right? And that there’s so much implicit bias kind of baked into this industry. I just want to talk more about that. So when you were creating cards for Visa, what things were you considering to like entice high earners into applying for these cards? And then was it kind of just left unsaid that these millennials that you were trying to entice were just men, right? They were just straight white men.

Vrinda Gupta (00:12:15):

So the way that we were thinking about building out the Chase Sapphire Reserve was a product that was similar to the success of the AMEX Platinum, but with a little bit more around a young urban millennial lifestyle, and the idea-

Tori (00:12:31):

A little more accessible.

Vrinda Gupta (00:12:32):

Exactly, and slightly more accessible. And so the idea was that we could actually create this kind of black card centurion card experience for a younger population, and that actually would have, the lounge access that we all like, right? What one thing that’s really interesting about the Chase Sapphire Reserve is that the value actually doesn’t necessarily come from the cashback rewards, right? It comes a lot from the different perks and the benefits. And so, really creating this card that felt aspirational and really elevated you as this young professional traveler was the idea behind it. And actually, a fun fact is, even everything was meant to feel very aspirational and premium. So even the weight of the card.

Tori (00:13:25):

Yes, that was the first weighted card I’d ever gotten. So for those of you who don’t know with credit cards, typically, it’s just plastic, right? You’re going to have plastic with some numbers on the card. But with the Reserve, that was the first card, and then I now have the AMEX platinum, but that was the first card where it actually like you set it down on the table to pay, and you hear an audible like, literally, and it makes you feel powerful. And you’re like, “Oh, my gosh. Who am I? This is the height of luxury.” I imagine 100% of course, a decision that was very intentional.

Vrinda Gupta (00:13:59):

Absolutely. So we actually, in the Visa rules that I helped write, we would say the weight that it needed to be and the types of material that it would be. And it was actually interesting, because this is a travel card, and so it would sometimes beep in the metal detectors. So during our tests, we would have to make sure that the metal that we use wasn’t beeping in a metal detector.

Tori (00:14:20):

Shit you don’t think about.

Vrinda Gupta (00:14:21):

Exactly. So it was a really interesting experience. And I think the important distinction to make with women in credit and the industry was up until 1974-

Tori (00:14:34):

You could not have a credit card in your own name.

Vrinda Gupta (00:14:35):

Exactly. Women could be rejected from a credit card without a male co-signer and for business loans that was until 1988, which I was thought of to be in this world at that point. And so, since then after 1974, RBG’s work with the ACLU made it illegal to say if women then. However, what we’re seeing with the credit industry today Is that because the system truly was never designed to center women, or let’s just say-

Tori (00:15:06):

Any marginalized group?

Vrinda Gupta (00:15:07):

Exactly, any marginalized group. The downstream impacts are there. You think about end to end. You think about credit scoring and how that reflects systemic bias, which is a whole conversation. You also think about the way that advertising is working is that banks are advertising to men 13 times more than their advertising to the rest of these groups.

Tori (00:15:30):

Which can I pause you there? So they’re advertising 30% more to men?

Vrinda Gupta (00:15:34):

13 times more.

Tori (00:15:36):

13 times? But women hold the majority of the buying power?

Vrinda Gupta (00:15:39):

Exactly. And I’m sure you know the stat. But by the end of this decade, women are slated to hold 75% of discretionary spend.

Tori (00:15:47):

So is that because they’re not stupid people, obviously, that are running these. So where’s the disconnect? Is it the bias? Is it the bias? Is it the expectation that the man in a heteronormative relationship is owning the financial decisions? What? I’m sure it’s an onion layered problem. You start peeling back the onion layers, but what do you see as the disconnect there?

Vrinda Gupta (00:16:10):

So there are multiple pieces, I think the first one is that men traditionally are the financial or have been the decision makers at the household. And so what we see actually is that women are twice as likely to be authorized users on a parent or on a partner’s card. And so it’s these men that are getting the products, whether that is because they actually can qualify for them. Or it’s because-

Tori (00:16:35):

They’re the ones actually being marketed to.

Vrinda Gupta (00:16:37):

Exactly, so there’s so much around that. And then women end up being the ones making the purchasing decisions, but as these authorized users, which brings the problem full circle, where women are actually building credit for their male counterparts and earning rewards for their male counterparts. So that’s the second piece is kind of this marketing understanding issue.

Vrinda Gupta (00:16:56):

The third piece is education, one of the things that we saw was that women are half as likely to have received an education on credit by the time they reach high school. And we all know that we’re not taught about credit in school, we don’t know where to learn about it. And so there’s this education gap that never really closes. So that’s the third piece of this onion layer is that if you don’t know the rules of the game, you don’t want to play. So that’s kind of the third piece.

Vrinda Gupta (00:17:25):

And the last piece is actually the rewards. They are much more catered towards where men are spending most of the time. So if you look at these travel, rewards cards, that, again, I was building at Visa, they are rewarding where these male dominated categories like dining, like travel, and again, I love to travel as much as the other person, but what we’re seeing is that women are spending significantly more in fundamentally different categories like retail, household goods, pharmacies, beauty, all of those categories. We’re spending a lot and then that’s not being rewarded on traditional products today. So it’s kind of this slew of marketing, education, legacy, rewards, and it turns into this kind of just whole system that truly does not center a population that to your point, holds the spending power in this country. What has been really inspirational for me is seeing young women who are coming into the workforce at greater rates than ever before, and having incomes higher than ever before, and really-

Tori (00:18:37):

more college educated.

Vrinda Gupta (00:18:38):

Exactly. And really saying that, we want to know, and we don’t want those things to be true. So I think the intention is there. And of course, everything that you’re doing here proves that. This group of financial feminists who are just like, “I want to know, and I want to be able to play. I want to learn the rules.” And so I think the industry hasn’t really caught up with that in creating products and services that are actually centering women. And I think a lot of that is also because the financial services industry is so male dominated. You don’t see as many women as we would like to that look like you and me. So there’s so much work to be done, but I think we are on an upward swing.

Tori (00:19:22):

And the stat that I think about all the time, which is the one you cited of like credit card couldn’t have one in your own name until 1974. My mom was born in 1962. She was in middle school by that time. It’s not that long ago that there was this huge gap. And yet, we wonder, “Why aren’t women able to take advantage of these things? And why aren’t women able to build credit?” And then we remember all of these statistics. Basically, yesterday, women didn’t have the opportunity to do any of these things.

Vrinda Gupta (00:19:52):

Exactly. There was actually an interesting interview that I heard from Hillary Clinton, and she was saying that even after this law was passed, she still experienced discrimination when it came to getting a credit card. And they had asked her to have Bill as a co-signer, and she said-

Tori (00:20:10):

Can you imagine?

Vrinda Gupta (00:20:10):

“I make more money than him.”

Tori (00:20:16):

“Do you know who I am?”

Vrinda Gupta (00:20:16):

I know. I know. Yes, there is a certain thing as laws being passed. But I think history time and time again, has showed that that’s not enough. There needs to be so much more that needs to be done.

Tori (00:20:29):

So I’m writing my first book, and I’m doing a whole chapter on debt. And a huge portion of that is around credit cards, especially. And from the research we’ve done, we know that actually, the number one reason women get into debt is they simply don’t understand how a loan works. So in very basic terms, can you describe the process of signing up for a credit card, putting a purchase on the credit card, and hypothetically, the different payment options for paying that balance back?

