Build Financial Confidence: Credit 101 for College Students and Their Families

Webinar Transcription

2025-08-28-Build Financial Confidence, Credit 101

Sam: [00:00:00] How many people do we have? RVP? 

Lydia: Uh, let me, I’ll have to open, I’ll put it in the chat. 

Sam: I’m just curious. 

Lydia: Hello everyone. Welcome to “Credit 101 for College Students and their Families.” I am Lydia Holland. This is hosted by Fizz, and I’m gonna be your moderator tonight. I’m a senior advisor here at CollegeAdvisor, and I’ve been with the company for about four years now.

Lydia: And in addition to advising students, I’m also a proud co-captain of our essay review team and a graduate of New York University. To orient everyone with webinar timing for tonight, we’re gonna start off with a presentation, then answer your questions in a live q and a on the sidebar. You can download our slides and start submitting questions in the q and a.

Lydia: As a heads up, we cannot give you personalized admissions [00:01:00] assessments or answers to specific financial questions. Um, but we will be answering general questions about how to navigate those things tonight. All right. I will go ahead and pass it on to our presenter. 

Sam: Hey guys. Nice to meet everybody. Um, glad to have you all with me.

Sam: Um, and yeah, so, uh, without further ado, let’s get started. Uh, tell you a little bit about myself, uh, to start. So, my name is Sam, Sam Lipscomb, as you can see up there. Um, I am product and operations lead over at Fizz. Fizz is a money app for college students and young adults. Um, we actually started as just a credit builder card, which we still have.

Sam: Um, uh, but we’ve since expanded into, uh, budgeting resources, personal finance resources, credit monitoring. All sorts of stuff. All the things that, you know, young adults and college students and really anybody could benefit from, from being well versed in. Um, [00:02:00] so yeah, uh, really excited to be here. And so, yeah, let’s, uh, let’s get started.

Sam: Um, and, you know, I actually wanna start with a, a, a story about credit. ’cause, you know, I, I think that’s probably one of the best ways to sort of illustrate all these points. But, so when I was, uh, in college, like before I learned anything about credit, uh, I had this experience that forced me to figure it out and really kind of led me to where I am today and led me to fit.

Sam: Um, growing up I was decently financially aware. Uh, you know, my, I was lucky enough to have parents who sort of taught me the value of money and, and taught me about how to think about my finances. Um. I thought I was pretty well set. I thought that I, you know, had sort of good head on my shoulders about everything.

Sam: Um, but, so I went to Kenyon College out in the middle of nowhere, Ohio. I graduated, I was 22 or 23, actually took a gap year. Um, and I was about to move into my [00:03:00] first real apartment in New York. Um, I wasn’t crashing on any couches or anything like that. I had a good job at savings. Um, you know, I felt like I was doing pretty well for myself.

Sam: Um, so I filled out my apartment application, found a really cool one. Um, and my application actually got denied. Uh, and it wasn’t because I didn’t have the money. I had a job. They knew that, um, it wasn’t because I had bad credit even, I just didn’t have any credit. Like I didn’t have a score. I didn’t exist in the system.

Sam: And. The thing was like, I wasn’t some reckless kid, right? I wasn’t racking up debt. Like unfortunately a lot of people do when they’re in college. The average college student graduates with over $3,000 worth of credit card debt. Um, you know, I paid my rent in college on time. I paid my phone bill. I used my debit card responsibly for everything.

Sam: Um, you know, I thought as long as I wasn’t being irresponsible, like, you know, what could really harm me, right? But what I [00:04:00] didn’t realize is that doing all those things just wasn’t enough. So, you know, at first obviously I thought it had to be a mistake. You know, I called my parents, um, you know, they talked about, uh, like co-sign credit cards, that type of thing.

Sam: Kind of barked up that tree and, and came to a bit of a dead end. Um, I called my bank. They didn’t really have anything for me and I was kind of begging, pleading with them, like, please help me with this. And they were kind of just like, I don’t know. Um, which maybe if I had gotten a better bank person, they would’ve told me something else.

Sam: But, you know, whoever I did talk to is, it was confusing. Um, it was just kind of one of those moments where, uh, people shrugged and they said, that’s just kind of how it works. You need to have credit in order to do certain things. Um, you know, but I consider myself pretty resourceful. So I did what anybody would do.

Sam: I went down the internet, rabbit hole articles, read it, YouTube, just kind of piecing together how the whole system works. Um, you know. It helped that I was a big travel nerd. I, you know, love planes. They [00:05:00] even have a plane tattoo right here. So I, you know, looked into how Miles worked ’cause I knew that was part of kind of the credit card landscape.

Sam: Um, but, you know, I, I was piecing together a ton of stuff, uh, you know, utilization, increase history, credit mix, whatever all that means. I had never heard of this stuff before, but it was clearly already affecting my life. I didn’t get this apartment that I really wanted. Um, but the more I read and the more I realized, like, this wasn’t really just about renting your first apartment when you graduate from college, um, you know, obviously, you know, things turned out fine.

Sam: I found a different apartment. Um, but it was about everything. It was about a car loan, it was about phone plans. It was even about some background checks for jobs, um, let alone wanting to get a mortgage one day on a house. Um, you know, it wasn’t just a bank thing that somebody else could worry about. Like it was baked into how all these different parts of my life and everybody’s life works and I’d [00:06:00] really kind of just ignored it.

Sam: Um, you know, so I was kind of sitting there frustrated that I was going through this. Um, because, you know, credit’s not a niche financial topic and everybody has, you know, everybody’s affected by, by credit in one way or another. Um, but unfortunately so many people just figure it out after they’ve already been burned, and oftentimes a lot worse than even I was.

Sam: So I decided I was gonna learn everything I could and just become kind of a guru, a whiz in all this stuff that’s due with credit, you know, not just for myself, but so that I can help other people figure this stuff out. And, you know, I’m proud to say that, you know, now I do have a credit score. Um, you know, I’ve worked hard at this.

Sam: I’m even lucky enough to help some of my friends with the same things. Um. But you know, it’s crazy ’cause you talk to other people and a lot of people have the same stories denied for car loans, um, you know, denied for their first credit card. So they just say, eh, I don’t need to deal with this. Um, you know, struggling to get apartments, you know, I’ve heard the job [00:07:00] horror stories, uh, you know, people using debit cards, people using cash ’cause they thought it was safer.

