"Laplanche, who was also the co-founder of LendingClub before leading Upgrade to a $7.3 billion valuation, was unsparing in a recent interview with Fortune. The fintech sector itself, he claimed, "would not even exist if, frankly, banks had done a better job really delighting their customers with product innovation that moves the needle," Laplanche said, arguing that the industry's reliance on "nickel and dime" fees and "unpredictable" costs created the very void that he's spent his whole career filling."
"Laplanche's most pointed criticism was reserved for the credit card itself, a "horrible financial product," and something that's brought millions of American families to a crisis point. Besides high fees, which Laplanche noted are core to the profitability of these products, he argued that credit cards are "really designed to keep people in debt as long as possible," encouraging a minimum payment that will keep people paying off debt for decades."
Total U.S. credit card debt has reached $1.3 trillion, averaging more than $10,000 of high-interest debt per family. The banking industry is identified as a primary cause, with reliance on high fees, unpredictable costs, and products that lack meaningful innovation. Credit cards are characterized as high-profit, fee-driven instruments designed to keep consumers in debt through minimum payment structures, contributing to prolonged repayment timelines. Consumers often hold multiple cards, increasing exposure to costly terms. A fintech company was created to offer more affordable, responsible credit alternatives aimed at helping consumers reduce reliance on traditional credit-card products.
Read at Fortune
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