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Tuesday, September 28, 2021 at 1:03 AM

A credit card is the newest fintech startup, and it's taking on the major banks.

Cred. ai, a fintech start-up headquartered in Philadelphia, has launched a new banking platform for millennials that includes a solid metal credit card and a goal to disrupt the banking industry.

The platform, which is backed by high-profile investors such as John Legend and former AOL CEO Tim Armstrong, debuted its Unicorn Visa Card and app in beta on August 6 and intends to open applications to all customers in early Fall. While some of cred. ai's supporters are in the beta, the project's creators are focusing on two groups that inspired the project: banking newbies and younger Americans who are skeptical of the financial system.

Cred. ai is hoping that its unique Credit Optimizer tool, which has been developed to help users establish credit fast, will be a selling feature for newcomers – from recent college grads to people previously unable to qualify for credit cards.

According to cred. ai co-founder Ryan Brown, the credit-averse demographic, which is mostly made up of millennials and Gen Z, need new tools to overcome their reservations and redefine their credit mentality.

Brown says cred. ai's primary difference when compared to other fintechs coming into banking is their AI-enabled credit optimizer tool, but competition is intense, well-funded, and increasing among both start-ups and some of the world's biggest businesses.

Chime, a fast-growing online bank that was rated No. 25 on the CNBC Disruptor 50 for 2020, just announced the introduction of its Credit Builder Visa Credit Card. Chime claims it helped customers boost their credit ratings by 30 points throughout the test period by sharing on-time payments with credit bureaus.

In June, Apple launched its Path to Apple Card initiative, which gives Apple Card applicants who have been denied a card ways to improve their creditworthiness. The tech behemoth, which collaborated on the card with Goldman Sachs, faced a public relations nightmare as a result of the card's debut and several high-profile application denials. The card has been dubbed the "most successful new credit card ever" by both Apple and Goldman Sachs.

The optimizer function of Cred. ai uses an algorithm to influence a user's debt-to-credit ratio, which may account for up to 30% of a FICO score. The system is flexible, allowing for some variation in a user's credit limit.