Established in Oakland, California, by three finance professionals who saw the need for a better solution to the current credit card system, Grain is a mobile app that offers digital revolving lines of credit. But instead of relying on your credit rating, the platform considers your cash flow when generating your credit offer. Grain is currently available on the App Store for anyone with a U.S. checking account.
What is Grain?
Grain is a credit card alternative that syncs with your existing debit card. The line of credit you receive can be accessed through your debit card with instant transfers, and you can use the funds to make payments or everyday purchases. This way, you can build credit with every purchase without going deep into credit card debt. You can also use Grain to spot you if you don’t have enough funds in your bank account to complete a purchase.
How Does Grain Work?
Like the idea of building your credit score even if you don’t have a credit card? Most people avoid credit cards because of the high-interest rates, the tendency to get into bad spending habits, and the high credit score requirements issuers use for their best cards. Grain can help. Here’s a simple breakdown of how this credit card alternative works:
- Step 1: Download the mobile app. Grain works with over 10,000 banks.
- Step 2: Sync your existing checking account with Grain. You’ll receive a pre-approval for a line of credit within minutes. There’s no hard credit check, so you won’t have to worry about it impacting your credit score.
- Step 3: Instantly transfer funds from your digital credit line and use your current debit card to make purchases.
Grain Features
Instant Transfer
Don’t have enough money in your bank account for an upcoming purchase? Overdraft fees aren’t fun, but Grain users don’t have to worry. You can make real-time transfers from your revolving line of credit to your checking account. Doing so allows you to borrow the funds you need to make purchases right away if you’re running low on cash.
Auto-Pay
Grain customers are enrolled in Auto-Pay from inception. But instead of the funds being pulled from your account on your due date, Grain analyzes the cash flow in your linked account to determine when to draft your minimum payment (prior to the due date to ensure your payment is on time). To avoid overdraft, it will not draft if the remaining balance in your linked account is less than $10 after drafting the minimum payment. You can opt out of Auto-Pay and manually make the minimum monthly payment by the due date to avoid a late payment penalty.
Credit Tips
You can view your current credit score on the Profile tab of the Grain app. It’s updated monthly, and you’ll also find credit tips on the profile tab of the app to help improve your credit rating.
Credit Line Increases
The maximum credit limit is $1,000. However, you may be eligible for increases after six months of responsible use and timely payments. The credit limit determines how much you can spend, and a higher credit limit can help you build good credit. That’s because a higher credit limit improves your credit utilization ratio, a component that makes up 30% of your credit score.
Credit Reporting
All of your day-to-day purchases add up. Grain reports your account activity as it was on your most recent monthly statement to the major credit bureaus. This allows you to build credit with a debit card. One of the weaknesses of using debit cards is that they don’t build credit, but Grain solves this issue. Grain can be a good option if you want to improve your credit score without relying on a credit card. Lenders look at credit reports before providing loans. Grain can help you qualify for a better mortgage or auto loan later down the road.
Benefits of Using a Grain
Grain makes it convenient to make everyday purchases with your digital line of credit using your current debit card. You don’t have to open a credit card which will result in a hard credit check. There’s also the risk of overspending on your credit card and getting stuck with a high-interest rate. This scenario is one of the decisive factors that makes some people feel more confident about using debit cards.
The app seamlessly integrates with your financial institution, and it’s easy to manage your account. Furthermore, you can manage your credit more effectively by only borrowing what you need to cover expenses. Grain has an auto-pay feature that helps you stay on top of your credit limit, and you can also make manual payments to trim down your debt further. In addition, Grain has a more forgiving 15% APR. Most credit card companies have interest rates hovering between 20% and 30% APR.
Grain also has a robust customer service team that can address your concerns. Their representatives can help you get set up with a line of credit and answer any questions you may have.
How Much Does Grain Cost to Use?
Grain assesses an APR of 15% on withdrawn funds if you enroll in Auto-Pay (or 17.99% if you’re not enrolled in Auto-Pay).
- Finance charge: 1% per withdrawal
- Late payment penalty: 5% of the minimum payment due or $5, whichever is less
Depending on your credit agreement, you may also be subject to a sign-up fee and service fee. Grain has more affordable rates and fees than most credit cards.
What Are Customers Saying About Grain?
- I desperately needed cash to pay rent and was searching for a paycheck advance app. I didn’t have much luck with that since all of them charged horrible fees, but then I found Grain. They extended a helping hand and gave me a chance to fix my credit. If I could give this app 10 stars, I would. I highly recommend it to anyone who needs a second chance to get out of a bad financial situation and rebuild their credit.—Mike Cin (App Store review)
- I was very excited when Grain began working with customers in my state. I live in Washington and have been trying for a few weeks. My application was approved in seconds for a real credit account. It’s unbelievable that these people are giving me a second chance. You should get this if you have a credit score of 600 or lower because most banks won’t work with you unless you apply for a secured credit card. Just make sure you’re responsible with your account and make your payment on time.—Germain Diop (App Store review)
How to Get Started with a Grain Account
Ready to add a credit line to your debit card, build credit, and avoid pesky overdraft fees? It’s time to get started with Grain. First, you’ll need a U.S. checking account, preferably the account that you use to receive income and make payments. Since Grain uses cash flow to determine your credit limit, it’s better to use your primary checking account. You will also need an iOS mobile phone or iPad to use Grain. To get started, download the mobile app from the App Store. If you’re an Android user, join the waitlist by entering your email address into the form found on the website.
Security deposits are required for select applicants. It is not based on your creditworthiness but on the cash flow in your checking account that was linked when applying with Grain. This parameter makes it possible for low-credit consumers to get a line of credit and repair their credit with day-to-day expenses.