Sam: I thought I was more responsible not knowing it was hurting them long term. Um, so all that to say, you know, I’m excited to be here today to break down what the system really is, why it matters, how to set yourself up without getting caught up in all the usual traps. Um, I don’t wanna overcomplicate anything.

Sam: I’m just here to show you what I wish somebody had shown me a lot earlier. So, here’s a bit of a table of contents, but should flow pretty nicely today. I’m gonna talk a little bit about how credit works, why it’s important, um, how to build it responsibly, how to be a credit superstar, and then I’ll talk to a little bit about how FIS works too.

Sam: So. Let’s zoom out, right? What, what does credit really mean? Why does it matter so much? So here’s how I think about it. So credit is like a financial trust score. It’s your financial reputation. It’s not about how much cash you have setting, sitting in your checking account, although obviously, you know, if you have [00:08:00] a cajillion dollars, that’s nice too.

Sam: Maybe you don’t have to worry about credit. Um, but you know, if you’re like most people, um, like it’s not about how much cash you have sitting in your bank account. It’s not about how responsible you feel you are. Um, it’s about the number that lenders, landlords, car dealerships, cell phone companies, potential employers, uh, look at to decide like, can we trust this person?

Sam: Um, and the crazy part that people miss is that the trust literally costs you money. Like it changes what you pay for things. Two people that walk into the same car dealership both have the same background. It makes the same salary, the same amount saved. Um, buying the same car. If one has strong credit history and one doesn’t, like the person with strong credit history is gonna save probably hundreds if not thousands of dollars on that car loan.

Sam: It’s really as simple as that one gets a loan at 4% interest, one gets 15% or 20%, or they have to pay more money [00:09:00] down because they, you know, more of a risk. Right. It’s crazy. It really can mean paying thousands of dollars more just because you don’t have any credit. And it’s really, it’s, it’s not just cars, right?

Sam: It’s apartments. One person gets approved, one person doesn’t. Um, and you know, obviously it goes all the way up the chain to, to mortgages and much bigger loans and more impactful things like jobs, uh, in the future. And, you know, something I hear a lot from people that I talk to about this is that it doesn’t really feel fair and, you know, it’s not really about that, right?

Sam: Because I think you can make a case for sure that like the credit scoring system in the US is. Not perfect. Um, but it is the system, right? It’s designed to measure risk. Like if I don’t know who you are, I’m much less likely to lend you money than somebody I’ve known for 15 years and somebody who I know is gonna pay me back.

Sam: Right? And it really is as simple as that. It facilitates that type of gauging of trust between complete strangers like you [00:10:00] and your bank. Um, but you know, obviously the thing that is frustrating is like credit doesn’t happen automatically, right? You think that if you’re responsible, then everything’s fine.

Sam: Um, but it doesn’t build itself while you’re just living your life. You have to be really intentional and you have to start before it feels urgent. And that’s the trap, right? Like, you don’t necessarily notice credit until you need it. Unfortunately often by then, and I knew this experience personally, it’s too late.

Sam: You know, imagine planting a tree the day you realize you need some shade. That’s kind of what trying to build credit last minute is like. Um, so what I wanna do with you guys here today is talk about helping you plant that tree early so it’s there when you need it. ’cause even if it doesn’t feel urgent yet, your future self will.

Sam: Absolutely. Thank you. So let’s talk a little bit more specifically about how credit works. Like how does this [00:11:00] sort of trust score, financial reputation actually get calculated? Um, it’s not some entirely secret formula locked away in a vault somewhere, although credit reporting can sometimes be a bit of a black box.

Sam: Um, when you’re looking, you know, really nitty gritty specifics as to why your score went from a. 7 0 1 to a 7 0 2 or something. Um, but it is, it’s a system. It has specific pieces. You know, there are specific inputs, specific outputs, and you can gauge things pretty well. And as I’ll talk about later on, um, it’s pretty easy to game the system.

Sam: And by that I don’t even mean doing anything dishonest. I just mean it’s pretty easy to work within that system and show people through great credit that you are somebody that they should lend to. You’re somebody that is financially trustworthy. So the other thing, and before I get into the specific factors, is to remember that you can’t just max out one single stat and ignore the [00:12:00] others, right?

Sam: Like all of these credit factors are really important. Um, but let’s walk through these one by one, because obviously some are more important than others. So payment history is far and away the most important credit score factor. It’s 35 plus percent of what makes up your score and it really just answers one question, right?

Sam: Do you pay on time missing? Even a single payment due date can hurt your score for years. Um, you know, they typically stay on your credit report for seven years. And I mean, right? Just to get back to the idea of a financial reputation, you know, everybody knows the case with your reputation in general is that, you know, it can take years to build up a good reputation, but you can ruin it in an instant.

Sam: And it’s the same thing with credit. You know, you can make a hundred on time payments, but one missed payment is really gonna hurt you. So consistency matters. You really wanna make sure you’re always paying on time. That’s huge. Next is utilization. So [00:13:00] this is also called credit utilization. Maybe something you’re familiar with, maybe you’re not, but you wanna think about how much of the available credit you have.

Sam: That you’re actually using, if you have a thousand dollars limit on a credit card and you’re consistently using right up to that a thousand dollars lenders see that as risky. They say, oh, this person really needs the, the credit that we’re giving them. Um, you know, even if you pay that balance off every single month, right?

Sam: Like that’s still sending funny signals. It’s not quite what we would call a derogatory mark. Like it’s not a missed payment or a bankruptcy, but it’s the type of thing that can make your score fluctuate significantly. The best practice really is to stay under 30% Credit utilization under 10, even closest to zeros possible is, is beneficial.

Sam: And, you know, hopefully I’m not confusing anybody, but to get even more specific about credit utilization, I say again, it’s not a derogatory thing. And that’s because in theory it’s designed to measure [00:14:00] how, uh, like. How much you need the credit you’re being given. So a way that you can kind of, uh, credit utilization is pretty fungible, is that if you pay off your credit cards, you know, every few days or once a week and make sure that balance never gets too high, then the only number that’s reported is the number that is on your statement when it closes at the end of every month.

Sam: So because the stat is built to basically control for somebody who doesn’t have the ability to do that, if you’re able to pay your credit card down, it’s a great idea. ’cause it can keep your credit utilization level. Sorry, I hope I didn’t confuse anybody there. Length of credit history is another important one.