Vrinda Gupta (00:21:02):

Absolutely. So let’s start off with the application process. So you go, you figure out you want this product, you apply for it, and they’ll ask you for some information. You’ll share that information and you get a decision pretty quick. What’s interesting is in the background, there’s a lot going on. So we call them credit issuers. That could be your bank that’s giving you your credit card, that can be a landlord that’s giving your home. It could be a loan for thing. And so, what they’ll take into account is, first of all, your credit score, but also each of these different credit issuers have their own secret sauce that they put into it. And so, some issuers might want to know what actually is your income. And they’ll have you submit a pay statement.

Vrinda Gupta (00:21:54):

Other issuers, there’s new types of ways to think about underwriting is what they call this process. So, a lot goes into that, and then they decide, “Yes or no? Do I want to extend this person credit?”. And if yes, “What terms do I want to extend it on? So what interest rate do I want to give them?” If you are riskier, they’ll give you a higher interest rate. What is the minimum payment that you need to pay at the end of each month?

Tori (00:22:23):

When they say riskier? What factors or criteria are going into designating somebody as risky?

Vrinda Gupta (00:22:31):

So at the highest level, the way I think about how credit scoring is created, is thinking about if you would lend money to a friend. And so there are different factors that go into credit scoring. And so one of them is your length of credit. Have you had credit products before? And this is a question that you would probably ask your friend, it’s, “Hey, have you done something like this before?” So your length of credit, and also whether that credit was in your own name, or in someone else’s name, were you primarily in charge of paying that back? That’s a huge piece of what goes into it.

Vrinda Gupta (00:23:10):

The second piece is if you had credit, how were you using it? Were you paying credit back on time when paying it back in full? And so you want those answers to be? “Yes.” And so the more you’re doing that, the better someone is to lend you something.

Vrinda Gupta (00:23:29):

The third, which is kind of an interesting concept is this credit utilization concept. And essentially, what credit utilization is, is it is the percentage of your total credit line that you’re using. And so really simply, let’s say your credit line is $1,000, you use $100 of it, you’ve used 10%. And what issuers want to see is that you’re actually using a very small percentage of your credit possible. And what’s wild is that you want to have your credit utilization be below 30% at all times. But actually, that’s just to keep you out of the red zone. So if you’re above 30%, then that’s actually actively a red flag that can take your credit. So what we would always say is keep your credit below 10%, 5%, every single day of the month.

Vrinda Gupta (00:24:23):

Because what I’ve heard is, people will come to me and say, “Well, I pay my card off in full at the end of the month, so I sho
uld be fine.” And the challenge with that is that your credit might be reported to credit bureaus at some random day in the month that you do not even know of. And so even if you’re paying in full at the end of the month, at that point in time, if your credit utilization is 35%, 50%, that’s going to be docked against you. And so you want to keep your credit utilization really low.

Vrinda Gupta (00:24:57):

There are other factors, smaller ones like, are you seeking credit a lot? So that’s called, “Do you have a lot of hard pulls?” If you’re looking for your credit score on your own, you should do that as much as possible. That’s a soft pull, and that’s not going to affect your credit. But with the hard pull, which is basically, if you’re actually applying for credit, and your credit is being used to determine whether or not you should be given a loan or not, that credit card issuers don’t want to see that you’re seeking a bunch of different types of credit all at once, because that possibly is a sign of distress. And all of these factors kind of have their own biases baked into them. So I’m not going to talk about that. But I will just talk about the fact that this is how it is done today. So those are some of the top factors they’re going to look into, which is, “Have you been building credit? If you had credit before? If you have credit, how are you using it? Are you paying it back on time? Are you paying it back in full? How’s your credit utilization? And are you seeking a bunch of credit or not?” So, all of those things go into it.

Tori (00:25:56):

So we have a credit episode as part of season 1, and literally reviewed everything you just said. And we’ve seen, I’ve seen it both in my credit. And also one of the recommendations I give is, if you can ask for a credit line increase and then don’t use it. So we’ve seen a bunch of community members go out and get credit line increases and then see their credit scores go up. Because again, that utilization rate is smaller. So I think I’m at like, 3.3% utilization which I love, and I haven’t checked it recently, last time I checked. So we’ve applied for the credit card. Let’s say we’ve gotten accepted due to these factors. I have gone and bought a $100 sweater from TJ Maxx. I don’t know why TJ Maxx are selling $100 sweater. I don’t know, I bought a sweater and it’s 100 bucks, and I put it on the card. What happens now?

Vrinda Gupta (00:26:44):

So there are different payment options that your credit issuer is going to give you in the 10, 20 page document that you get in a bunch of legalese. So to-

Tori (00:26:58):

It looks like it’s written in German.

Vrinda Gupta (00:26:59):

Exactly. So to break it down, you have multiple options. One option is to pay the minimum fee, which we do a fun, myth versus fact, quiz on our end, but essentially, that I hear a lot from many women disproportionately-

Tori (00:27:19):

Credit balance that increases your credit score.

Vrinda Gupta (00:27:21):

Exactly. I don’t know who spread that myth.

Tori (00:27:23):

I have the not so conspiracy theory that it’s credit card companies, because they keep you in debt.

Vrinda Gupta (00:27:30):

That’s how they make money. And there’s actually a slight tangent, but there is a study that I read that when credit cards were first invented in the ’50s. They actually worked with behavioral economists to say, “Well, we’re making a lot of interest on people, what’s a way to make more interest?” And they actually did studies that said, if you show someone the minimum payment, or whether they should pay in full, or some other option, they will always default to the minimum payment.

Vrinda Gupta (00:27:59):

So anyway, these folks are smart. But we’re going to be smarter here. So do not pay just the minimum. And what I always say is, unless you really, really have to carry a balance, credit card debt is some of the most expensive money you will ever borrow. So even if you’re in a situation where you can’t pay the full amount, for whatever reason, pay as much as you can, above that minimum, anything that you can just pay it there. So anyway, so that’s one option is you could pay the minimum. Do not recommend that option.

Tori (00:28:29):

And let’s say in this hypothetical example, our due dates, the 15th. So if I, this $100 sweater send in $25. Let’s say that’s the minimum payment by the 15th. What does that mean for now the 16th of the month?

Vrinda Gupta (00:28:42):

So, for the 16th, you are still owing the other $85. An
d that $85 is compounding in interest. Yeah. And essentially, compounding interest is this evil concept that-

Tori (00:28:59):

Unless it’s working for you, if you’re investing, compound interest is great. But if you’re in debt, compound interest is bad.

Vrinda Gupta (00:29:04):

Absolutely. Very, very bad with a capital. Because you’re accruing interest on your interest. And it adds up so quickly.

Tori (00:29:15):

So fast.

Vrinda Gupta (00:29:15):

And it’s really, really challenging to get out of. That’s a whole other conversation is being in debt and paying that off, but that takes your credit as well. And it goes back to the utilization factor that really affects. So, the minimum payment is an option. You can pay some other amount that is between the minimum and in full, or you can pay in full, which is kind of the ideal way to be using these credit products is you use them like a debit card. You’re paying on credit, you’re earning whatever perks, whatever rewards, you’re building credit, but you’re not getting into any of those nasty gotchas that my mom always warned me about.

Tori (00:29:58):

If you don’t pay anything, what happens?

Vrinda Gupta (00:30:01):

So there are various things that can happen to you. You’ll get hit with late fees. And actually, that’s kind of the best case scenario.

Tori (00:30:09):

And you’re getting an interest, right? So it’s interest plus the late fee.

Vrinda Gupta (00:30:12):

Exactly, exactly. So interest plus the late fee. And then what happens is 30, 60, 90 days later, depending on what your issuer decides, they’re going to start reporting you delinquent to credit bureaus. And getting a delinquency show up on your credit report is some of the hardest pieces to remedy because it stays on your report at least for seven years. And it makes debt and borrowing anytime so expensive for you. And those rates just really don’t go down. So once you do that once, I think a black spot is the best way to describe it.

