Credit cards mostly exist as a way to exploit customers rather than serve them – and it’s time technology solved the problem.

That’s the view of Tim Chong, CEO of London startup Yonder, which has created a rewards-based credit card.

Yonder was founded in 2021 by ClearScore alumni Chong, Theso Jivajirajah and Harry Jell following the former’s struggles to access quality credit products as an Australian citizen in the capital.

The startup has raised £20.9 million from VC funds including Seedcamp, Northzone and LocalGlobe. It also counts Frank Strauss (Deutsche Postbank), Matt Robinson (GoCardless) and Rio Ferdinand amongst a host of angel investors.

“Despite all the technological progress of the last two decades, credit cards still fundamentally haven’t changed, and most exist as a way to exploit customers rather than serve them,” Chong tells BusinessCloud. 

“Credit cards have become a game of deception between consumers and banks. With 0% balance transfer offers, attractive minimum monthly repayments and hidden fees, it’s become about who can outsmart who. 

“It’s no surprise that more time is spent by banks on optimising their credit card portfolio profitability than on creating financial products that genuinely work for consumers.”

When credit cards launched in the 1960s they were a revolutionary alternative to cash and instalment loans, with wide merchant acceptance and innovative features like interest-free periods. 

But since then there’s not been much change, Chong says, with reward schemes that still reflect the loyalty programmes which started in the late 1980s. 

And over the past 50 years, the credit card has turned from a financial innovation to a source of stress for a lot of people, with credit card debt reaching £72.1 billion in 2020. 

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We believe the entire industry needs a serious shake-up,” says Chong. “In the same way that FinTechs have begun disrupting the current account and personal loans industries, Yonder wants to do the same – by turning the world’s relationship with credit on its head and empowering people to use it in a way that works for them.

“Our aim is for people to use their credit cards the way they use their debit cards, enabling them to build up their credit scores responsibly while accessing a plethora of financial solutions and benefits. 

“We know we’re fighting a negative historical perception, but our aim is to completely change the way consumers feel about and use credit, with a product that puts customers first and brings tangible benefits to their everyday lives.”

Yonder started out as a small team of seven in a tiny co-working space in Kings Cross. Chong – who advises that founders should watch out for “shiny objects” that could scupper their business – says the focus was on getting its product into the hands of early adopters as quickly as possible, giving them a chance to learn and iterate. 

“We spent months interviewing hundreds of London residents at the start of our journey and heard that they didn’t feel their needs were being met by the rewards credit cards on offer to them in the UK – either points were confusing to redeem or they weren’t appealing,” he adds.

“We’ve used these insights to design rewards that we know our audience want, can easily fit into their lifestyles and are simple to use. We’ve built Yonder to be the perfect companion to all of life’s adventures – whether it’s in a bustling city or exploring the best dining experiences abroad. 

“We’ve now built a truly remarkable team and refined our product to deliver a beautiful experience for all of our members across London.” 

He says the aim this year is to launch in other UK cities then to expand its rewards offering into other sectors.

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