Sam: Lenders really do trust people with longer track records. That’s why starting early matters, right? Starting as soon as you turn 18, as soon as you go off to college. It’s a really good idea from your credit score perspective, but also just from general financial literacy perspective. Um, and even if you’re not borrowing, like having an open account that’s been around for years has [00:15:00] helped some people.

Sam: This, you know. Uh, there are other reasons to use a credit card, security rewards. Um, but even if you just open a credit card and use it once every couple months and stick it in a drawer for the rest of the time, that can still really help your credit. Um, just by way of length, credit history. The other two smaller credit stats, one of which is more familiar to people, one which is less are credit mix and inquiries.

Sam: Uh, inquiries I think are, are a bit more of like, kind of a, a buzzword almost is like, this is, we call a hard credit poll. So when you go apply for a loan or a credit card, most companies do a hard credit poll. Asterisk does, does not do that, but we’ll get more to that later. Um, and then credit mixes. What, how many different types of loans do you have?

Sam: Do you have car loans, mortgage, credit cards, personal loans, student loans? Um, in theory, the more of these that you have, the better. But credit mix is not a very big factor. It’s five or so or 10% of your [00:16:00] credit score. So. Not something to worry about, um, too much. But yeah. So again, like, you know, for a real life example, like say you have a $500 limit, you put $400 in your card each month and you’re not paying that off or constantly, like credit system sees you as using 80% of your limit, which, you know, can make your score drop.

Sam: Um, so paying really helps. And, you know, it’s like, it’s really important to remember that these things are, are not designed to, to trip you up, right? Like, it’s very easy to look at this and say, oh, this is kind of bs. Like, why am I being forced to do this type of thing. Like, there are reasons why the system is built out like this.

Sam: And if you can afford to play with, play the game and sort of, you know, stay on top of your stuff and make sure that, you know, everything’s working smoothly, uh. It can have a huge outsized effect on your credit score. And just like, you know, that [00:17:00] general financial reputation. Um, yeah. So, you know, again, like you don’t want credit turned into a full-time job that you have to manage constantly, but just, you know, sort of thinking about some of these better habits as being background, just sort of autopilot stuff, um, is really important.

Sam: And honestly, it’s part of why we built fizz, but, you know, I will, I’ll get back to that. So let’s talk a little bit about some, um, common traps, right? So people do get it wrong, right? It happens like happened to me, happens to a lot of people. Um, the common myth, the traps, the stuff I wish somebody had called me out for early on are probably mainly like these four things.

Sam: And I, I won’t say that I felt victim to all of these, but they’re definitely ones that I hear a lot. So. The number one is my debit card helps me build credit. Um, or even more com [00:18:00] or more commonly, my parents’ credit card helps me build credit. So your debit card, a normal bank issued debit card that just is an automatic draw directly from your checking account, um, does not help you build credit.

Sam: Uh, no matter how often you use your debit card, it’s not gonna affect your credit score. Um, fizz is a debit card. It’s a different type of debit card, but your debit card that’s issued by your bank is not gonna do that. Um, the other one obviously is, like I just said, is the authorized user, my parents’ credit card thing.

Sam: Um, this helps a little bit, right? Uh, but it’s really not a complete fix. Uh, being an authorized user depends on somebody else’s habits. They might miss payments or max out the card that can reflect on you. Um, but more importantly, uh. It’s the fact that lenders don’t give authorized users like the same weight as you having your own primary account.

Sam: Um, you know, like your credit profile is more than just your score. And when somebody looks at it, they’re seeing, oh, this person’s an authorized user on a [00:19:00] couple of cards. They’re not seeing that this person has their own cards or their own accounts. And that can hurt you in the long run because you know what’s more trustworthy?

Sam: If somebody says, yeah, my parents are really good at paying people back, not necessarily me or somebody saying, no, I actually have the record to paying people back. Obviously the latter is preferable there. Um, another one interesting one that I hear a lot is paying my card early hurts my score. Um, or, you know, similar to this is like I have to spend a certain amount on my credit cards every month, or my score will suffer.

Sam: Both are total myths. Paying early is smart. Paying often is smart shows you’re on top of things. And you know, really the only thing that matters when it comes to this type of thing is whether your payments show up on time in the official record. And if you pay them on time, they will. Um, so, you know, really important to remember.

Sam: Same thing with, you know, how much money you spend on your credit card, as long as you’re paying it off. And, you know, preferably more often than [00:20:00] not, you’re gonna be, you get the security of a credit card, um, you get the rewards of a credit card, you get the credit building of, of a credit card. It’s really, you know, there’s, there’s no reason not to use your credit card, um, for lots of purchases as long as you make sure you’re paying it back.

Sam: And the last one would be, oh, I’ll just get a secured card. And similar to the authorized user parents credit card discussion, um, they work, but they come with a couple catches, right? They tie up your money, you have to put down big deposits. And I know they are a handful of cards out there. Um, that actually like, make you close the account if you want to get your deposit back.

Sam: Some will allow you to graduate to an unsecured card after a little while. Um, but you know, it’s, it’s not really a guarantee. And also you have to lock up your money. And on top of that, having a secured card is kind of the same as authorized user. Like you’re just not seen in the same light as if you have your own unsecured loan.

Sam: Um, so [00:21:00] those are good things to remember. But really, if I had to put like a bow on all of this and say like, what the biggest trap is, is, is waiting, right? It’s like waiting for that tree to grow or waiting for waiting until you want shade to plant the tree. People think they’ll figure it out when they really need to, but that’s again, like waiting, um, until you’re late for your flight to start packing or something like that.

Sam: It just doesn’t work. Um, credit should be building it quietly in the background. Um, you wanna set it up early so it’s ready when life throws something big your way, like a new apartment, car, mortgage. And the sooner you start the easier it is and the less stressful those big moments, big life moments feel.

Sam: So let’s talk a little bit how to be a credit superstar. So, I don’t know if you guys are getting the sense from me, but I hope not. Uh, people tend to make credit way scarier than it needs to be. Um, I’ve had friends come to me stressing out whether checking their score is gonna ruin [00:22:00] it or if putting Netflix on auto pay is like the wrong kind of bill or something.

Sam: You know, stuff that just doesn’t even make sense, right? But it’s fair, right? Like this stuff doesn’t really get taught in schools. Um, it’s not necessarily common knowledge. Not everybody has my, had my experience where, you know, they’re taking the time to kind of become an expert in this stuff. People obsess over the little things.

