Debt is often the anchor that traps people in a sub-optimal life. On a low income and need to pay for some medical care? Often the solution is to turn to money lenders who offer the allure of easy finance but do so within a context of massively high-interest rates and extra fees. Start on this path and it’s often hard to get off – with individuals seeking loans to pay of loans and a cascading debt level. While the more mercenary among us would suggest that it’s a case of survival of the fittest and caveat emptor, it’s fair to say that these money lending schemes harm society as a whole.

So I was interested to hear of the launch of Summed, a San Francisco-based financial services startup. Now I’m always a little bit dubious when a Bay-Area startup launches with a stated intention of disrupting some industry or other – oftentimes the result is an organization with cultural values even poorer than the organizations they’re attempting to disrupt (Uber, anyone?) But in Summed’s case, it’s worth looking at what they’re up to.

With the Summed app, consumers can split large purchases into smaller payments through simple financing that connects to their debit cards. Unlike credit cards, however, Summed provides low-interest rates, no fees, cash-back rewards and, most importantly … fixed repayment amounts. That way, consumers know exactly how much they’ll owe and when they’ll complete their repayments. The app essentially works similar to providing mini personal loans that let consumers avoid the toxic snare of revolving credit while freely making their purchases.

So a debit card that can be used anywhere, backed by a loan service that doesn’t come with the usual negative impacts. Sounds intriguing. According to the startup, Summed has some specific benefits:

  • No fees of any kind
  • No compounding or deferred interest
  • Interest rates up to 50% lower than credit cards
  • Cash-back rewards up to 3%
  • Fixed-term, fixed-interest loans so customers know exactly how much they’ll owe, including interest, and when it’ll be paid off

How do consumers use it?

To set up a new loan, consumers apply from within the Summed app – they chose the repayment schedule and get instant information about their repayment levels. Once they accept the loan, the purchase can be made with their debit card as normal. Brad Matthews, CEO of Summed explains the rationale for Summed and his moral perspective on what they’re doing:

Credit cards today are broken. Big banks issuing credit cards are incentivized by a model that profits from keeping consumers in debt forever. Our mission is to fix this. The future of consumer credit is not a traditional card. It’s an app that puts consumers in control. With Summed, debt does not snowball. It disappears.”

The economic need for credit card disruption

The statistics about credit card indebtedness are sad reading. From a novel concept only a few decades ago, credit cards are now massively used and a real millstone around many consumers necks – while a credit card is a very useful tool, it can also have big consequences. In 2016, U.S. credit card issuers raked in $94.3 billion in fees driven by as many as 12 different fees, including $12 billion in penalties alone. About 67 percent of Millennials have a fear of debt and avoid credit cards entirely, according to a recent survey by Another survey by Experian found that about 36% of respondents felt credit cards just led to a deepening of their debt. More than half of respondents were put off by the high-interest rates that credit cards charge.

The elephant in the room

Credit card companies are massively powerful entities and anyone trying to do them out of a few bucks has a few challenges. What is there to stop the credit card companies simple crushing Summed with their own, similar offering? Well, not much, really. But Matthews believes this will not occur. As he explains it:

Large credit card companies are unable to innovate or unwilling to provide affordable interest rates. They’re bureaucratic organizations bound by legacy technology. As a result, banks market their credit cards based on rewards gimmicks and deceptive introductory interest rates. Meanwhile, consumers are losing more to fees and interest charges than they gain with rewards. Summed aims to change this.


IN an ideal world (and, yes, I realize it doesn’t really exist), people would live within their means and not need credit of any kind. The reality, however, is that credit is a requirement in modern society. Summed is doing a seemingly good job of reconciling a credit-fueled society with one which doesn’t let people fall by the wayside.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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