Robinhood Changes the Game with New Credit Card Offering Cash Rewards in Addition to Investment Opportunities

Robinhood Takes on Apple Card with Revolutionary New Credit Card

Robinhood, the popular brokerage app for everyday investors, has just announced the launch of its highly anticipated Gold Card. After acquiring credit card startup X1 for $95 million last year, Robinhood has been working hard to develop a standout credit card that could rival even the coveted Apple Card.

The Gold Card boasts an impressive list of features that are sure to make even Apple Card users envious. With no annual or foreign transaction fees, the Gold Card is an appealing choice for those who want to avoid hidden fees. However, there is a catch – the card is only available to Robinhood Gold members, which costs $5 a month or $50 annually. Gold members also receive other benefits, such as a 5% APY on uninvested brokerage cash.

One of the most groundbreaking features of the Gold Card is the ability for users to invest their cash-back perks. This was a key innovation developed by X1 prior to being acquired by Robinhood and sets the Gold Card apart from other credit cards on the market.

Impressive Perks for Gold Card Users

Gold Card holders can earn an impressive 3% cash back on all categories, including restaurants and groceries. But that’s not all – they also receive 5% cash back when booking travel through Robinhood’s new travel portal. This cash back can then be transferred to the user’s brokerage account and used towards investments like stock purchases.

Family-Friendly Features

But the benefits don’t stop there. Another unique feature of the Gold Card is the ability to add family members as cardholders. This is the first time Robinhood has introduced a family-oriented financial product, as explained by Deepak Rao, Robinhood Money General Manager and former CEO of X1. Users can add up to five family members of any age to their account, making it a useful tool for parents looking to help their teens build credit and monitor their spending habits. The option to provide cards to family members also extends to those 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,” said Rao. “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.”

Innovative Features Set the Gold Card Apart

The Gold Card also offers unique features, such as the ability to create and delete virtual cards for one-time purchases. Additionally, the physical cards will be numberless, providing added security in case of loss or theft.

The APR for the Gold Card is set at 20.24% – 29.99%, which Robinhood states will fluctuate with the market based on the Prime Rate. The company is also launching a new app specifically for the Gold Card, separate from their investment app.

FDIC Insured for Your Peace of Mind

Gold Card users can also rest easy knowing that Robinhood offers up to $2.25 million in FDIC insurance through a network of partner banks.

Taking a Cue from Apple

Clearly taking a cue from the success of the Apple Card, Robinhood’s entrance into the credit card market is a strategic move for the company. The Apple Card has seen great success, despite some hiccups with its partnership with Goldman Sachs, and currently has over 12 million users.

While many credit cards offer cash back, they often restrict it to certain categories. In comparison, the Gold Card offers a generous 3% cash back on all purchases, making it a strong competitor in the market. But Apple offers other perks, such as a Family Sharing feature and a high-yield savings account with 4.5% interest.

How Does Robinhood Make Money from the Gold Card?

Robinhood will earn interchange revenue from the credit cards, which are standard transaction fees paid by merchants. They have already been earning interchange revenue from their debit cards, which were launched in 2018. The Gold Card’s banking partner is Coastal Community Bank.

Continued Growth and Evolution of Robinhood

The Gold Card launch is just one example of how Robinhood is constantly evolving and expanding its offerings. In 2022, the company announced Robinhood Retirement, the “first and only” individual retirement account (IRA) with a 1% match on every eligible dollar contributed. And for Gold members, the eligible match is increased to up to 3%.

Bringing Equal Access to the Financial System

Robinhood co-founder and CEO Vlad Tenev stated in a written statement, “There’s always been special perks and opportunities reserved for the wealthy that make them even richer. It’s why we started Robinhood. Today’s announcements bring us one step closer to the goal of giving everyone better access to the financial system.”

Applying for a Robinhood Gold Card

Are You Eligible?

In order to apply for a Gold Card, you must first meet the following requirements:

• Must have a Robinhood Gold account
• Be 18 years or older
• Have a valid social security number (not a taxpayer identification number)
• Have a legal U.S. residential address within the 50 states (exceptions may apply for active U.S. military personnel stationed abroad)
• Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa

Membership Fees and Transaction Fees

In order to apply for the Gold Card, you must first become a Robinhood Gold member. The cost is $5 a month or $50 annually.

There are no foreign transaction fees associated with the Gold Card.

Credit Check

Robinhood will not do a hard pull on your credit until you accept the card offer.

Maximize Your Rewards

The Gold Card offers 3% cash back on all categories, making it a top choice for those looking to make the most of their rewards. Additionally, users can add up to five family members as cardholders, create and delete virtual cards, and rest easy knowing their card is FDIC insured for up to $2.25 million.

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This post was originally published on March 26 at 4 p.m. PT, and has been updated to include Robinhood’s stream and additional remarks.