Sam: And honestly, that’s just the fastest way to burn yourself out and not actually figure this out and help it work for you. So, you know, the truth is, becoming a credit superstar is really about mastering a few simple moves and then just letting time and consistency work in your favor. So number one, start early.

Sam: Again. It’s like planting a tree. The best time to do is years ago. The second best time is right now, um, big part of your score. It’s just how long you’ve been in the system. Um, you know, not only because length of credit history matters, but also more and more on time payments really stack up. Um, if you wait and start until wait until you’re [00:23:00] 28 and 30 to start building credit, you’re playing catch up.

Sam: But if you start, when you’re in college and you’re 18, 19, 20, you’ve given yourself the long runway where small, steady habits add up to something powerful and you’re not stuck in this sort of area where you’re asking, what can I do right now? To make my credit jump 60 points. ’cause the answer to that usually is time.

Sam: You have to wait and when you need credit, that’s not a good answer that you want to hear. Um, you know, but starting off, it doesn’t have to mean opening up 10 different credit cards. You know, it can literally be one account. Use it consistently. That begins to tell the story. That becomes your financial reputation.

Sam: Number two, be smart and keep learning. I really think this is something that gets understated. Like you don’t need a PhD, you don’t need to work in finance to be good at this stuff. Um, you don’t even need to know all the formulas. Like, you don’t need to know that paying your bills on time is 35% of your credit score, [00:24:00] right?

Sam: It’s unnecessary. What matters is that you understand the big levers, like you’re just that payment history is important. How much of your credit you’re using affects your score, how long your accounts have been open, managing different types of credit, your hard inquiries, um, you know. But really, I mean, it’s the on-time payments that are more important than anything.

Sam: If you really wanna simple it, simplify it. But once you know those basics, you can see how each decision you make. You know, like having your statement closed with a $500 balance instead of a $5 balance, you know, shows up on your report affects your, your reputation. And really the, you know, the real magic is the more you pay attention, the more natural it becomes.

Sam: I’m testament to this, like, at first you’ll have to think about it, but eventually it’s just gonna become second nature. It’s like brushing your teeth. And the third one would be again, and I, we said this a million times, pay on time and pay in full. Um, the biggest thing that you can do to hurt your credit is missing payments.

Sam: Um, the biggest thing that you can do to [00:25:00] hurt your financial prospects is to not pay in full and carry a balance and have to pay interest. Um, you know, a lot of people who get into trouble with credit card debt are not really missing payments. They’re saying, oh. You know, I have a $2,000 credit line. Yeah.

Sam: I can afford to buy that shirt. Yeah, I can afford to go out to dinner. And then they get to the end of the month and they’ve spent $2,000 and they say, wow, I only have $800 in my bank account. I don’t know how I’m gonna make this work. So they pay the minimum, they pay as much as they can, and then by the end of the year they have a massive balance on their card and it’s accruing interest at insanely high rates like 30% per year.

Sam: And you get buried under a mountain of debt. So if you make sure you’re paying on time and in full, like it’s the cheat code, like if you always do these things, you’ve already solved like 80% of the puzzle. Like late payments are really the single most damaging thing you can do to your credit and interest is how you can just end up in a [00:26:00] death spiral.

Sam: Um, obviously it doesn’t mean that like slip ups won’t happen, right? Try to avoid them obviously. But if your default is I pay my bills on full, in full and on time, like. You’re gonna be golden.

Sam: So now let me talk a little bit about fizz before, uh, I open up the floor to questions. So I joined Fizz about three and a half years ago. Um, and it’s a really awesome company to work for because, and I’m sure you can get this just based on the talk I’ve given, right? Uh, it’s very near and dear to my heart.

Sam: The problem that we’re solving, um, you know, we started out just with the Fizz card, right? Um, and that was helping people build credit while they were in college. I think if it had been easier for me to get a credit card when I was in college, like if I had had fizz when I was in college, I might have done it and I might have not been in [00:27:00] that position that I was in, um, you know, when I graduated.

Sam: So. Most, you know, I’ll give you some comparisons, right? Most, most credit products out there make money when you mess up. Like that’s the entire business model. You know, they rely on people forgetting to pay on time, forgetting, not paying in full. They rely on giving big credit limits so that people spend more than they can afford to pay back, and then they get stuck paying interest.

Sam: They get stopped paying overdraft fees, late fees, all that type of stuff. There’s a lot of negatives that can come along with a credit card. Obviously, as we’ve talked about, if you use it responsibly, you don’t have to sort of be victim to any of those things. But credit cards come with a lot of negatives.

Sam: Um, and that’s what makes fizz different is that essentially what we’ve done is we’ve taken all of the good parts of a credit card, stripped out all the bad parts, and given you fizz, given you the Fizz card. We make money [00:28:00] through a membership fee. And we make money through interchange, which is when you swipe your card, you know, anywhere Starbucks, Starbucks has to pay like 3% of that purchase to MasterCard or Visa or whoever it is.

Sam: Uh, just sort of as the, the privilege of being able to accept the card. So that’s where we make money. We don’t charge interest. We don’t even have interest rates. We don’t charge hidden fees, like overdraft fees, late payment fees, any of that. It’s easy. You pay a monthly fee, no interest, no hidden fees, no tricks.

Sam: The good parts right are that Fizz reports just like a credit card. So it’s an unsecured line of credit in your name. Um, you know, you’ll swipe it or, you know, swipe it like you would use your normal debit card or use it like you would use cash. But instead of creating debt, you know, it, it pulls payments directly from your bank account to keep you from going into debt.

Sam: So that’s kind of the, you [00:29:00] know, the, the three big things to, to remember of this, I would say are these, which is one we operate on a daily payment cycle. So most credit cards, you can set them to auto pay and it’ll pay ’em off for you once a month. That doesn’t really solve this problem that credit cards create, which is overspending.

Sam: Um, you know, again, credit cards rely on you spending more than you can afford to pay back, being stuck, paying interest, just getting underneath that mountain of debt that we’ve talked about. So, with Fiz, you don’t have that same issue because with our daily Autopay feature, if you go out and spend a hundred dollars today, that a hundred dollars is withdrawn from your bank account.

