Arro Mastercare vs Credit One Visa for Rebuilding Credit

Executive Summary: Arro does not check FICO score

Both the Arro Mastercard and the Credit One Bank Platinum Visa for Rebuilding Credit are two unsecured credit cards that target people with bad credit scores. Credit One has been around for a long time and is the largest issuer of subprime credit cards. Arro is a newcomer to the scene and they differentiate themselves by not relying on FICO scores to approve you. Instead they rely on factors like your bank balance, income and cash flow to approve you. For those with really poor credit scores but have a decent income and positive monthly cash flow, Arro is the card you want to get your hands on.

What is Arro Mastercard?

Arro Mastercard is a rare subprime credit card that does not rely on FICO scores to approve you. Arro does not perform any hard inquiry on your credit report when you apply. Instead, they have teamed up with Equifax to perform a soft inquiry to get a baseline of your credit score. This soft inquiry does not impact your credit. What Arro requires is that you link your bank account to them via PLAID. This enables Arro to look at your bank balance, cash flow and more easily approve you even if you have poor FICO scores.

Arro comes with a $3/month fee. During the first year, there is an introductory fee of $/month. The APR is 16% (which is very low). Starting credit limit ranges from $50 top $200 but you can increase your credit limit and lower your APR by taking a series of financial literacy courses. Hence, your credit limit increase is totally within your control. You can get a maximum credit limit of $2,500 with Arro.

What is Credit One Platinum Visa for Rebuilding Credit?

The Credit One Platinum Visa for Rebuilding Credit is Credit One's card that targets rebuilders with FICO scores ranging from mid 500s to low 600s. The card comes with an annual fee of $75 during the first year. From the second year onwards, the fee rises to $99, which is paid monthly at $8.25/month. The starting credit limit is $300. Credit One does review your account for credit limi increases and you can get a credit limit of up to $1,500.

Similarities

The Arro Mastercard and Credit One Platinum Visa are similar in the following ways:

Both are suitable for people looking to rebuild their credit

Credit One will approve rebuilders who have mid to high 500 credit scores though most who are approved have scores close to 600. Credit One also approves people who have just been discharged from bankruptcy.

Arro will approve those with poor credit as long as they have a positive bank balance, income and positive cash flow. You do, however, have to link your bank account to them in order for them to verify your bank account.

Differences

Arro and Credit One is difference in the following ways:

Arro relies on non-FICO scores to approve you

Unlike most credit cards, Arro does not rely on FICO scores to approve you. Instead, they will look at factors like your bank balance, income and cash flows to determine whether to approve you. In contrast, Credit One relies on traditional FICO scores to approve you.

Arro has lower fees and interest rates

Arro has lower fees than Credit One. Arro charges a monthly fee of $3 which works out to $36 annually. In the first year, they have an introductory offer of $1/month which works out to $12 annually. In contrast, Credit One charges a $75 annual during the first year and a monthly fee of $8.25 (which is $99 annually) from the second year onwards.

Arro's 16% APR is significantly lower the Credit One's APR or any other subrpime credit card.

With Arro, you control your credit limit increase

While Credit One reviews your account for periodic credit limit increases, Arro allows you to control your credit limit increases. With Arro, you get credit limit increases by taking online financial literacy courses from their app. There are also courses you can take that will reduce your already low 16% APR.

Arro has higher potential credit limit

The maximum credit limit you can reach with Arro is $2,500 while it is only $1,500 with the Credit One Platinum Visa for Rebuilding Credit. Hence, you can get a higher potential credit limit with Arro than with Credit One.

Which is Better? Arro or Credit One?

After comparing both cards, I have come to the conclusion that Arro is the better card for a few reasons. Firstly, it has lower fees and APR and you can potentially get a higher credit limit that you could with the Credit One Platinum Visa for Rebuilding Credit. But the most compelling reason of choosing Arro over Credit One is that Arro does not perform any hard inquiries and rather than relying on FICO scores, they rely on factors like your bank account balance, income and monthly cash flow to approve you. You do have to link your bank account to Arro via PLAID when you download the Arro app and create an account. But you have a much better chance of approval than Credit One.

To sum up, if you are a rebuilder and looking for an unsecured credit card, I would go for the Arro Mastercard rather than Credit One.