Tori (00:30:52):

So when you’re thinking about using credit cards responsibly, I often compare them to a knife where I’m like, “Knives are great, because they can cut vegetables, right? And if used properly, they’re a great tool. They can also of course, cut you, right? So in responsible credit card usage. For me, it’s always pay it on time and in full. If you can’t, same thing, pay as much as you can. And it’s also why I advise saving an emergency fund first. So you don’t hopefully have to go into credit card debt. What other responsible ways can we use credit cards? Or what does it look like to be a responsible credit card user?

Vrinda Gupta (00:31:28):

It’s really not rocket science. It’s pay it off on time and in full, and keep your credit utilization as low as possible. The rule of thumb that I always say is, if you pay your card off every Friday, you should be in the clear of having your utilization below the good threshold.

Tori (00:31:50):

I send my monthly payment in for the full balance, I think the day before it’s due. I know there’s some benefit to paying loans off twice a month as opposed to just once a month. Do credit cards work like that as well, where if you’re paying them more frequently, that’s a better idea or a better option?

Vrinda Gupta (00:32:13):

Yes. But the reason is not that you’re paying it off more frequently. The reason is that it keeps your utilization low.

Tori (00:32:20):

Got it.

Vrinda Gupta (00:32:21):

So it all comes back to credit utilization. So I always say pay it off every Friday, if you can. If you have a big purchase, just pay off that purchase immediately after. So that doesn’t affect your credit utilization. And actually, we’ve done studies where we’ve had women reduce their credit utilization and pay their card off every Friday, and their credit scores increased 20 points on average in a week. And one woman’s score went up 118 points. So it’s
super effective. And actually, it’s very relevant for this audience is credit utilization disproportionately affects women. Because we are getting lower credit lines for many reasons, we lack credit history, we don’t know. And so even if we are spending the same amount as a man, our credit utilization looks artificially inflated. And so even-

Tori (00:33:14):

Because our credit line isn’t as high.

Vrinda Gupta (00:33:15):

Exactly.

Tori (00:33:16):

So, instead of the $1,000 credit line now have a $500 credit line, but you’re spending the same amount of money.

Vrinda Gupta (00:33:23):

Exactly. So especially, for, again, any group that this industry was not built for making sure to keep your credit utilization low is one of the greatest hacks and that’s really going to skyrocket your credit score almost overnight.

Tori (00:33:37):

That’s amazing. In my research, and just it’s pretty obvious, again, once you start doing any sort of thinking about this, but most credit card companies, they seem to play this kind of gotcha marketing. Where they don’t want you to know how interest works in order to make money. Because if you don’t know how a loan works, or when you’re charged interest or how you’re charged interest, of course, like we said before, that means more money for these companies. How are you working to combat that?

Vrinda Gupta (00:34:03):

So I guess we can dive into our products. So essentially, so we are building a product called Sequin. And essentially what Sequin is, is it is a debit card and credit builder that builds credit more effectively for women and earns rewards that pay back the pink tax. And essentially, the reason that I wanted to build this in the first place was I had been building these popular credit cards like the Chase Sapphire Reserve, I got rejected and-

Tori (00:34:38):

Every time you say it, it shouldn’t, I guess, be as surprising, unfortunately, as it is. But it’s just like, you built the game and then you’re like, “I lost.” How?

Vrinda Gupta (00:34:51):

I know. I know. I know. And so, I looked around and I saw just so many smart and ambitious women and saying that statistically, we are better to lend to and we are holding the spending power. And actually I saw stat and Visa data that 70% of women are spending on non credit building tools, and that is leading.

Tori (00:35:12):

So debit cards, cash.

Vrinda Gupta (00:35:14):

And credit cards on other people’s names. And that was leading to us having these negative credit experiences, like getting rejected, like getting lower credit lines, higher interest rates.

Tori (00:35:24):

Because if you’re a lender, you’re saying, “I’m going to give you this thing because I trust that you can, quote unquote, handle it. But if you have not established that you can handle it, even if you’re like, “I can do this to your point of like, I have the income, I can do this.” But if you haven’t proven that to the system, yet, it doesn’t know.

Vrinda Gupta (00:35:40):

Exactly. So I had no idea how to start building credit, because credit is a chicken and egg game that you need credit in order to build credit. So I left visa, just thinking that this was wrong, I didn’t feel like the industry was keeping up with where women were going in society, which is everywhere. And so, decided to build this product, essentially, the way that Sequin works is it is a debit card, and also a line of credit. And so when you sign up for Sequin, you’re signing up for two things, and the line of credit becomes available via the debit card. So when you’re actually using this product, it works exactly like your debit card, there’s no interest, there’s no late fees, there’s no gotchas. It just acts like your debit card.

Vrinda Gupta (00:36:32):

And in the background, essentially, what we’re doing is, every time you’re spending, you’re making a purchase using that line of credit, and you pay that back every week instead of monthly just to make it easier to budget. And then at the end of the month, we tally up all of your payments, and we actually report those two credit bureaus. So in effect, all of your payments are turning into credit building activities.

Tori (00:36:56):

And in a way, that’s like a safety net.

Vrinda Gupta (00:36:59):

You can’t get into trouble with the Sequin card. I saw a lot of, again, minority, women, folks struggling with, where you’re not educated about the system. So you’re making these avoidable credit mistakes.

Tori (00:37:15):

Especially if you’re a first gen, no one in your family is educated about how the system works.

Vrinda Gupta (00:37:18):

Exactly, there’s so much privilege steeped into even understanding how these systems work. And so we wanted to create a product that wouldn’t get you into trouble, but would allow you to build credit. And so essentially, think of this product as your key to unlocking the world of these higher value, travel cards, which we all want, but we need help to get there. And so that’s kind of the nitty gritty of this product. And the last piece I’ll add that’s very cool, I know we’ve talked about credit utilization quite a bit, so we actually make a payment for you the date that your credit utilization, or your credit is being reported to the credit bureaus. And so you can max out this card, and your credit utilization is not going to be affected. So it-

Tori (00:38:09):

Taking the guesswork out of it.

Vrinda Gupta (00:38:11):

Exactly, exactly. So I kind of think of it like a credit card with training wheels, but just build to your credit teaches you about the system. And there haven’t really been products like this on the market. So it’s really exciting to be able to offer something that something I just wish I had had when I was starting off on my credit journey.

Tori (00:38:31):

So how does Sequin make money?

Vrinda Gupta (00:38:33):

So we have a monthly or an annual fee. So it’s just a normal kind of subscription model. Compared to other products that are in kind of like the early credit stage, we’re offering rewards. And we’re also not requiring you to put up your credit line upfront. So essentially, we are charging either $9 a month, or $89 annually. And a lot of that gets paid back and cash rewards and refunds on the pink tech. So we’ll talk about that next. But we didn’t want there to be this interest mechanism. That’s not how we wanted to make money. We wanted people to understand how to budget for this product and use it responsibly.

Tori (00:39:17):

This question I got actually in a comment, and it made me a little uncomfortable. And I wanted to talk to you about it, and get your insight because you definitely know more than I do. I’m going to use a credit card. And I’m going to use it responsibly and use it as a debit card and get a bunch of rewards and basically use it as the ultimate fuck the patriarchy tool. Because I am taking money from this huge billion dollar corporation and being like, “Actually, you expect to make money off of me. I’m going to make money off of you. You’re going to pay for my flight to Europe, you’re going to pay for my lounge access on that flight to Europe.