Sam: At the end of the day, you’re starting every next day with a $0 balance on your card, an accurately reflected checking account. Just like if you’re using a debit card, but you’re building credit. The second thing is that we give you a credit limit and a spend limit based on how much you actually have in your bank account.

Sam: [00:30:00] So if you only have $200, our mindset right, is you shouldn’t be encouraged to go out and spend $600, right? You should only be able to spend what you can afford to pay back in the moment. ’cause again, that’s how people get into trouble. Um, and so those are really the two big things that, that set fizz apart.

Sam: Um, and you know, it’s, it’s really just as simple as that. Like it is credit building automated and, and safe. There’s no interest, no risk of overspending. Um, you know, no lockups, no co-signers, you know, nothing like a secured card. And you know, you just takes the stress out of things. You know, we built fizz ’cause we kept seeing the same pattern.

Sam: Over and over, you know, smart and responsible college students, young adults, people in general, just getting stuck, getting kind of screwed over by a system that like, they weren’t really trained [00:31:00] to understand, like, we’re not taught this stuff in school. Um, you know, and a lot of people, you know, it’s people are not reckless, right?

Sam: Not everybody’s reckless who gets into trouble with credit, um, and debt. A lot of them just didn’t know the system or didn’t have the right tools. Um, so Fizz really makes credit building something that you don’t have to think about. You set it up once, let it work quietly in the background. We focus on everything else.

Sam: Um, and that’s really why we exist. You know, not some giant bank trying to squeeze every penny out of you. Um, you know, obviously we’re still a business, but we’re in business for you and I think that’s really cool. Um. So the thing I wanna leave you with today before questions. So I want you to picture yourself five years from now, you’re applying for your dream apartment like I was.

Sam: You’re financing a car, maybe, um, maybe you’re even setting up a business credit line. If you wanna start your own business, you’re getting a phone plan, you’re getting a dream job with good credit. All of those things smooth. No [00:32:00] stress, no fees, no awkward conversations, no head banging, talking to your bank on the phone.

Sam: But without it, you get higher interest rates, extra deposits, co-signers. You get denied outright for things and that’s why this matters. Like, not ’cause credit is some fun hobby, although I will say I do have fun with the points and miles side of it. Um, but because it’s a quiet system running in the background of your adult life, you set it up now or you pay for it later.

Sam: And most people wait until they hit a wall, until they get denied, until something really costs them. And you don’t have to be that person. You can do this today while things are calm, while you’re still figuring everything out and getting your feet underneath you. And whether you use fizz or not, and I hope you do and do think it’s the best.

Sam: Um, I really mean this. Get started. Make this the thing you check off of your list today or before you go back to school or before the end of the year. [00:33:00] Thanks for hanging out with me. I’m Sam, appreciate you guys time and yeah, would love to hear any questions anybody has.

Lydia: Great, thank you so much Sam. Uh, I know that was really informative. Well, I think you busted a lot of myths that people may have about credit, uh, in your presentation. So one question that we have is, what is the difference between a credit score and a credit report, and why do students need to know what is included in both of those things?

Sam: Well, in terms of why you need to know what’s included, I think it’s just helpful to understand stuff that affects your life. Right? Um, at the end of the day, you really can just think about it as paying everything on time and in full. Like if somebody said, I’m only gonna take one lesson from credit class, Sam, nothing else, I would say, all right, fine.

Sam: Just pay on time and info. Um, but you know, it’s good to know how these things [00:34:00] work, right? It’s, it’s good to know that, you know, because you see a small drop in your credit score after you apply for a new card, that that’s not the end of the world. That’s a hard inquiry. They go away in two years and also they’re very, very minimal.

Sam: And also a five point drop in your credit score is really not gonna be the difference. Anything meaningful. Um, now the difference between a credit score and a credit report, it’s a good question and it’s one that I get a lot. And basically the same thing. A credit score is really just a numerical representation of what your credit report says.

Sam: So, you know, if you’re applying for a credit card, maybe if I’m applying for a credit card, right? Like I already have credit history, I have a good credit score, like I’m not high risk, uh, if I go apply for a credit card right now. Good chances. The bank who’s running my credit is just gonna see the score and I’m gonna meet a certain criteria and you know, I’ll just go to sort of like the approved pile based on my [00:35:00] score.

Sam: If I were to go tomorrow to the bank and say I want a mortgage ’cause I wanna buy a house, they would pull my full credit report, my full credit profile, they would see all of my accounts, they would see all of the balances on these accounts. They would see all of my credit history ’cause they would want to get a really good portrait of what my financial reputation looks like.

Sam: Um, so, you know, if it’s just a sort of fleeting glance at like, oh, you know, does this person, you know how good’s their credit, you know Yeah. Credit score might suffice, say oh seven 50 and above, like, that’s all we really care about. But the credit profile is what underlies all of that and is oftentimes what lenders are gonna look at when they’re deciding whether or not to lend you money.

Lydia: And how long does it usually take for a student to get their first credit card and start building their credit history? Like, how quickly could they expect that first credit card [00:36:00] to start actually paying me when it comes to building their credit score? 

Sam: It’s a good question too. I mean, so, and, uh, this isn’t just for fizz, although it is true for fizz, you can get your first credit card in less than five minutes.

Sam: Um, you know, a lot of the people that I work with, friends of mine, you know, I’ll be like, you should, you should get started with this, you know? And I’ll be like, all right, all right. Maybe this weekend, like I gotta sit down and do it. Like literally you could do it right now. So really it does not take very long in terms of getting your first card and then seeing your credit score.

Sam: ’cause if you don’t have a credit score and you go on Credit Karma right now, and you try and look at what your score is, it’s probably just gonna return an error or something blank for you. Um, in terms of seeing the effect of a new account on your credit score starting out, it typically takes six months.

Sam: Can be a little bit more than that, but six months is usually the standard. Um, you know, most of the people, myself included, that I talk to, it’s six months. After six months, you’re able to [00:37:00] start seeing your score. And usually you’re starting a little lower, right? ’cause you’re new. Um, but it’s that six months that, that you really wanna be on the lookout for.

Sam: Once you already have one card and you’re getting the next one, you’re getting other lines of credit. They’ll show up on your credit report within a month typically, and start sort of affecting that reputation, your credit profile. Um, but yeah, six months as you’re just getting started.

Lydia: Got it. And if a student for, for some reason, didn’t make a payment from their credit card, maybe they just forgot. Or maybe they got an over their head, spent more money than they had in their bank account, like you mentioned. What is the best next step for them to take to get their credit back on track?

