CRED: An App That Rewards You For Paying Credit Card Bills

If you use a credit card, this post is for you!

Kunal Shah, the founder of Freecharge which was acquired by Snapdeal in 2015 for $400 million, launched a new startup sometime back, called ‘CRED’, with a vision to “celebrate and reward the most creditworthy people of India”.

Ok, you got me interested! Tell me more about CRED.

CRED is an app that lets people manage and pay their credit card bills. But what’s new in that, when you can pay your credit card bill through your bank website or even Paytm?

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That’s where CRED’s value proposition lies. When you pay your credit card bill through CRED, you earn “coins”, equal to the bill amount paid. These coins can then be redeemed for various premium lifestyle products & services, such as Uber, Amazon, Flipkart, Cult.Fit and many more. Here are a few rewards currently live on the app

Cred Rewards
Rewards Offered on CRED

That’s not all.

CRED also offers a feature called ‘CRED Protect’ that flags suspicious transactions, including various bank charges that credit card companies levy and which go unnoticed if you don’t go through your bill in detail.

It also offers a feature called ‘Smart Statement’ that tracks your expenses and puts them under various categories such as Shopping, Travel, Dining, etc.

For both these options to work you need to link your Gmail account that gets the credit card online statement with the app.

This sounds like something I can use! How do I get started?

CRED is restricted to people with a high credit score of over 750. When you sign up on the app it pulls your Credit score from Experian/Crif (credit rating agencies, similar to Cibil) and if your score is above 750 it lets you create your account.

Follow these tips to improve your credit score.

To reinforce its goal within the company, Cred only hires people with high credit scores.
“Every single team member has a credit score of higher than 800. We had to reject 20% of the people we interviewed (at the top) because their credit scores were too low,” said Kunal Shah in an interview.

On-boarding Steps Are Quite Simple:

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  1. Install the app on your phone (install using this link to get a free Uber ride)
  2. Signup with your mobile number that is linked to your credit card.
  3. The app then verifies these details with the RBI to fetch your card details. If your credit score is above 750, you get access.
  4. You can add as many credit card as you have, as long as they are linked to your mobile number.
  5. Verify each card by filling in the missing digits of the credit card number. The app will then ‘credit’ your account with Re 1 for confirmation.

You also get one ‘coin’ for every point on your credit score as a joining bonus. For instance, if your credit score is 750, you get 750 CRED coins.

Once you are on the app, you can see all your credit cards listed under the tab called ‘Cards’, with details of the outstanding amount, due date and an option to pay the bills. The ‘View Details’ option against each credit card gives a breakdown of your spending patterns across various categories like travel, food, shopping, etc.

When you pay your bill through CRED, you earn one ‘coin’ for each rupee that you spend. So, if you pay Rs 5000/- you get 5000 CRED coins. There are many premium offers that you can avail using these coins. Here are a few that I have redeemed in the past:

Cred Claimed Rewards
CRED Rewards Claimed By Me

All that is good, but what about privacy and security?

CRED asks for permission to read your emails for ‘CRED Protect’ and ‘Smart Statements’. This is an optional feature and if you are not comfortable giving access to your emails to a third-party app, you can choose not to enable this feature. Note that CRED claims that it does not access any other email than statements for the credit card.

As for the security of your data – which includes your credit card details – CRED uses a secure connection using 256-bit encryption to safeguard your data and transactions. You can protect the app using any of the available screen locks that your phone provides – passcode, pattern, fingerprint or Iris.

Ok, but what’s in it for CRED? How are they making money?

That’s a very interesting question.

It is very unlikely that credit card users will be open to pay a commission to CRED to use its platform. So, the probable revenue stream could be from the merchants, who may pay CRED a commission for generating leads from middle and upper-middle-class folks – these are the folks who use credit cards and have a good credit score.

However, the number of such users will be quite low.

as per RBI data from Dec 2018, India has ~44M credit card users.

Of these, users with a credit score of 750+ will be a small percentage. So, this number might not be enough to generate a high revenue stream.

The other possibility is that with access to deep information about individuals’ spending habit, CRED can, at a later stage, build a far more sophisticated and personalized fintech solution than what exists in the market currently. But that will take a few years if not more.

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Meanwhile, if you’re still not on CRED, download it now to get a free Uber ride.

Share your experience of using CRED in the comment form below.

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