Tori (00:39:50):

But really, and again, correct me if I’m wrong, it almost feels like I’m almost making my money and my rewards off the back of people who are going into debt. Is that accurate? Is that what’s happening? Is it like they’re able to offer rewards to people who are able to use these credit cards responsibly, either because they’re making smart decisions, or more likely, they probably have the privilege of using those cards responsibly on the back of a bunch of people who are going into debt, trying to survive trying to use these credit cards?

Vrinda Gupta (00:40:21):

So that is part of it. But there’s actually another kind of disturbing issue here.

Tori (00:40:27):

We love them. What’s more disturbing than this first one?

Vrinda Gupta (00:40:30):

Buckle in. So essentially, in addition to interest, the way that credit cards make money is on interchange. And essentially what interchange is, is it’s those merchant swipe fees. So when it’s saying, you go to a small business, and they say, “We don’t accept credit”, that’s because the fees that they have to pay cut so much off of their margin, that it’s not worth it to them,

Tori (00:40:52):

Or you’ll go to some places. Actually, we’re in LA. It’s hard to go out to a restaurant and not pay for valet parking, because there’s no parking. And so they’ll say, $10 for this, and then it’s an $11 fee, if you use a credit card.

Vrinda Gupta (00:41:03):

Exactly, exactly. So what happens with these more premium travel rewards cards is that the interchange is higher. And I guess the rationale behind that is, someone with a travel rewards card is probably spending more. And so in order to get that additional spend at your merchant, you should be accepting this card. And the interchange fees end up kind of mapping to your rewards. But what ends up happening is, if you’re a huge business, that doesn’t really matter, 2%, 3% per swipe fee, someone else can pocket it doesn’t matter.

Tori (00:41:42):

And for the convenience you’re offering, hypothetically, to a customer just not having to use cash.

Vrinda Gupta (00:41:47):

But what ends up happening is these smaller businesses are the ones who end up paying the price.

Tori (00:41:52):

Interesting.

Vrinda Gupta (00:41:53):

And so in addition, what you said is an element but more of a downstream impact. But what we really see with this interchange issue is great, if you’re a huge corporation, you can pay, you know, 2%, 3% per swipe, but if you’re a small business, that really does kind of gouge you. And so, no, a lot of times, what I’ll say is, if you’re shopping at a small business, use either a debit card, one that has credit building abilities like ours, or try to pay in cash if you can. It’s going to be the small ticket purchase.

Tori (00:42:27):

So we’ll talk about this in a second. I don’t own a debit card, I never have, I literally have never owned a debit card, and neither of my parents, and I hardly ever keep cash on me. I put everything on a credit card, and I pay it off in full every month. But you’re exactly right with the merchant fees. I knew that but it didn’t like click to me. And then I’m like, “Do I take care of myself and give myself a little cash back?” Of course, I want to take care of small businesses too. I’m going to have to sit with that.

Vrinda Gupta (00:42:54):

It’s something to think about. And it’s the same way that you think about charity or whatever else. However, you want to split that up. Of course, pocketing the cashback, building credit, all of that, is really important. And so you know, it really does just depend on wherever you feel comfortable. But it is, I think an interesting fact just to illuminate.

Tori (00:43:14):

And just to think about.

Vrinda Gupta (00:43:15):

Just to think about, exactly.

Tori (00:43:19):

Interesting. I’m going to have a whole moral crisis when I try to fall asleep. You touched on this a little bit. But a lot of women have no idea that just because you have a credit card with your name on it, doesn’t mean you’re actually building credit. So what are some common pitfalls? And we mentioned a couple of these already, but what kind of mistakes are you seeing them make when they’re building credit?

Vrinda Gupta (00:43:38):

Absolutely. So the one that you just mentioned, being an authorized or secondary user on someone else’s credit card, that is a parent or a partner more likely, that is not building your credit as effectively. And again, that goes back into the factors that go into your credit. Are you the primary user? Were you the person responsible for paying back? So it’ll get you credit visible, your name will be in the system, but it’s not going to have those same credit boosting effects?

Vrinda Gupta (00:44:04):

So that’s one, the second piece that we see is just these avoidable credit mistakes, like paying the minimum, like paying those late fees as well. We see women and minorities disproportionately doing that. However, when we’re educated, that gap closes, which is interesting. And so, it really does relate just to a lack of education around it as well.

Vrinda Gupta (00:44:26):

The third piece is not opening up a credit b
uilding tool in your own name early. The length of credit piece is so important on this, and sometimes you’ll say, “You don’t have five years of history, that sounds great.” But other people have 30 years, 50 years of history. And unfortunately, this isn’t something that you can go back and fix. And so, just being able to tell your loved ones like, “Hey, let’s start getting you building credit early and responsibly is really important as well.” So those are kind of the top three tips.

Tori (00:45:02):

Switching gears into entrepreneurship. Can you walk me through the venture capitalists? Because I know the stats, and I’m sure you know the stats. Not only do women not receive venture capital. What is it? 3% is it?

Vrinda Gupta (00:45:19):

I’ve heard somewhere 2% to 3%.

Tori (00:45:21):

Especially women of color, it’s even worse if you’re a woman of color. But very few venture capitalists are actually women. And so can you just talk about any experiences you had raising VC? And like, what were the challenges, especially as a brown woman trying to do that?

Vrinda Gupta (00:45:36):

Absolutely. How much time do you have?

Tori (00:45:39):

We have like an hour. I will sit here and be present for all of that.

Vrinda Gupta (00:45:43):

Yes. So I think there’s two elements to this. I think the reality is that someone who looks like me is less likely to be funded by a venture capital world. And I think it’s really important to go in and be equipped with facts and expertise and data. And I think I’ve seen that I need to come into meetings 10 times more prepared than my male counterparts. And this is not unique to the venture capital. This is every industry. As a woman, you have to be 10 times better. And so, that’s something that I’ve seen going in is just getting grilled, getting grilled on stats, getting grilled on my background, getting grilled on my vision, it’s a lot more questions. And actually, I was in an early pitch. And I was pitching to a group of mostly male VCs, but there was one woman, and after she said, “In my years of venture, I’ve never seen someone be grilled like that, and you did a great job. And so, for me-

Tori (00:46:59):

Which feels very validating, but also what the fuck?

Vrinda Gupta (00:47:01):

I know. And actually, I had that exact feeling. At first, I was like, “Thank you”, because this was a woman I really respect. And then I was like, “That’s really messed up. Why did that happen?” So I think that’s one element is there are those differences. You do have to be 10 times better. On the other side, one of my personal theses that I’ve come to develop is I really feel being underrepresented is your superpower. And coming in and saying, “I know something you don’t. I see something that you don’t” is actually so powerful.

Vrinda Gupta (00:47:38):

I read the stat somewhere that every single woman is a billion dollar opportunity, because most systems in our society have not been designed with women, with minorities in mind. So if you see something and you say, “This is not working for me”, it’s probably not you. It’s the system, and you can do something about it. So I think there are two sides of that coin of, “It’s really shitty, and I’m not going to downplay that.” But on the other side, I do feel, that’s why we’re all able to see these opportunities, and even you. That’s so much of your founding story as well.

Tori (00:48:17):

Have you been following the Elizabeth Holmes?

Vrinda Gupta (00:48:18):

Yes. Actually a lot.

Tori (00:48:20):

I am obsessed with her.

Vrinda Gupta (00:48:22):

Me too.

