Robinhood launched its new Gold Card today, eight months after buying credit card startup X1 for $95 million. The card has a long list of features that might even make Apple Card users jealous.
Robinhood is best known for its brokerage app for regular investors. To get people to use its new card, it is advertising a lot of perks. The card doesn’t charge any fees for using it abroad or once a year. But only Robinhood Gold users will be able to use it. Robinhood Gold costs $5 a month or $50 a year. Gold is a programme that gives other benefits, such as 5% APY on brokerage cash that hasn’t been deposited.
People with a Gold Card can get 3% cash back on everything, like shopping and restaurants, and 5% cash back when they book travel through Robinhood’s new travel portal. The company says that the cash back can be put into brokerage accounts and used to buy stocks or other transactions. The big new idea that X1 came up with before it was bought is the option to invest using cash back.
One interesting thing about the Gold Card is that it lets you give cards to family members. Deepak Rao, General Manager of Robinhood Money, told TechCrunch that this is the first time the company has made a financial tool for families. Before helping Robinhood buy X1, Rao was the founder and CEO of that company.
Users will be able to add up to five family members as cardholders to their account. Each user will get their own card. Extra cardholders can be of any age, which lets parents help their kids build credit and keep an eye on their spending. People coming from other countries will also be able to get cards for their family members.
Rao said, “A user can give cards to parents, children, or carers and set the right controls and protections. This will also help them build their credit.” Their name, date of birth, and, if they have one, their Social Security number are all that they need to give. You can set a dollar cap and a child-safe mode if you’re worried about letting your kids spend too much.
The Card also lets users make and delete virtual cards for one-time payments. The APR will range from 20.24% to 29.99%, according to Robinhood, and will change based on the Prime Rate and the market.
Robinhood is also making its real cards without numbers on them so that users won’t have to change all of their information if they lose or have their cards stolen. Rao said that the company is also releasing a new app that is not the same as its investing app to go with the new Gold Card.
The Gold account usually comes with up to $2.25 million in FDIC protection from a group of partner banks.
Money Back
This move by Robinhood to offer credit cards is clearly based on what companies like Apple have done. Apple’s own credit card has been very successful, even though its relationship with Goldman Sachs has had some problems. Since Apple Card doesn’t charge any hidden costs like late or annual fees and gives cash back every day, it now has more than 12 million users as of January.
A lot of cards give cash back, but it’s usually only on certain things. The cash-back deal on this card is very good. For example, Apple gives 3% cash back on all purchases made at Apple and at some other stores when you use your Apple Card with Apple Pay. Most of the time, Apple Card users who pay with Apple Pay get 2% back on their purchases. But Apple also has a feature called “Family Sharing” and a high-yield savings account that pays 4.5% interest.
It’s clear that Robinhood will get interchange income from the credit cards. This is the usual fee that merchants pay for transactions. It has made exchange fees from its debit cards since they came out in 2018. Robinhood works with Coastal Community Bank to offer the new Gold Card.
As Robinhood’s business and products have changed over the years, the new credit card is one example. The company introduced Robinhood Retirement in December 2022. It was called the “first and only” individual retirement account (IRA) that would match 1% of every eligible dollar donated. If you are a Gold Member, which is needed to get a Gold Card, you can get up to a 3% match.
“There have always been extra benefits and chances for rich people that make them even richer.” That’s the reason we made Robinhood…” It was written by Vlad Tenev, co-founder and CEO of Robinhood. “The announcements made today move us one step closer to our goal of making the financial system easier for everyone to use.”
Also Read: If Apple Sues the Us for Trade Violations, Here is What We Know About the Case So Far
If you want to watch the whole event where Robinhood announced the Gold Card, click on the link below.
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