The popular investing app Robinhood – yes, the same one that lost you money buying meme stocks during the pandemic – just announced a new credit card is coming with a big gimmick … and an even bigger potential upside.
The Robinhood Gold Card isn't available for applicants just yet – and while the card itself has no annual fee, you'll need a $50-a-year Robinhood Gold subscription to get it. But what makes this card stand out is that it will offer an unprecedented 3% cashback on all purchases – plus 5% cashback on travel booked through Robinhood's upcoming travel portal.
A card that offers 2% cashback (or 2x miles) on everyday purchases has been about as good as it gets, so this card will raise the bar substantially. You'll be able to redeem Robinhood rewards as cashback by transferring to your Robinhood brokerage account (which you can, in turn, transfer to an external bank account), using them to book travel through Robinhood's portal, shopping with partner merchants, and more.
But the release date of this upcoming cashback card is still unclear – anyone with a Robinhood account can join the Gold Card waitlist. If and when you're selected to apply, you’ll receive an email and push notification from the Robinhood app or simply check your eligibility for the card in the “Spending” tab of the app.
Once it launches, there'll be no welcome bonus like you'll find on most new credit cards to create a buzz. Instead, Robinhood is adding a fun (and absolutely gimmicky) twist: The first 5,000 people to refer 10-plus friends to the Robinhood Gold card will get an extra special – and extra-heavy – card made with 10 karat gold. Just don't misplace it!
While the card is marketed as having no annual fee, that's a bit deceiving as the card requires an annual Robinhood Gold subscription to apply and keep the card – and that'll cost you $50 per year. A Robinhood Gold subscription comes with other perks like a 5% APY on un-invested funds, 3% IRA match, and up to $50,000 per day in instants deposits, giving you the availability to invest your money sooner.
But a card that earns 3% cashback – on every purchase, unlimited – is unheard of because the economics don't really make sense. And despite the buzz around this new card, they likely won't here for Robinhood and future Gold cardholders, either – at least not in the long run.
Just yesterday, Visa and Mastercard announced a $30 billion settlement that will see them cut interchange fees – the money card networks and banks make when you swipe your card – over the next five years. Whether you're earning points or cash back, those fees are what funds credit card rewards.
The annual fee (or mandatory Robinhood subscription, in this case) and the lack of a traditional welcome bonus could help the company offset the costs of the card. Still, a 3% cashback rewards structure may be too generous for Robinhood to offer in the long term.
In addition to offering a best-in-class 3% cashback, the card is also unique in a few other ways.
To start, the actual Robinhood Gold Card won't have any numbers on it. This means if you lose or misplace your card, you're not at risk for someone using it to go on a shopping spree. You can also use the Robinhood app to create virtual card numbers for one-time use, like those pesky “free trials” you sign up for and forget to cancel before getting charged.
You can also add up to five authorized users to your card for free – and unlike other banks, these authorized users can be any age. That'll make this an excellent solution for families with young (but financially responsible kids) to help build credit from a young age.
And since the card is a Visa Signature Card, you'll also get some built-in benefits like trip interruption protection, purchase security, return protection, roadside assistance, and more. Additionally, the card does not charge any foreign transaction fees, making it a solid choice for earning rewards at home and abroad.
Bottom Line
Between its gimmicky, 36-gram gold card option and unbelievably lucrative 3% cashback earning, the upcoming Robinhood Gold Card is lighting up the internet.
It's not even available for applications yet, but that lucrative rewards structure is already raising questions about whether it'll be sustainable. When it launches, it'll be among the most rewarding cashback credit cards on the market, easily worth the mandatory $50-a-year Robinhood Gold subscription.
But how long will that last?