Offer credit card 💳

[Cameron]

Monzo are really risk adverse, I don’t think they’ve made any profit from their loans, so this could be a reason why the won’t offer a credit card.

[davidwalton (Hot Coral Analyst)]

is working on a (currently) unpublished feature which seems to be related to offering credit - most people would call it credit card development.

Source: Monzo Credit Card - what and why! - #79 by TheoGibson

[stephenoakman]

Credit card - please. I want to switch fully to monzo to move away from our well known bank that is frustrating to deal with all the time - but without a fully integrated credit card, my wife just won’t make the switch.

It’s not the credit side of things, apart from the protection from it being a credit card itself, as we pay in full each month. It’s the visibility of it being fully integrated, and especially from a joint account perspective - so one account shared, each of us having access to it, and with us both having a joint credit card also linked, with the visibility for all transactions through the account and credit cards, and then reporting and classification of the transactions etc.

That would be awesome, and just make it easier to manage and deal with, with all the rich technical goodness of monzo, and none of the uselessness of our current well known bank offering that makes me want to scream every time I have to deal with them.

[Remi]

I would not rely on a single bank as much as you pointed here
Too risky

Better have a few different accounts at different banks for bills, grocery spending, travelling

[Ordog]

@Remi

Too risky

It’s a marginal risk but I’d say it’s more of a temporary inconvenience (only sometimes) on the rare occasion that there is a bank/network issue.

[awjdean]

I think this has been implemented with Monzo Flex:

Introducing Monzo Flex – a better way to pay later

Hey everyone We’ve got some really big news… Today we’re launching Monzo Flex! A few of you (ahem) guessed a couple of weeks back that something new might be coming. And you were absolutely right Monzo Flex lets you spread the cost of purchases over 3 months interest free, or over 6 or 12 months at 19% APR (variable). If approved, you’ll get your own credit limit that you can use to flex, all in your Monzo app. [Flex_Blog_01] You told us the problems you …

Especially since you can now have a physical Monzo Flex card:

Help us test physical Flex cards

We’re rolling out physical cards Firstly, thanks for helping us test the cards. It helps us get really quick feedback and spot any bugs. You probably don’t get to see it as you already have the features, but we’re able to update journeys and words in the app really quickly and the product is undoubtably better thanks to your feedback. We’ve wrapped up the physical cards test and I’m excited to say we’re going to roll them out to all new and existing Flex users. From today we’re …

And Monzo Flex is processed as its own card:

Introducing Monzo Flex – a better way to pay later

Behind the scenes – Migrating to Direct Flex I thought I’d give you a little bit of behind the scenes info on how Flex works and some changes we are making. Today, when you make a transaction on Flex it’s actually processed with the current account as an intermediary. By initially building Flex in this way we could re-use more of the customer support tooling, dispute processing and other functionality of the current account. The processing looks like the following: [Indirect Flex Virtual Car…

Might be time to mark this topic as Done ?

[SouthseaOne (Michael)]

That would be my personal opinion on it too, but it is not actually called a credit card, so I will leave it up to others to decide

[N26throwaway (Sir Tom MacMonier)]

I think Monzo are starting to call it one in their marketing now.

Probably best to leave this one alone for now though, to me it still isn’t quite a credit card nor a replacement for one, and I think that sentiment is pretty widely reciprocated by others too.

[awjdean]

@N26throwaway

to me it still isn’t quite a credit card

What would need to change for you to consider it a credit card ?

[N26throwaway (Sir Tom MacMonier)]

Still quite a bit.

For starters it would need to work like, well, a credit card.

I’ve spoke about it and more in feedback I’ve provided over in the flex thread.

It keeps making steps towards becoming one, but that’s the biggie.

[rarther]

@N26throwaway

I think Monzo are starting to call it one in their marketing now.

Yes… The Clearscore mailshot said get a Monzo Flex Credit Card!

You can pay it off at the end of the month interest free - like a credit card, or you can carry a balance and pay loads of interest -like a credit card. So even if we old timers think it’s not a credit card, to normal folks it’s definitely a credit card.

I guess that’s this ancient topic nailed on the head then

[N26throwaway (Sir Tom MacMonier)]

@rarther

to normal folks it’s definitely a credit card.

Emphasis mine. It was better before you edited it. Now it’s just offensive, if not discriminatory. What’s normal?

Even internally, Monzo themselves aren’t clear on whether it’s a credit card. According to the folks who’ve messaged me, the higher ups want to call it one, but those lower down don’t see it as one. According to them, It’s a Klarna-esque BNPL product designed for YOLO borrowers.