Lydia: Especially since those things, like you said, can stay on your credit for years? 

Sam: Yeah. So at the end of the day, like the most [00:38:00] important thing you can do is pay your bills on time. So if that doesn’t happen one month and it happens, we all know it does, right? Um, the best thing you can do is make the next month payment on time and keep doing that.

Sam: And it’s one of these things that is sort of frustrating about credit, right? Is that, you know, there’s no shortcuts. You gotta just, it, it’s, it’s all time. It’s all time and responsibility. And so, you know, those slip-ups can hurt you, but. If you just commit to making sure that they happen never or as rarely as possible, that’s sort of the best that you can ask.

Sam: Um, you know, a quick aside to talk about fizz, like we know this stuff happens and one thing that I really love about the Fizz card is the fact that when you sign up for Fizz and you’re using it, you know [00:39:00] it works just like a credit card, right? Like you have a line of credit, you have a statement closing date, you have a due date that’s about three weeks after that, um, by which you have to pay your balance.

Sam: If you don’t pay your balance by that due date, then your card will lock, right? And typically that’s where a normal credit card would report a missed payment to the credit bureaus. We give you an additional month grace period after that, before we report any delinquencies to the credit bureaus. ’cause we understand, you know, we, we don’t wanna put anybody in position where, you know, a simple mistake screws things up.

Sam: Um, but yeah, all that to say, you know, it’s just, it’s, it’s, it’s, there’s no shortcuts and it really underscores the importance of paying on time and being responsible. Um, you know, and, and yeah, I mean, again, like, it, it’s really why I think what we’ve built with fizz is such a cool thing. Um, you know, another feature that I love is like our safe freeze feature, which is that even if you don’t use daily [00:40:00] autopay, which like, you know, 90 plus percent of our users do, um.

Sam: We have this feature that if you don’t automatically, or if you don’t manually make your payment every day, like we can freeze your card and say, Hey, like you have an outstanding balance. Like, don’t use your card until you’ve paid this off. Um, and stuff like that. Just like, you know, we wanna help you make sure that you’re in a position where you’re not screwing up.

Lydia: I am curious, so I, I know that a lot of students, um, they may have parents who gave them like an emergency credit card or something like that growing up, or they heard their parents, you know, about only using credit cards for the, for emergencies. Um, what do you think about. Students using credit cards for unexpected payments that maybe they don’t have the money for.

Lydia: And how do you keep yourself from going into debt when you’re kind of [00:41:00] relying on your credit card to cover those unexpected expenses, especially when you’re student and maybe don’t always have the money to say money, get an expensive repair on your car. Uh, last minute. 

Sam: No, it’s, it’s a good question.

Sam: ’cause life happens, right? Um, I think there’s a couple answers to this one. I think that it’s important for everybody and I mean, god knows I’ve gone through this. Take a really good long look in the mirror when it comes to splitting out your, your wants and your needs. Um, I think there, you know, human nature, there’s a lot of putting the wants into the needs category.

Sam: Um, you know. My AC in my car doesn’t work as well as I want it to. You know, obviously that’s something that would increase quality of life and yeah, I can think of other examples too. Um, because, you know, maybe if you live in [00:42:00] northern Minnesota in the winter, like it’s important to have a car like spits out heat.

Sam: Um, but you know, just making sure that you’re really only spending money on, on your needs if, if, you know, times are tight. Right? Uh, because the single worst way that you can borrow money is with a credit card. Um, there’s no way that you’re gonna find higher interest rates than with a credit card. I mean, you’re paying 30% interest typically, especially if you’re younger and you are in college and you don’t have good credit to begin with.

Sam: Um, or if you don’t have much credit history to begin with, 30% is crazy high. Um, you know, and so I, I would say that. Obviously life happens and like, again, it’s, there’s a whole industry behind this and, and borrowing money with a credit card, like in the very short term can be the type of thing that like, is not the absolute end of the world.

Sam: But I would say it’s just something to it. It shouldn’t be the default. It’s something that should be avoided. If you can [00:43:00] go to your bank and talk about a personal loan, you know, you can get those for a lot cheaper. Um, in terms of interest, uh, than you can with a credit card. Uh, you know, if you can borrow money from somebody even at an interest rate that you agree on with them, uh, you know, again, everybody’s situation is different and obviously stuff happens, life happens.

Sam: Um, but important to remember that borrowing money on a credit card is kind of the worst way to borrow money. So if there are ways that you can get around that, it really should be kind of the last resort.

Lydia: Uh, another question we have is, would you say that apps like fizz are a better starting point than using a regular credit card if you’re young and a student, even if you do have the opportunity to get a regular credit card from your bank? 

Sam: I think so. I mean, don’t tell me I’m biased [00:44:00] though, right. But I mean, I, I think at the end of the day, like the, the way that I look at, at this is just setting yourself up for success.

Sam: Um, I think that what can be really frustrating about a normal credit card is that like you don’t know if you’re gonna be approved, right? Because. Even a student credit card still runs a credit check. They just say, oh, this person has no credit and we’re okay with this, or we’re not. A lot of people get denied for student credit cards.

Sam: Um, you know, and, and that one makes even less sense, right? Because like, like the car dealership analogy, you have two people that, you know, have pretty similar backgrounds, both apply to a credit card and, you know, without any credit history, you know, ’cause they’re in college and one gets it and, and the other doesn’t.

Sam: Um, I also just think there’s a real benefit to sort of having the tools at your disposal to, to navigate and understand how this stuff works. Um, you know, using our [00:45:00] feature like daily autopay gets you in the habit of not spending money that you don’t have. Um, so does something like safe freeze, um, so do our smart credit limits, right?

Sam: That keep you from spending more than you have, right? Um, and so I think that like.

Sam: There’s definitely benefits to, to eventually figuring out how to use a credit card and, and like, I don’t, you know, I, I, I definitely think there’s some truth to the, to this, the idea that like, you know, phys isn’t for everybody, right? Like, if you work on Wall Street and are very successful and are 35 years old, like this card probably doesn’t make that much sense for you.

Sam: Um, but you know, if you’re just getting started, I really think it’s a great place to start because not only are you getting a great card that helps you sort of get to, you know, the next step and then like figure out your, [00:46:00] your relationship with, with credit. But, you know, budgeting, credit, monitoring trivia, personal finance resources, all the sort of stuff is stuff that you’re not getting from the discovers and the capital ones of the world.

