New Robinhood Credit Card Will Earn 3% Back on Most Purchases

The ever-popular investing app, Robinhood, has launched its first credit card, giving its young users yet another eye-watering product offer. This new credit card is promising an industry-leading 3% cash back on most purchases.

Wow, this is big.

Currently, the waitlist is open for Robinhood members to sign up for the Robinhood Gold Card, which is partnered with and issued by Coastal Community Bank. And get this: there is no annual fee. 

To get this card you must be a Robinhood Gold Member which costs just $5 a month. $5 a month rather than an annual fee that is typically over $100 is a steal for a percent back that is historically large compared to other cards.

With the gold membership you get other benefits too such as a 5% APY on savings, a 3% match on retirement IRA contributions, and a 1% unlimited deposit boost on all incoming brokerage deposits starting in early May 2024. 

For just $5 a month this is looking really promising for consumers, but that does beg the question: how does Robinhood make money in all of this? 

Well the more money a consumer was to have inputted into the platform the better for Robinhood. CEO Vladimir Tenenv has stated in a recent interview that they have data suggesting that Robinhood Gold Members were more likely to input more money into their accounts and use more Robinhood features and products then lower tier members. This explains why the credit card product is so powerful for the fintech as they look to onboard more and more consumers to the highest Robinhood Tier to make more money off of other verticals such as investment and savings. 

Robinhood can also always earn credit card interest on minimum payment consumers looking to build their credit, so overall this new credit card is a win-win for the company and will be interesting to see how well the initiative does.