“Maximize Your Earnings: Robinhood’s Innovative Credit Card Offers Investment Options for Cash-Back Rewards”

Robinhood Launches New Credit Card, Gold Card, After Acquiring X1 Startup

Robinhood, the popular brokerage app, has just announced the launch of its highly anticipated new credit card, the Gold Card. This comes just eight months after the company acquired credit card startup X1 for a whopping $95 million. With a list of features that may even make Apple Card users envious, the Gold Card is aiming to attract users with its impressive benefits.

Better known for its app aimed at everyday investors, Robinhood is now expanding into the credit card market with a strong offering. The card boasts no annual or foreign transaction fees, making it a great option for those who frequently travel or shop online. However, there is a catch – the Gold Card will only be available to Robinhood Gold members, who pay a monthly fee of $5 or an annual fee of $50. Gold members also receive other benefits, such as a 5% APY on uninvested brokerage cash.

Cash Back and Other Perks

• Users will earn 3% cash back on all categories, including restaurants and groceries, with the Gold Card.
• 5% cash back can be earned when booking travel through Robinhood’s new travel portal.
• Cash back can be transferred to brokerage accounts for investment purposes.
• This innovative cash back feature was developed by X1 prior to its acquisition by Robinhood.

One unique aspect of the Gold Card is the ability to provide cards for family members. This is the first family-oriented financial product introduced by Robinhood, according to Robinhood Money General Manager Deepak Rao. Rao, who was the founder and CEO of X1, joined Robinhood after the acquisition. With this feature, users can add up to five family members as cardholders to their account, with each cardholder receiving their own card. This allows parents to help teens build credit and monitor their spending. Cards can even be provided to family members visiting from other countries.

“A user can provide cards to parents, children or caregivers and set the right kind of controls and protection, while also helping them build their credit,” Rao explained. “They don’t have to provide any other information than their name and date of birth and Social Security number if they have one. If you’re worried about spending limits, you can put a dollar amount limit and also a child-safe mode for kids.”

Other Noteworthy Features

• Users have the ability to create and delete virtual cards for one-time purchases.
• The Gold Card carries an APR of 20.24% – 29.99%, which may vary with the market based on the Prime Rate.
• The physical card will be numberless, providing added security in case of loss or theft.

The Gold Card will also come with a separate app, separate from Robinhood’s investment app, to help users manage their credit card activity.

FDIC Insurance and Other Potential Revenue Streams

The Gold account offers up to $2.25 million FDIC insurance through a network of partner banks. This is another way Robinhood is trying to compete with other credit card providers, such as Apple, which has reported over 12 million users as of January.

While many credit cards offer cash back, it is often limited to certain categories. However, the Gold Card is incredibly generous with its cash back offer. For instance, Apple offers 3% cash back on all purchases made at Apple and select merchants when using the Apple Card with Apple Pay, and 2% back on all other purchases. They also offer a Family Sharing feature and a high-yield savings account with 4.5% interest. Similarly, Robinhood will earn interchange revenue from the credit cards, which are standard transaction fees paid by merchants. The company has already earned interchange revenue from its debit cards, which were launched in 2018. The Gold Card’s banking partner is Coastal Community Bank.

Expansion of Robinhood’s Business Model

The Gold Card is a significant step in Robinhood’s evolving business model. In addition to the credit card, the company also announced Robinhood Retirement in 2022 – the “first and only” individual retirement account with a 1% match on every eligible dollar contributed. Gold Membership, a requirement for the Gold Card, also increases the eligible match up to 3%.

If you want to stay updated on the latest fintech news, sign up for TechCrunch Fintech here.