Sam: Um, so I think there’s a lot to love about fizz that. Isn’t necessarily there with a normal credit card, even if you can get approved for, for one. Um, and you know, this also, I, I think I touched on this a number of times, but this doesn’t check your credit. So, you know, that’s kind of half the battle there.

Sam: So with a normal credit card, you, you don’t know if you’re gonna get approved, even if it’s a student credit card. Um, you know, a lot of student credit cards are just normal credit cards with student marketing, um, and maybe slightly lower credit limits. Uh, but you know, fizz, there’s no credit check, there’s no co-signers, you know, you just need to have money in your bank account and you’re set.

Sam: So that’s what I would say go fizz. 

Lydia: Great. Um, and [00:47:00] another question that we have is, in your opinion, what do you think is the biggest mistake that young people make when it comes to their finances and building credit? 

Sam: I think honestly the biggest mistake that people tend to make is that they don’t get started until it’s too late.

Sam: Um, and honestly, I do think that beats out like missing payments. I think that missing payments is the type of thing that, like, it is more of a known wrong, you know, like nobody wants to be missing payments. Uh, like in an ideal world, I, I don’t think anybody would say that’s, that’s my goal. Whereas I think that there’s a sort of a weird pride in, in, in kind of leaving these adulting tasks for later.

Sam: And like, I definitely like, heard that from a lot of people in college and definitely like, you [00:48:00] know, shaped how I think about this stuff. Um. I think not getting started is just, it’s, it’s a, it’s a complete own goal. You know, like it’s a self-inflicted wound, right? And there’s just no reason for it. Uh, a lot of people, you know, because there’s too many excuses that go along with that, oh, I need a job to get started.

Sam: You don’t, I need to be older. You don’t, you need to be 18. Um, and so I think that is really the single biggest mistake is, you know, maybe even some of you watching this saying, oh, I’m only 18, 19, 20, I don’t need to worry about this right now. Or like, you know, I’ve never had to worry about it in the past.

Sam: So like, why, why, why, why should I start now? And, you know, so that I would really, you know, I, that, that definitely is my answer. And I, you know, would really encourage everybody to sort of reexamine that thought process, if that is your thought process of like, why not get started now? 

Lydia: Yeah, that makes a lot of sense.

Lydia: Um, would you say that there. [00:49:00] Do you feel like there’s a certain rule of thumb for how many credit cards a student should have? Um, I know that you were talking about, you know, the number of accounts or different types of accounts that you have can sometimes impact credit as well. So can it be beneficial for you to have more than one credit card, assuming that you’re, you know, not maxing all of them out?

Sam: Yeah, good question. Um, so I think the reason it makes sense to have multiple credit cards, and I’m, I’m trying to think of edge cases here, which is why, oh, like you have to gimme a sec, but like really the main reason to have multiple credit cards is to take advantage of credit card rewards. Like, if you are not concerned about that at all, there’s not really a reason that you need to have multiple because Right the way that you should be thinking.

Sam: About using credit, especially in [00:50:00] college, is not to finance stuff that you don’t have the money to pay for right now. It, it’s to build credit and building credit with two credit cards versus one. It’s probably not gonna have an outsize effect, um, on your credit, you know, talking maybe a, a handful of points here and there.

Sam: Um, but, uh, you know, again, for the most part it, it’s really not gonna have a huge effect having two versus one or three versus one. Um, so I think that, you know, somebody like ME’S gotten like very, you know, I’m very into, like I said, credit cards and points and miles and that type of thing. Like, sometimes it makes sense for me to have, you know, I’ve done the calculations in my head, right?

Sam: Like to have multiple cards. Oh, this one I use for gas. This one I use for groceries. This one I use for dining. Um. I think that’s really, you know, and that’s kind of, sort of the 2.0 of, of, of credit cards. Um, and, and less what we’re [00:51:00] talking about right here and definitely not where you want to start. Um, so I would say, yeah, starting out like no one credit card is plenty and, you know, one credit card that you pay in full on time every month, it’s gonna do wonders for your credit score, credit score.

Sam: It’s gonna put your credit score into the excellent territory, um, before you know it actually.

Lydia: And are there any red flags that young people should be thinking about, um, when they’re deciding whether or not to open a credit card outside of his, you know, is there a certain interest rate or certain policies that they should be looking for? 

Sam: So, again, it’s kind of a trick question because. I, and this is a, a, a fun anecdote that I feel like I think back to a lot, which is, you know, a, a friend of mine was telling me a story about how he was talking to his dad about getting his first credit card.

Sam: And his dad’s response was like, oh, well you better find one with low [00:52:00] interest rate. And that’s not the right way to think about getting your first credit card, because frankly, you should not care what the interest rate is on your card because it should never affect you because you are paying your bill your bills on time and in full every single month.

Sam: Um, and the only reason that interest rate matters is if you’re not paying your bills in full every single month. Um, the interest rate only applies to balances that are carried, balances that, you know, you spend in one statement period and don’t pay back by that due date for that statement period. Um, you know, I like.

Sam: I don’t even think of this as a brag, but like I, you know, I’m now 29, like I’ve been building credit for quite some time and I’ve never, in my entire life with all of my credit cards, missed a single payment. An interest rate has never affected me, and I think that’s the way that you want to think about credit cards.

Sam: So I would say almost as a red flag if you are shopping around for a credit card with a low interest rate, um, [00:53:00] because the only reason that that’s relevant is if you’re not gonna pay your bills on time and in full. So, you know, again, I think that the biggest red flag is, is, is thinking about credit cards, is being able to spend money that you don’t have, which is why I think fizz is great, especially as a starting point.

Sam: Great. 

Lydia: Uh, do you have any advice for parents that might be listening to this webinar? Like what are the kinds of things that they should be talking to their kids about as they get them ready for college and also try to prepare them for the real, real world? Like what, what kinds of things should they be talking about when it comes to finances?

Lydia: Ansys? 

Sam: Yeah. Well, this is a good question. I mean, honestly, not to sound like a broken record here, but like, I think one of the most important things really is just the concept of like, when it comes to, you know, you can have a longer conversation, right? About like how like there’s good and bad types of debt.

