Eight months later getting X1 credit card startup for $95 million, Robinhood today announced the launch of its new Gold Card, with a list of features that could make even Apple Card users jealous.
Robinhood, best known for its brokerage app aimed at the everyday investor, is touting all sorts of benefits with its new card in an effort to attract users. The card has no annual or foreign transaction fees. However, it will only be available to Robinhood Gold members, which costs $5 per month or $50 per year. (Gold is a program that offers other benefits such as 5% APY on an account’s uninvested brokerage cash.)
Gold Card users can earn 3% cash back on all categories, including restaurants and groceries, and 5% cashback when booking travel on Robinhood’s new travel portal. That cash back can be transferred to brokerage accounts, which can lead to investments like stock purchases, the company says. The possibility of investing with cash back is uGreat innovation that X1 developed before it was acquired.
Another interesting feature of the Gold Card includes the ability to issue cards for family members. This is the first time Robinhood has introduced a family financial product, Robinhood Money General Manager said Deepak Rao TechCrunch. Rao was the founder and CEO of X1 before joining Robinhood in the acquisition.
Users will be able to add up to five family members as cardholders to their account, with each cardholder receiving their own card. Additional cardholders can be of any age, giving parents a way to help teens build credit and keep track of spending. The ability to issue cards to family members will also be extended to those visiting from other countries.
“A user can provide cards to parents, children or caregivers and set the right kind of controls and protections, while also helping them build their credit,” Rao said. “They don’t have to give any information other than their name and date of birth and their social security number if they have one. If you’re worried about spending limits, you can put a dollar amount limit and also a kid-safe mode for kids.”
The card also allows users to create and delete virtual cards for one-time purchases and will have an APR of 20.24% – 29.99%, which Robinhood said will vary by purchase based on the Prime Rate.
Robinhood also makes its physical cards uncountable, so if they’re lost or stolen, users won’t have to exchange all of their card information. The company is also launching a new app to accompany the new Gold Card that will be completely separate from its investment app, Rao said.
Generally, the Gold account offers up to $2.25 million in FDIC insurance from a network of partner banks.
Cash back
Robinhood’s entry into the credit card market is clearly on cue from companies like Apple, which has seen great success with its own card (despite hiccups with collaboration with Goldman Sachs). By waiving hidden fees, such as annual or late fees, and earning daily cash back, the Apple Card exceeded more than 12 million users since January.
Many cards offer cash back, but they often limit it to certain categories. This card is generous in its cash back offer. Apple, for example, offers 3% cash back on all purchases made at Apple and on purchases made at select merchants when you use your Apple Card with Apple Pay. In general, purchases made on Apple Card with Apple Pay earn users 2% back. But Apple also offers a Family Sharing feature and a high-yield savings account that offers 4.5% interest.
Apparently, Robinhood will earn interchange revenue from the credit cards, standard transaction fees that merchants pay. It has earned interchange revenue from its debit cards, which released in 2018. Coast Community Bank is Robinhood’s banking partner on the new Gold Card.
The new credit card is part of Robinhood’s evolving business model and offerings over the years. In December 2022, the company announced Robinhood Retirement, which it described as the “first and only” individual retirement account (IRA) with a 1% match on every eligible dollar contributed. Gold Membership, a requirement to obtain the Gold Card, increases the eligible match to up to a 3% match.
“There have always been special privileges and opportunities reserved for the rich that make them even richer. This is why we started Robinhood…” Robinhood co-founder and CEO Vlad Tenev said in a written statement. “Today’s announcements bring us one step closer to the goal of giving everyone better access to the financial system.”
Robinhood Gold Card, explained:
What are the requirements to apply for a Robinhood Gold Card?
You must be a Robinhood Gold card member.
You must first meet the following credentials to apply for a card:
- You must have a Robinhood Gold account.
- Be 18 years of age or older
- Have a valid social security number (not a tax ID number)
- Have a legal U.S. residential address in all 50 states (exceptions may apply for active duty U.S. military personnel stationed overseas)
- Be a US citizen, US permanent resident or hold a valid US visa
Are there any monthly fees associated with a Robinhood Gold card?
You must be a Robinhood Gold member to apply for the card. It costs $5 per month or $50 per year to join Robinhood Gold.
Are there any foreign transaction fees associated with a Robinhood Gold card?
No, there are no foreign transaction fees.
Will my credit be deducted when I apply for a Robinhood Gold card?
Robinhood doesn’t do a hard pull on your credit until you accept the card offer.
What are the cash back perks and benefits of this card?
- Users can earn 3% cashback on all categories. This cash back can be transferred to brokerage accounts, which can lead to investments such as stock purchases.
- Users will be able to add up to five family members as cardholders to their account, with each cardholder receiving their own card.
- Cardholders can create and delete virtual cards for one-time purchases.
- Physical cards will be numberless, so if lost or stolen, users won’t have to exchange all of their card details.
Is Robinhood Gold FDIC Insured?
Robinhood offers up to $2.25 million in FDIC insurance through a network of partner banks.
You can view the full archive of Robinhood’s Gold Card announcing event below.
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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 feed and additional observations.