Tori (00:48:23):

I didn’t expect to bring this up, but I’m really curious. I have an interesting response to this whole thing. And I want to know your thoughts. Because 100%, I think what she did was wrong, and 100% deserves to be prosecuted. I think she’s 100% though, also getting way more bad press and is being subjected
to the kind of justice that we have not given to male entrepreneurs. And so it’s interesting, because it’s like, yes, this is a step in the right direction, where there’s a bunch of Silicon Valley people who are selling dreams rather than actual products. But I feel like there’s a massive double standard because of her success as a woman.

Vrinda Gupta (00:49:10):

I have so many thoughts on this. So the media loves a good takedown story of women.

Tori (00:49:19):

100%

Vrinda Gupta (00:49:20):

They love it.

Tori (00:49:22):

The Wing co-founders, I can keep-

Vrinda Gupta (00:49:25):

Exactly and by the way, when I first launched Sequin, I just written a medium article that had legs of its own and there was a reporter who just picked up the story and just trashed everything that we were doing without asking. Actually the premise of the article is that if there actually are so many discrepancies in the system, the bank should be held liable. I’m like, “Yes, the bank should be held liable but in the meantime, let’s also do something about it.”

Tori (00:49:55):

I’m going to be sitting around waiting for the banks to be held liable for a good chunk of time.

Vrinda Gupta (00:49:58):

Exactly. I think we see it time and time again, I would have listed all the same people as you are getting built up by the media. And then they love the takedown. They love the destruction.

Tori (00:50:09):

It’s just like, we as human beings, we love the pitchforks. We love the… We love that.

Vrinda Gupta (00:50:14):

Exactly.

Tori (00:50:16):

And I think especially with the double standard around, she was Silicon Valley’s golden girl.

Vrinda Gupta (00:50:23):

Sweetheart. I think there were certain lines that were crossed. And that’s-

Tori (00:50:30):

And I want to be very clear. I want to be very clear. I 100% believe that she committed a crime.

Vrinda Gupta (00:50:37):

Absolutely.

Tori (00:50:38):

Just the perception of that and the fact that we know that a bunch of, I know, because I worked at startups. You end up selling what the potential of this thing could be. That’s the whole reason you get venture capital, is you’re selling the potential of this thing. You’re going on Shark Tank, typically, and you’re selling the potential of this thing.

Vrinda Gupta (00:51:00):

Exactly.

Tori (00:51:01):

And so I think for her, of course, the line that was crossed was, when was she actually lying about what the thing could do at that moment in time?

Vrinda Gupta (00:51:08):

Exactly, exactly. Turned from this is my vision to this is what this thing does right now and was being tested on very real people. And that’s the problem.

Tori (00:51:16):

I know men hav
e done that shit. I know men have done that shit.

Vrinda Gupta (00:51:19):

I know. I know.

Tori (00:51:20):

And they are not being prosecuted.

Vrinda Gupta (00:51:22):

I know. I know. Double standards are real. I think anyone who denies that could use us a little bit of eye opening and a little bit of education. But I agree. There are just so many of these sTories. Did you watch Super Pumped?

Tori (00:51:41):

No.

Vrinda Gupta (00:51:41):

It’s the new one. It’s on Showtime, I think. But it’s on the Uber CEO. And it’s from his perspective. And it’s very interesting, the way that these two sTories are being told. It shows him and his faults as well, but it’s in a slightly different light. And it’s interesting watching these shows back to back too. So, I agree. The media loves a good takedown, especially when it’s-

Tori (00:52:11):

Totally.

Vrinda Gupta (00:52:12):

… a woman.

Tori (00:52:13):

Totally. And I think, again, it’s not just the takedown, and the double standard. I think we also expect and weaponize women’s altruism. As we say, we value women’s empathy and our altruism to “do the right thing.” And then if we see a woman, not “doing the right thing”, we punish her, or jeopardize her or her opportunities or career in a way that we just don’t with men. So I think part of the conversation around Elizabeth Holmes, which again, should be the conversation, it’s just that it’s not happening with men is it’s like, “What the fuck? Why did she take advantage of all these people? People’s medical history was on the line. We’re not saying that about men. Didn’t she care? Does she have any remorse around this? We don’t really do that with men.

Vrinda Gupta (00:53:08):

I 100% agree with that. And there was another piece related to her were in the trial, they were talking about the fact that she had used company funds to buy clothes and to buy whatever else-

Tori (00:53:22):

The weaponization of the frivolous spending? I have a question about that, too.

Vrinda Gupta (00:53:27):

Exactly. She is held to a different standard. The VCs came out, one of them was like, “I thought she was a pretty girl.” Which by the way, like jaw drop, both of us. I wish everyone could see both of us. But that is a part of the standard, and I think it goes back to the pink tax conversation.

Tori (00:53:48):

We’ll give you VC, you cute little woman entrepreneur, as long as you’re hot. As long as you’re nice to look at.

Vrinda Gupta (00:53:52):

Exactly.

Tori (00:53:53):

And then, we’ll tell you that you’re frivolous, that you’re spending frivolously on the things that we expect you to look hot for, the makeup, and the clothes, and the hair.

Vrinda Gupta (00:54:04):

You can’t win.

Tori (00:54:05):

No, you can’t win.

Vrinda Gupta (00:54:08):

Again, I think we keep on caveating this with she lied. It was fraud.

Tori (00:54:13):

Yes, again, I want to be super clear.

Vrinda Gupta (00:54:15):

But everything leading up to that, before she crossed those lines, that’s a pretty typical story of you have a vision, you’re selling it, you’re out there, you’re doing what it takes.

Tori (00:54:26):

And she wasn’t a scientist, she didn’t have any experience in health care. And a bunch of people were like, “That’s crazy.” And I’m like, “Literally people do that shit all the time.” People will say I want to start this company. I have no idea how so I’m going to go in employ a bunch of really smart people who can do this for me. That’s completely normal. I’m still fascinated by the story.

Vrinda Gupta (00:54:47):

I know. I know the double standard.

Tori (00:54:55):

There was a bunch of those. And again that the whole idea I think with a way story, I don’t know the full. I haven’t read that article in a long time. So I don’t want to misspeak, because I think, again, there were serious issues that were happening. But again, we have a certain pedestal that we’ve put women founders on. And then we’re really excited to watch them fall. And in addition, we’re an insensitive, uncomfortable work environment. How dare these women. And it’s like men have created uncomfortable work environments, and also been praised for it.

Vrinda Gupta (00:55:26):

Exactly.

Tori (00:55:27):

Like the Steve Jobs bullshit, where they’re like, “He wouldn’t shower, and he would yell at his employees.” But because he was passionate, and because he was a visionary, and I’m like, “Make that make sense.”

Vrinda Gupta (00:55:35):

I know, I know. I know. I know. You can see it when you have these comparisons. You have, again, you have the Uber CEO.

Tori (00:55:45):

WeWork CEO, did you watch that whole thing?

Vrinda Gupta (00:55:47):

Yes, I did. There’s so many of these now. But it’s hard to watch. And coming back to it, I think about my day today. And I think about what does this mean for me? I am ready to get a lot of criticism for what I’m doing. I think ultimately you just have to care and really believe that you’re doing a good thing, and for me, it’s talking to thousands of women who I feel so much more credit confident and empowered to my credit after talking to you or using your services, and I need that. And so when all the other bullshit comes out me that’s what I think about.

Tori (00:56:29):

Knowing that you’re doing it for a reason.

Vrinda Gupta (00:56:31):

I know. I think the intentionality is the most important piece. Not lying.

Tori (00:56:36):

Not lying and frauding investors.

Vrinda Gupta (00:56:39):

Yes.

Tori (00:56:40):

And giving positive cancer test results when you don’t have cancer. I have been obsessed with that.

Vrinda Gupta (00:56:47):

I know. Are you watching the-

Tori (00:56:49):

[inaudible 00:56:49].

