Scoring a credit card without a hard pull to your credit is difficult, with only a handful of cards on the market offering the opportunity. Since they are typically designed for those new to credit or rebuilding their scores, these cards often have little to offer in terms of rewards or perks.
The new Arro Credit Card promises a different structure. Cardholders have the opportunity to earn rewards, gain access to a low annual percentage rate and pay only a modest annual fee. But is it too good to be true? While the Arro card does have some benefits that set it apart from its competitors, its gamification scheme for unlocking perks and short-term access to some benefits may limit its appeal. Here’s what you need to know.
[READ: Best Credit Cards for Students]
Arro Card Details
The Arro Credit Card, issued by Community Federal Savings Bank, appeals to low- and no-credit individuals with a comprehensive financial literacy platform and favorable terms such as no hard credit pull or security deposit required. Other details include:
— APR: 16% intro APR for the first six months; 25% variable APR ongoing, which can be reduced with responsible activity.
— Annual fee: $12, $24 or $36 in the first year, depending on creditworthiness; $36 annual fee ongoing.
— Credit limit: Initial credit limit of $50, $100 or $200 based on creditworthiness, which can be increased with responsible activity.
— Rewards rate: Starting in December, cardholders earn 1% back on gas and groceries (including Walmart and Target), with higher rates available for cardholders who meet certain thresholds.
You’ll need to be a U.S. citizen, 18 years or older and have a valid bank account with at least a $50 balance to qualify for an Arro Credit Card. You’ll also need a smartphone to access the Arro app, as it’s the only way to use the service.
The basics of the card are relatively straightforward, but what sets the Arro card apart is a gamified structure for unlocking better card terms. Cardholders can access lessons and goals in the Arro financial literacy app designed to improve their financial health. As they complete levels, they unlock a higher score in bronze, silver, gold and platinum tiers, each of which comes with the opportunity to increase rewards percentages, unlock new earning categories, increase their credit limit and more.
For instance, a cardholder in the platinum tier can get up to a $2,500 credit limit, according to an Arro representative.
[Read: Best Secured Credit Cards.]
Is the Arro Card Worth It?
The Arro card is a welcome addition to the rewards credit card space for those who have limited credit history. Features like a rewards program and low starting APR are hard to find on similar cards for no credit, plus the card doesn’t require a security deposit and charges a relatively low annual fee. Arro reports to all three credit bureaus, helping you build a healthy credit profile.
That said, the starting credit limit on the Arro card could be lower than what you’d get with a secured credit card. Additionally, the requirement to meet certain financial literacy goals to unlock the best terms will be a barrier to some cardholders, and a more straightforward credit-building card could be a simpler path to good credit. However, this might be a good starter card for a young adult with limited credit experience who doesn’t need access to a large credit limit.
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With No Hard Credit Check, Is New Arro Credit Card a Bull’s-Eye? originally appeared on usnews.com
