Nubank gave 30 million people their first credit card, many starting at $20
Starting small let customers prove they could repay, and each repayment helped build a record lenders could use.
Invest Like the Best with Patrick O'Shaughnessy · David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]David Velez, the founder of Nubank, said, "We were the first credit card for 30 million people in Latin America." For a lot of those customers, the first line was $20.
That matters because customers with no record of borrowing have no history to show. Velez said recording transactions in a ledger lets people start building that history.
When Nubank asked established banks why so many people lacked access, the answer it heard was that people did not want credit. The concern, as Nubank heard it, was that people feared taxes and would never use the product.
Velez said what customers were "really lacking was a product that really matched their needs."
Other banks thought a $20 starting point was absurd. Velez said, "that $20 was better than zero."
Velez said those small lines grew over time, to about $100 and later to about $1,000. Those repayments, recorded in a ledger, let customers build a history.
Velez also described an AI copilot that guides customers on spending, saving and investing to improve their access to credit and their financial picture.
The first repaid $20 balance started a record that could grow toward much larger credit.
Questions people ask
Why does having no credit history make it so hard to borrow?
A credit history is a record of borrowing and repaying, and lenders use it to predict whether you will pay them back. Without one, most banks will either refuse you or charge very high interest because they assume the worst.
Do starter cards with tiny limits exist in the U.S. too?
Yes. Many U.S. issuers offer secured cards, where you deposit, say, $200 to get a $200 limit, and student or starter cards with limits of a few hundred dollars. Good repayment can lead to higher limits and unsecured cards, much like Nubank’s progression.
What is the risk to the bank of lending to people with no record?
The risk is that customers cannot pay, especially if limits rise faster than incomes. Lenders manage it by starting small, watching repayment closely, and raising limits gradually only for customers who pay on time.