Vrinda Gupta (
00:56:50):

I watched the most recent episode last night. It’s so good.

Tori (00:56:53):

I think I’ve seen two or three episodes.

Vrinda Gupta (00:56:55):

here’s just one more out.

Tori (00:56:57):

I’ve listened to the whole podcast. Was it bad blood I’ve read. I have a very big obsession with like scam artists and grifters like I love that.

Vrinda Gupta (00:57:07):

There’s a lot of that out there right now. Tinder Swindler.

Tori (00:57:12):

I’m really fascinated by it. So the words con man or the phrase con man is confidence man. So it’s people who are just incredibly confident.

Vrinda Gupta (00:57:23):

Even like the Catch Me If You Can.

Tori (00:57:24):

I love that movie.

Vrinda Gupta (00:57:27):

Me too, I feel like we have a similar interest.

Tori (00:57:29):

It’s just so fascinating.

Vrinda Gupta (00:57:32):

And it gets you all of these crazy places. But when you cross the line then-

Tori (00:57:38):

Well, and then some people, do actually have a conscience like the Leo DiCaprio character, which is based on a true story. Frank Abagnale, and then you also have the people who I think are borderline or actually sociopathic who don’t feel anything. And who are okay manipulating people because it actually makes them feel good to manipulate people. I didn’t think we could talk anymore. So starting your own business, rather than taking a banking job or a job in finance, because you graduated through your MBA, right? And then you were like, “I’m going to go start a company.”

Vrinda Gupta (00:58:16):

Yeah, I started the company, actually, when I was in my MBA.

Tori (00:58:19):

Was that super daunting in the light of COVID? And did you know you always wanted to run your own business?

Vrinda Gupta (00:58:26):

So going back to the Steve Jobs conversation we’re having. So I, first generation immigrant born in India, we moved to Cupertino. And that’s actually where I grew up. So the land of cheat, Steve Jobs, Apple world, growing all of it. All of that, growing up, when I looked at entrepreneurs, I thought it was Steve Jobs. And I looked at myself, I looked at my values, I looked at, how he was leading orgs. And he’s a genius, he’s a visionary, all of those words again that we used to describe men.

Tori (00:59:01):

All of those things are true.

Vrinda Gupta (00:59:03):

But I don’t think I ever I didn’t see entrepreneurs who looked like me. And I think it is very hard to be who you can’t see. And so I went to visa, worked there, we know that story. I left visa because I felt there was a lot of opportunity to do something good in banking. There are so many underserved populations that need help. And so I went to business school thinking that maybe I could be an executive at a big bank, and I could really focus on some of these populations, especially given-

Tori (00:59:43):

Make change within these like monoliths.

Vrinda Gupta</stron g> (00:59:46):

Exactly, exactly. Then I started getting offers for those positions. And I realized that the change that needed to happen because it’s so systemic and ingrained, it couldn’t be made from within the system. And when I started thinking about populations that I really cared about, it was the ones that I identified with. Being a woman, being a first generation immigrant, being a person of color, all of these populations are being marginalized, left out of the system. And so I looked around and I said, “I don’t see a company that feels like it’s going to address this.”

Tori (01:00:24):

In the way that you want.

Vrinda Gupta (01:00:26):

Exactly. And I was looking around, and then I started looking at myself, and I said, I have this amazing background. I really care. Also, I think the timing was good, Time’s Up was happening. Me Too was happening. And I was just like, “The future is so female, hell yes. Let’s go.” And so I was actually doing my MBA summer internship at a design agency called IDEO.

Tori (01:00:48):

Yes. Was it not human design theory?

Vrinda Gupta (01:00:51):

Design thinking?

Tori (01:00:54):

This is very weird. One of my internships in college was helping the marketing for a book all about design theory. It was one of the IDEO founders, it was somebody who had worked in that whole space. That’s so funny.

Vrinda Gupta (01:01:09):

And so it’s a really creative bunch. And again, I was thinking a lot about what do I want to do, because going back into traditional bank doesn’t really make sense for what I want to do. And then I just had this idea. And I said, “Maybe I could build a financial product that was totally different, that could really center women and mostly decenter who the industry was built for. But then, as I thought about who I really cared about helping, it just went back to my mom. And I was like, I just feel like so many women need this. And there’s this amazing quote from the president of the Women’s World Bank. And she said, “When you build products designed to center women, they work better for everyone. Unfortunately, the other way around isn’t true.”

Tori (01:02:02):

Will you say that one more time?

Vrinda Gupta (01:02:03):

Yes, “When you build products and services centered around women, they work better for everyone. Unfortunately, the opposite is not true.” And so what we’re seeing with our product right now is so many guys are coming in, and are saying that, “We love this, this is really cool. Can we use it?” And we’re like, “Yes”, the point is to be inclusive and to think about something differently.

Tori (01:02:26):

[inaudible 01:02:26] Her First 100k too, where men are like, “Can I be here? And I’m like, “As long as you’re chill. Yes, you can 100% be here.

Vrinda Gupta (01:02:33):

Exactly.

Tori (01:02:33):

We want you here.

Vrinda Gupta (01:02:35):

The allyship is so important.

Tori (01:02:36):

If you’re being a dick, “No, you are not welcome.” But, no.

Vrinda Gupta (01:02:39):

Exactly.

Tori (01:02:40):

Everything else is super brilliant. I don’t want to be a bro and I’m like, “Welcome. Welcome. No bros allowed here.”

Vrinda Gupta (01:02:46):

Yes. I love it. Yes. So, I was thinking about this. I actually was washing hands next to a woman in a restroom, which is relevant. I add this because this is why we need women in positions of power. Because this happens to guys all the time. Right? They’re like, “I was with my buddy golfing. And I talked about my business idea and then they got funded.”

Tori (01:03:05):

Talks about stocks or yeah, totally.

Vrinda Gupta (01:03:07):

Exactly. And so, that’s what happened to me was as we’re washing hands in a restroom, I just spilled out. I was like, “I think women have this incredible spending power. And we’re not being [inaudible 01:03:17].

Tori (01:03:17):

Do you know this woman?

Vrinda Gupta (01:03:19):

Brief, we were colleagues from my summer internship.

Tori (01:03:22):

I didn’t know if it was just like a random stranger in an airport being like, “Let’s talk about the spending power.”

Vrinda Gupta (01:03:26):

No, this was at IDEO, at my MBA summer internship.

Tori (01:03:28):

[inaudible 01:03:28] random restroom where you’re just like, “Hey, can I pitch you my business venture?”

Vrinda Gupta (01:03:34):

No, this was within the confines of my internship. But she was asking me how my internship was going. And I said, “It’s fine. However, I just feel there is a huge opportunity to help women step into their financial power.” And she said, “Have you thought about anything else?” And I was like, “I have experienced building credit cards. Building credit is a huge issue. I built most of the most popular rewards cards on the market. So I think I could do something that could really stand for something meaningful and reward women’s spend.” And she said, “Well, I’m a part of the Investment Committee. Do you want to pitch to the Investment Committee?” And it’s one of those, in movies, those moments that can just change the trajectory of your life. I didn’t think because probably, if I thought more, I would have been too scared. I would have said “No,” but I just said “Yes”.

Vrinda Gupta (01:04:24):

And I pitched the committee and they loved it. And they gave me a little bit of seed funding. And then I went out to raise the rest of our pre-seed round, and you’ll appreciate the story. I had been approached by three very traditional VCs who wanted to take the rest of the round. But I said, the whole purpose of this is to get women wealthy and women partaking in the financial system, whether it’s, with building credit or whether it’s with being VCs and having your hands on something like this. So I ended up reaching out to a bunch of amazing women investors including Carrie Schwab Pomerantz, who’s the president of the Schwab Foundation. And she said, “Yes”. She invested and 92% of our cap table is women.