Sam: Like, for example, like using leverage and debt to buy a house is, is [00:54:00] typically seems as a good thing. A lot of parents watching, you know, probably have mortgages and that is a form of debt, right? That you’re paying back to bank at an interest rate. Um, but you know, when it comes to your everyday purchases.

Sam: That stuff really doesn’t matter. So I, I think really what’s the most important thing that I would say for parents to sort of be thinking about is setting up your kids to be successful themselves and to really understand how the system works. Um, you know, and I think that unlike, you know, my, my friend’s dad who said, you better get the card with low interest rate.

Sam: You know, making sure that if your kid understands what an interest rate is and like why it shouldn’t be relevant for a credit card, but when it is relevant and really what it even means, which, you know, honestly, if you understand that, you’re probably even less likely to go in a credit card debt. Um, and I think that, like, something that I sometimes see parents have a little bit of tough time with is sort of like, and [00:55:00] of course, right, like my parents were a mess when I went off to college.

Sam: Um, but this sort of like, like passing the torch and saying that like, your financial future, you know. I can be here to help you as much as I want to, or as much as like we’ve agreed upon, or as much as I’m going to be. But ultimately, you know, the bird’s gotta leave the nest. And, and it’s really important for kids, particularly going off to college 18, 19 years old, to just understand their place in the financial ecosystem and how they are going from that role of, you know, more being part of your household to kind of building their own financial lives.

Sam: So I would say the education piece is really just the most important. Um, making sure kids understand, uh, what all this stuff means. ’cause you know, I’m willing to bet that most of the college students who are in trouble with credit card debt are ones who, you know. Haven’t had long conversations with their parents about [00:56:00] this type of stuff.

Sam: Um, so yeah, I think it’s really important just to sort of, you know, de-stigmatize the money conversations as they’re really good. I think they’re interesting and, you know, there’s a lot, there’s a lot of good stuff to be learned. 

Lydia: Makes sense. And, uh, we have a parent who’s asking about, you know, wanting to create a Fizz account for their child to prepare them for those kinds of things.

Lydia: Does, do you have to be 18 in order to have an account with Fizz, or could this be something that you sign up, um, like a teenager for? 

Sam: So that’s part of the, what I see as the, the beauty of fizz is that, so we don’t run credit checks and we don’t have co-signers, so you actually can’t sign somebody else up for Fizz.

Sam: It’s just you signing up yourself for your own card. Um, so. If your kid’s 18, you know, I definitely encourage you to walk through the signup process with them, uh, help them figure it all out. [00:57:00] But ultimately it should be, you know, on their phone and, and them downloading the app and everything. Um, and so yeah, you do have to be 18 in order to get a fizz card.

Sam: Um, we’re soon launching sort of like a non card version of the app. We actually have it, but we’re expanding on that like, like in the coming months, um, where, you know, you still have access to the, the, you know, credit monitoring, tria, personal finance resources, all that other stuff without the card if you’re not 18 yet.

Sam: Um, but, uh, yeah, you have to be 18 to get the card and, um, yeah, you know, I think, uh, part of what, what makes it cool is that it, you know, there is an element of, uh, of sort of personal responsibility there of. That like, you know, if you’re the one signing up for Fizz, like it’s, it’s, it’s your card. And I will say another question that I get from parents a lot is like, oh look, can I like add money to my child’s Fizz card?

Sam: Like, you [00:58:00] know, ’cause you know, a lot of parents and kids have that, you know, dynamic through college, right? Like allowance of sorts and that’s not quite how it works, right? Because it’s the line of credit. It’s not like a prepaid card or anything like that, that said, you know, if you’re adding money to your kids’ bank account once a month or once a week or whatever, um, you know, that reflects in the, the credit line and that spend limit that they’re given.

Sam: So like kind of, you know, uh, uh, that is a way of, of, of doing. Exactly. That 

Lydia: makes sense. Uh, another question we got is where is, where can you check your credit score for free 

Sam: annual credit report.com? Um, you get, I believe it’s one or two free credit reports, detailed full credit reports, um, per [email protected].

Sam: That’s like what we were talking about, the credit report versus credit score. That will show you your full report. Um, in terms of checking your score, it’s pretty easy. You can do it in the Fizz app, [00:59:00] you can do it on Creditkarma.com, you can do it on nerdwallet.com. You basically Google what is my credit score, and, and you know, click on anything pretty much in the first two pages.

Sam: And, uh, and you put in like, you know, your name, your address, last four digits, your social security number, and, uh, and yeah, it’ll show you what your score is. 

Lydia: Um, and one last question that we have, uh, to wrap us up is, can you just remind us like, how much is the membership, where should we be going if we wanna sign up for a Fizz card?

Lydia: Um, any other information that we need if we’re interested. 

Sam: Yeah, absolutely. So for college students it’s 59.99 per year. Um, you can also pay quarterly 15.99 or monthly, 5.99. Um, totally up to you. Uh, annual is the default and what I would recommend, especially since you know, credit building takes time, it makes sense to, you know, leave [01:00:00] your card open for longer than just a month or two.

Sam: Um, and, uh, you can sign up just by going to join fizz.com. We also have a, a a I, I’m forgetting the URL here, um, but I think it should be attached in, in one of the several webinar promo emails that were sent out in advance of this event. Um, but yeah, if you use code, um, ca 25, you get, uh, a free month. Of credit building with Fizz.

Sam: Um, so that’s a fun little bonus. 

Lydia: Awesome. Well, thank you so much Sam, for this super informative presentation. Um, I have had a credit score and had credit for over a decade as well, and I feel like I still learned a lot from this presentation, and I’m sure that [01:01:00] everyone at home who’s watching as well also felt the same.

Lydia: So thank you for taking the time to tell us more about Fizz and walk us through all the things that, how the students and their families need to know about credit as they prepare for adulthood. 

Sam: Of course, of course. Thanks so much for having me. It’s great being able to talk with you guys. Um, as you can tell, I really love this stuff and I think it’s important.

Sam: And honestly, I think it’s cool. I think, you know, figuring out how to get your feet under you, um, in the world is, is is an awesome thing to do, especially for young adults, college students. Um, you know, I really am grateful for those experiences myself and so, yeah. Um, you know, feel free to email me, Sam, at join fizz.com.

Sam: Connect with me on LinkedIn. Always happy to answer any other questions. Um, but thanks so much guys. Appreciate, uh, appreciate the time. 

Lydia: Yeah, thank you. All right. Have a great night.