[awjdean]

@N26throwaway

I’ve spoke about it and more in feedback I’ve provided over in the flex thread.

Would you mind listing the reasons on here? The Flex thread is pretty long to such through and I’d be interested to read what your thoughts are.

[ndrw (A judgemental prick)]

@rarther

to normal folks

I’d like to know what a normal folk is. Sure it’s a card and you spend on credit but it’s far from what one expects to see when they hear the words credit card.

There are no statements to speak of, no interest free period (when paying in full like on a credit card) and pending balances don’t get carried over on the statement date. I’d say those are basic things people expect when speaking of credit cards, so much so that advertising Flex as one is in my opinion not in line with the new FCA Consumer Duty.

[N26throwaway (Sir Tom MacMonier)]

To build from how @rarther rebutted that it can in fact be used like a credit card, it has a bit of a pain point as a caveat. Monzo will start charging you interest immediately from the moment the transactions settles. And the entire transaction must be paid off within a year. That caveat and restriction doesn’t exist with a traditional credit. You don’t start paying interest until your bill due date.

Here are some posts where I share my thoughts:

Introducing Monzo Flex – a better way to pay later

Was bored, so decided to have a play just to see what the flows and experience was like. Found an eligible transaction. My most recent payment for my YFood subscription. I chose the end of the month for payments because that’s when I’m used to dealing with credit bills. Credit at the end of a month, bills at the start. That’s my approach. [image] Chose the 3 instalment (obvs) so there’s no interest. I don’t need to flex so why would I wanna pay interest? Interesting thing happens next thoug…

Point 4 is prudent there.

Introducing Monzo Flex – a better way to pay later

What’s different is your normal credit card doesn’t start billing you at all for unsettled transactions (which holds are), whereas flex will start charging you. You’ll get that money back once the hold is released, but it’s not really ideal. It can cascade into other problems and mis-prioritise your finances. It also over complicates a process which is otherwise pretty straightforward. It’s one of the many flex quirks with room for improvement IMO.

Introducing Monzo Flex – a better way to pay later

Monzo could probably do a lot better here by reinventing the flow as opposed to the process in my opinion. Ring fence pending transactions, but don’t force folks into choosing a plan until it’s settled, and hold the push notification until that happens. Because the reinvented process to fit the product just doesn’t seem to work here and causes confusion. I believe there’s a best of both worlds possibility here to better serve these edge cases. We can’t just pretend an important part of the way…

Introducing Monzo Flex – a better way to pay later

I’m team Ethan on this one, sorry revels! (Still rooting for you in the battle of the Dan tho) The flex approach is both simultaneously easier to snowball, and can invoke a bit of sensory overload. One small miscalculation can snowball very quickly into something insurmountable. And in those situations because of the way it works, and can be seen as a useful tool to get out of it too which could actually wind up doing the opposite, making it harder to get under control. One thing they could imp…

That last one relates to the billing differences.

These are all pain points, most of which still exist with Flex today (though some have been improved or outright fixed since those posts), and they don’t exist with traditional credit cards. Monzo would need to fix them all before I could start to see it as one. Until then it’s still just Klarna but with a card to me.

Another one is not being able to take cash out. Especially abroad, where there a still countries who don’t deal with card payments much. Less of a problem since you bank with Monzo, but emergencies happen.

I’m sure there are other niche things too, but I can’t think of them off the top of my head. Most will be in that thread somewhere, posted by someone, though.

[o99]

I haven’t tried Flex and haven’t really been paying attention to it, but from the descriptions above it doesn’t sound like what l’d consider to be a credit card.

key issue for me is lack of monthly bill.

[rarther]

For those who were offended by my comment about normal folks being able to see Flex as a credit card where we see it as something other than a credit card, I was referring to the 99.9% of people who don’t spend their time on internet forums discussing the fine details of their bank It’s a card that lets you pay it back later, so it’s a credit card to any non-alpha early adopter super power users.

[l33t]

I guess flex isn’t a credit card just like chase and rev aren’t banks as they don’t take cheques

[j06 (Jamie)]

A vote for credit card here. It’s a credit card, just a better one without all the weird stuff that is designed to rip off confuse the customers, like the 56 days no interest ‘feature’.

[o99]

@j06

It’s a credit card, just a better one without all the weird stuff that is designed to rip off confuse the customers, like the 56 days no interest ‘feature’.

I think whether one approach to credit is better than the other depends on individuals. I haven’t tried Monzo Flex, but I have tried other BNPL products where credit terms are per item. I found that approach more confusing than the traditional credit card approach (single bill for all items purchased in a month).