Tori (01:05:13):

That unfortunately shouldn’t be so jaw dropping. But that’s amazing.

Vrinda Gupta (01:05:17):

It’s usually 100% men. So I think being really intentional. It was harder for sure. It took me longer.

Tori (01:05:25):

It’s 100% percent harder.

Vrinda Gupta (01:05:26):

Yes, It was a really, really good decision.

Tori (01:05:28):

That’s amazing. That’s so cool. What would it look like if the credit card industry was built for women? Like if we were to tear it all down? We don’t know anything, we’re like little babies in a utopia, what does it look like if it was built for women?

Vrinda Gupta (01:05:41):

I think about that every day with Sequin. I think there are a few things that fundamentally would be different.
The first piece is the transparency element. How does this work? How do you make money? What do I need to do to get into this system? What happens at the end of the month? I shouldn’t have to listen to a podcast to know that you and your product should tell me how this works. The second piece is education around what these products can get you and talking about what is your next financial goal? Let’s work backwards, let me nurture you into the system versus what’s happening today is women are first of all, not entering the system at the same rates, but are falling off every step of the way. So if you see from debit to your first credit card, there’s so much drop out in terms of women actually and minority-

Tori (01:06:39):

I was going to say especially in black and brown community.

Vrinda Gupta (01:06:41):

Exactly.

Tori (01:06:42):

Some of them are even getting to debit card or bank.

Vrinda Gupta (01:06:45):

Exactly, yes. Yes, exactly. That’s a great point. So you’re zero. You’re using cash or whatever else.

Tori (01:06:53):

Or [inaudible 01:06:54] establishments to cash your checks. That’s a whole other conversation we could have.

Vrinda Gupta (01:06:59):

For sure.

Tori (01:07:00):

So going from there to debit card is even a leap and then debit cards to credit card.

Vrinda Gupta (01:07:04):

Debit to credit, and then credit to investing and other tools. There’s so much drop off at each part of the system.

Tori (01:07:10):

Or basic credit card with 1% cashback

Vrinda Gupta (01:07:13):

Exactly, to a premium travel rewards.

Tori (01:07:15):

Me at the AMEX Platinum, I didn’t get there overnight. But there was the drop off that happens every single-

Vrinda Gupta (01:07:22):

Exactly.

Tori (01:07:22):

… step you make up the staircase.

Vrinda Gupta (01:07:24):

So nurturing you through that, how do you actually get from each of these financial steps? And then the third piece is community. And what we see, and what I think about a lot is, “How do you make credit and finances?” which is traditionally this one single player game. How do you make it a multiplayer game? Because your finances and every dollar you spend are representative of your values and what you care about? And so being able to share that with others, where am I spending? What am I supporting? What’s cool this month? It could be a whole gamut of things as well.

Tori (01:08:03):

So making it less of an individual experience or choice, and more of a collective choice.

Vrinda Gupta (01:08:07):

Exactly. And having just a safe space for all of this to happen. And talk about things because, again, finances are so personal. And it’s a reason that people stay in bad relationships. It’s a reason. Gosh, there’s so so much like heavy material around finances. So I think just having that support as well would be different.

Tori (01:08:30):

Totally. So building the algorithm for Sequin cards, what are you keeping from Visa? And what are you disregarding?

Vrinda Gupta (01:08:38):

So, disregarding, let’s start there. So we don’t require a credit score for you to get onto our product.

Tori (01:08:50):

Or a credit check, right? So if you’re not requiring a credit score, I didn’t even think about this till now, so a bunch of undocumented people are not able to get credit cards, hypothetically, in the country.

Vrinda Gupta (01:09:03):

Right. Exactly. You need an SSN. So I guess that’s like a keep, in the future I think there’s ways around that. This is our first product. So we don’t think that you need to have credit to get credit. So, you don’t need a credit score. We don’t do a hard pull or a credit check on you. The only thing that we look for is that you have a few $100 in your bank account, and that you’ve had that bank account for few months at least. So it’s not something that was just spun up overnight. And that kind of helps us kind of think about make sure you’re a real person, essentially.

Tori (01:09:43):

Well, and also making sure that it’s not so much that you’re able to pay it back in a way that we need our money, but more just like that you are financially capable of taking this next step.

Vrinda Gupta (01:09:54):

Exactly. So that’s what we look for, we just make sure you have enough in your bank account to cover that credit line. So you’re not in a situation where the end of the week happens, and you aren’t able to pay back. So that’s a disregard. On a lighter disregard, one of the pieces that I kept on hearing from women who I spoke with about their existing banking products was, I have a question, “Why are all of my banking products black or blue? They’re ugly.” And I said-

Tori (01:10:29):

They are very ugly.

Vrinda Gupta (01:10:30):

… and I said, “You know what, I don’t know that. But somehow blue has become associated with power and security. And by the way, blue is associated with the patriarchy. And so-

Tori (01:10:41):

It’s a very masculine color.

Vrinda Gupta (01:10:43):

Exactly. And again, I like blue. It’s nothing about blue.

Tori (01:10:46):

Actually, it’s funny you say that because I carry three cards on me pretty much at all times since the AMEX Platinum, which is like a gray or like a silver, platinum silver. And then my two Chase cards are both blue, my Ink card for my business and my Sapphire Reserve, which is blue.

Vrinda Gupta (01:11:05):

So our Sequin card is actually coral.

Tori (01:11:09):

Cool. Like my lip color?

Vrinda Gupta (01:11:11):

Yes. Actually funny enough. So one of our tenants at Sequin is co-creation. I didn’t want to come into this and say, “Well, you should want this.” I really wanted to talk to a bunch of different women a bunch of different minorities and say, “What do you like?” And one thing that came up was, “Coral is a color that looks good on every skin tone.” And yes, exactly like your lipstick. I love it. It’s actually very similar. I’ll show you a card after this.

Tori (01:11:34):

Yes! Perfect branding. So I don’t know if you know this, the Her First 100k, we call it blackberry sorbet internally, but it’s like that burgundy brand color.

Vrinda Gupta (01:11:43):

Yes, yes.

Tori (01:11:44):

That is the exact lipstick color I wear all the time. And of course, I’ve got like a different tone on today. But we literally built the brand around t
hat color. Because we didn’t want it to be pink. And we were like, “What color?” Because we still want it to be feminine, but, again we were like avoiding pink. And I was like, “Perfect branding.”

Vrinda Gupta (01:12:01):

I know. And your lipstick is now sequin color.

Tori (01:12:03):

So there you go. I planned it.

Vrinda Gupta (01:12:06):

So that’s the thing that that we’re leaving. The other piece that we’re leaving behind is just again, the lack of transparency. So having the education is really core, the things that we’re keeping are financial tools, when used responsibly, are really powerful. So, there are some tools that exists in the market that are completely kind of outside of the financial system. And one of the pieces that I thought a lot about when I thought about how to actually help women and minorities get into the system is how do you set yourself up to play within the existing system to at least again, give yourself that optionality. And so our line of credit reports to all three credit bureaus, and that gets you credit visible. So we want you to be able to partake in the system, if you would like to. So that’s something we’re keeping.

Tori (01:12:54):

Totally, amazing. My last question for you. On the heels of this, this question around, how is the world different if women have credit? What do you want women, specifically women of color, to know about building their financial lives? And what for you was the biggest aha moment or the biggest confirmation that this is what I want to do with my life?

