Tomo Credit Card – Is this Card Still a Viable Credit Building Tool?

The Tomo Credit Card burst onto the financial scene a few years ago as an innovative new option aimed at helping consumers with poor credit or no credit history establish and build credit.

With unique qualifications and underwriting standards not tied to credit scores, it presents an opportunity for many who may struggle to get approved for traditional credit cards.

However, recent changes have altered the landscape. The card now charges fees and no longer offers rewards on spending. Additionally, it was placed on a waitlist in early 2024. What does this mean for the Tomo Credit Card, and is it still a viable tool for building credit? Let’s take a quick look.

An Overview on the Tomo Credit Card

The Tomo Credit Card is issued by Community Federal Savings Bank and operated by San Francisco fintech startup TomoCredit. It launched in 2021 with the goal of serving as a credit-building tool specifically tailored to those with limited credit histories.

Unlike most credit cards, TomoCredit uses alternative data points in its underwriting model instead of relying solely on credit reports and scores. This allows it to approve applicants that traditional issuers may deem too risky.

Initially, the card charged no fees and even offered a modest 1% cash back rewards rate. However over the past couple years, the situation changed significantly leading to questions around the card’s long-term viability.

The Shift to Charging Monthly Fees

One of the biggest alterations made to the Tomo Credit Card was the introduction of monthly “participation fees” in 2023. Cardholders now must pay $2.99 per month to keep their account open. This totals almost $36 per year.

When the card first arrived on scene, no such fees existed. So this marked a clear shift likely aimed at enhancing revenue and profitability for TomoCredit. However, it also decreased the unique value proposition of the card itself.

Many other credit cards designed for those looking to build or rebuild credit often charge annual fees. So unfortunately this move brought the Tomo Credit Card more in line with competitors rather than setting it apart.

The Removal of Cash Back Rewards

In addition to newly implemented monthly fees, the Tomo Credit Card also eliminated cash back rewards for purchases in 2023. It previously offered a 1% return, which provided at least some incentive for usage.

Without any rewards for spending, the card loses another selling point over traditional building credit options. Most other cards in this category offer at least modest rewards, usually 1% to 1.5% back.

While rewards may not be the priority when trying to build credit, they provide tangible value to cardholders. Especially when having to pay an annual or monthly fee. The removal of this feature further detracts from the uniqueness of the Tomo Credit Card.

Limited Perks Via Mastercard

Lastly, while the Tomo Credit Card no longer directly offers rewards on spending, cardholders may qualify for various perks through the card’s payment network, Mastercard.

These can include promotions like discounted Lyft rides, special deals through DoorDash, access to Mastercard’s ID Theft ProtectionTM program and more. However, many competitors offer similar ancillary benefits.

So ultimately the Tomo Credit Card still provides uniqueness and value in its central functions as a credit builder to stand out in the field rather than depending heavily on periphery rewards.

The Waitlist and Account Freezes

More recently in early 2024, TomoCredit placed the Tomo Credit Card on a waitlist for new applications. So at this point it is not possible for most consumers to apply and get approved.

Additionally, some reports indicate that Tomo froze spending capabilities for a subset of existing users. Although the company still claims these accounts continue to be reported to credit bureaus.

TomoCredit says this freeze and waitlist are temporary as it prepares to launch a new product. However, the situation casts further doubt about the availability and long term place of the Tomo Credit Card in the broader market.

If the card remains viable but sees functionality limited or restricted for certain customers, it greatly reduces the potential benefits. Since building credit revolves heavily around responsible account usage over time.

Key Qualification Factors and Requirements

If and when the Tomo Credit Card opens back up to general applications, who can qualify? And what hoops must applicants jump through in order to get approved?

As covered, one of the card’s hallmarks is evaluating individuals beyond just a credit report or score. TomoCredit uses proprietary technology and algorithms to weigh various data points and assess risk differently than traditional models.

However, the card does still come with particular requirements. Most notably, applicants must link a bank account so Tomo can analyze assets, balances, income streams and more.

While no hard credit check takes place, providing this financial information grants similar access and visibility. Other key qualification factors can include your phone number, email address, IP location when applying and more.

So approval is not guaranteed by any means. But TomoCredit claims capable applicants can receive surprisingly high limits, up to $10,000 in some cases. Of course, carrying and maintaining a credit utilization below 30% remains important for optimal credit building.

How to Apply for the Tomo Credit Card

Currently the Tomo Credit Card is not accepting applications and has a waitlist. It is unclear when they will reopen applications.
When applications were open, you could apply directly through the TomoCredit website or mobile app.
To apply, you need to provide personal information like your name, address, date of birth, and social security number (if you have one).
You also must link a bank account so Tomo can review your income, assets, and account balances as part of qualification.
There is no hard credit inquiry or credit score requirements. Tomo uses alternative data to assess applicants.

Tips to Login into Your Tomo Credit Card Account

If you are an existing Tomo cardmember, you can log into your account through the TomoCredit website or mobile app.
To log in you need your username and password that was set up when you were approved for the account.
In your online account you can check your balance, review statements, make payments, manage account alerts and notifications etc.

Is this Card Still a Viable Credit Building Tool?

In the few short years since its debut, the Tomo Credit Card underwent multiple significant adjustments that reshape its value proposition compared to other credit building products. With newly added fees, eliminated rewards and current restrictions limiting applications and account usage, its viable lifespan remains unclear.

However, the core of its mission remains building credit for those with limited histories via alternative underwriting models. So if it can move past current speedbumps and reopen its doors with renewed purpose, the Tomo Credit Card still offers differentiated approvals and utilitarian benefits worth considering.

Especially if other poor credit or no credit options have proven fruitless, when available it presents low risk. Just account for the monthly fees and balance building credit vs perks or rewards.

For the time being, consumers interested in the Tomo Credit Card must join a waitlist with an uncertain outcome. And some existing users face account limitations. Still, TomoCredit insists new products are coming which may replace current offers.

Ultimately credit building consumers must weigh alternatives like secured cards or prepaid options too in case Tomo cannot deliver ongoing value long-term. Either way, make sure to use whatever tool you choose consistently and responsibly.