Vrinda Gupta (01:13:14):

When I first started sequin, I wanted to talk to as many women and as many women of color as I could. And it ended up actually kind of being a self selecting sample, because I’m a woman of color. So I think a lot of women of color felt comfortable talking to me. And I kept on hearing that they wanted to learn more about the system, they really wanted to know, but they felt they lacked confidence and understanding how the system worked. And because of that, they said again, just like my mom, “I don’t want to make a mistake. So I don’t want to play.”

Tori (01:13:55):

I don’t mean to cut you off. But the amount of times I hear that, “I don’t want to make a mistake. So I’m just not going to do anything at all because it feels like such life or death with when it comes to like something as precious as money.” I hear that all the time.

Vrinda Gupta (01:14:09):

Exactly. So I think the aha moment was “Well, women and minorities do want to be a part of the system, but they just don’t, A, don’t have a tool that feels approachable, but B, do not have the education to actually help them get into that system as well. And so, I think the merger of those two is so powerful, where you can actually have a tool that is getting you to avoid those gotchas, you don’t have to worry, but it’s doing all of the great things that credit can do for you. But also having that education as well and teaching you about how the system works, why it works a certain way and making sure that you feel confident in the tool that you’re using. So I guess I would say the credit confidence is almost as important as the actual credit building, because you can have great credit and still not feel very confident. And by the way, vice versa.

Tori (01:15:04):

Great. Great.

Vrinda Gupta (01:15:05):

I think just the combination of the both knowing how the system works and actually being able to build credit and be a part of that system is really important.

Tori (01:15:15):

Anything else you’d like to add? Or that I didn’t touch on?

Vrinda Gupta (01:15:20):

I wanted to talk about the pink tax and the rewards.

Tori (01:15:23):

Yes, let’s talk about that. When you say, first, for those of you don’t know, I’m sure you know, but what is the pink tax? And how does that, of course, affect women disproportionately, when compared to how it affects men.

Vrinda Gupta (01:15:36):

So essentially, the pink tax is this absurd cost of womanhood, which basically makes everyday products and services cost more for women 42% of the time,

Tori (01:15:48):

I didn’t realize it was that high, I thought it was 30ish.

Vrinda Gupta (01:15:50):

42%, yes. And it actually comes out to on average, about $1,350 a year. But that’s more in traditional pink tax categories. And the emblem of this has become the razor. So if I’m a man, and I’m getting a black, or blue, or whatever color razor, it’s a certain amount. And for women, it’s pink, and now all of a sudden, it’s 42%, more expensive. But the other piece that I like to just clump into this pink tax conversation is the other hidden cost to being a woman. And so, we’re talking about credit, but also thinking through public transportation.

Tori (01:16:32):

Thank you.

Vrinda Gupta (01:16:33):

At night, I’m not going to feel comfortable taking the BART. I live in San Francisco. So I’m going to take a ride sharing service, and that’s going to cost me more.

Tori (01:16:43):

You know about the fire community, the financial dependents retirement community? And one of my biggest criticisms, and a lot of women identify and people’s criticisms of that community is they’re like, “Well, bike everywhere.” And I’m like, “If it gets dark at five o’clock, and I have to leave work at six, I’m not biking home. I don’t have that option.” I don’t have the option of biking home to save money.

Vrinda Gupta (01:17:04):

I know. So caretaking is another huge part of the conversation. The gender wage gap is another huge part of this conversation as well.

Tori (01:17:16):

Tampons being taxed as luxury goods.

Vrinda Gupta (01:17:19):

That is such bullshit. Yes, exactly. The luxury tax on tampons. There’s so much around this and not to mention health care. For women, it’s just so much more throughout our lives. So there are all these hidden costs to being a woman, the pink tax being one of them.

Tori (01:17:38):

So talk to me about the rewards program. Are you looking to combat the pink tax? How does this work?

Vrinda Gupta (01:17:44):

So I wanted Sequin to be a symbol of finding the patriarchy.

Tori (01:17:49):

Sure.

Vrinda Gupta (01:17:49):

And part of that is being able to pocket some of what the pink tax is. And so essentially, we in terms of our rewards, I love airline lounge access as much as the next person. You can get that somewhere else. But with Sequin, we really wanted it to be relevant to kind of women’s lived experiences.

Tori (01:18:11):

Sure.

Vrinda Gupta (01:18:11):

And so we have a really simple cashback. There’s no complex reward schemes. So you know what you’re getting every dollar you’re spending. The second piece is we actually have cash credits in a pink tax categories. So if you use your Sequin card on a category that is pink tax, which is actually a lot of categories, because unfortunately, many categories are a couple. So starting with household goods, retail beauty, charity, there’s a whole list, subscription services, a whole list.

Tori (01:18:44):

How’s charity pink tax?

Vrinda Gupta (01:18:45):

Women are more charitable.

Tori (01:18:48):

Right, right. Sure.

Vrinda Gupta (
01:18:49):

So it’s basically just any categories where women are spending more than men, and then end up kind of being pink tax as well. So we give cash credits on that. And then third piece, kind of on the theme of having a product that’s very aspirational. I wanted this to feel like a product that met where women’s aspirations are, which are everywhere, sky’s the limit. And so, on our product, we have partnerships with women founded venture backed companies, and we offer perks and discounts on everything from mental health services to personal branding services. And so, there really is kind of this aspirational element to it as well. And then we have-

Tori (01:19:32):

Soft development that sounds like too.

Vrinda Gupta (01:19:33):

Exactly. And then, also in terms of the education and some of the Sequin experiences, we do credit power hours where we talk about everything related to credit. Like if you couple up, how do you think about credit? If you’re about to start a business, how do you think about business? There’s just so many conversations as well. And then of course, just having that community to chat with. So just combating some of these hidden costs and having a product that really stands for everything being a woman is, which is everything.

Tori (01:20:04):

Amazing.

Vrinda Gupta (01:20:05):

So I’m really excited about it.

Tori (01:20:06):

Well, I so appreciate you coming on and sharing your thoughts. Where can people find you? Where can people find Sequin, all of that good stuff?

Vrinda Gupta (01:20:14):

Check us out on sequincard.com. We are in weightless mode, but we are opening it up really soon.

Tori (01:20:22):

Cool.

Vrinda Gupta (01:20:22):

And so folks to sign up will be the first to know.

Tori (01:20:24):

Amazing

Vrinda Gupta (01:20:25):

And you can follow us on Instagram as well. It’s sequin_card.

Tori (01:20:28):

Cool. Thank you so much again to Vrinda for joining us for this episode. We’ve linked tons of credit resources including more information on the Sequined card in our show notes. And if you’re loving financial feminist, and if you’ve got a lot out of this episode, make sure to share this podcast with your friends and family, and leave us a review on your favorite podcasting platform. It only takes a few minutes, but if you subscribe, and you rate review, it’s the best way to make sure that the mission of financial feminism is spread far and wide. I can’t wait to see you next week financial feminists. Talk to you soon.

Tori (01:21:05):

Thank you for listening to financial feminist at Her First 100k podcast. Financial feminist is hosted by me Tori Dunlap, produced by Kristin Fields, marketing and administration by Karina Patel. Olivia Coning, Cherie Suede, Alina Helzer, Paulina Isaac, Sophia Cohen, Valerie Aresko, Jack Coning and Ana Alexandra. Research by Arielle Johnson, Audio engineering by Austin fields, Promotional Graphics by Mary Stratton, Photography by Sarah Wolf, and theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100k team and community for supporting the show. For more information about financial feminist, Her First 100k, our guests, and episode show notes, visit financialfeministpodcast.com.