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On a hypothetical list of the most rewarding credit cards, investment banking platform Robinhood's soon-to-be-made-available cash-back product may top the list. However, this product isn't one that'll fit every wallet. In fact, it may be worth passing on unless you're keenly aware of the ins and outs of what you're signing up for.
Here's what you need to know about the prospective Robinhood Gold Card.
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Here’s What We Know About the Robinhood Gold Card
The Robinhood Gold Card will debut later this year. And if nothing changes with the teased cardholder benefits when it's released to the public, it'll quickly become a favorite of many a person with a Robinhood account. The primary reason for this will be the Gold Card's industry-leading uncapped cash-back earning rates.
However, before registering your interest with Robinhood, you should be aware of a few caveats with the card; it won't be for everyone.
Gold Card earning structure
We like cards that handsomely reward your spending. This card passes the test with flying colors. When you swipe the 17 grams of stainless steel Robinhood Gold Card, you'll earn:
- 5% cash back on travel booked through the Robinhood travel portal.
- 3% cash back on all other purchases.
The credit card's crowning feature is the 3% cash back rate — denominated in points. By comparison, most cash-back cards top out around the 2% mark.
However, unlike most traditional cash-back credit cards, you can't cash out for a statement credit to your bank account. There are only four ways you will be able to redeem your rewards:
- Convert your points for cash back in your Robinhood brokerage account.
- Shop with points in Robinhood's travel portal.
- Purchase merchandise through Robinhood's shopping portal.
- Redeem points for gift cards.
No matter how you choose to redeem, you'll always get a value of 1 cent per point on redemptions. Simple and fair.
Related: The Best Cash-Back Credit Card Offers for Every Budget
Gold Card annual fee
Robinhood brands the card as a no-annual-fee product, but that's only slightly deceptive. The card is limited to those with a Robinhood Gold account, which costs $5 per month — or $50 if you commit to an entire year. This breaks out to an effective annual fee of $50 or $60, depending on how you pay for Gold.
So, what's Robinhood Gold? In short, it's a handful of features that you can add to your brokerage account, such as:
- The ability to earn interest on uninvested cash.
- Larger instant deposit limits.
- A 3% match on IRA contributions.
- Expanded market data and research.
- An 8% interest rate to invest on margin (standard is 12%).
For serious investors who can leverage the tools, there's merit to upgrading your brokerage account to Robinhood Gold. However, there's limited upside to paying for Gold for the casual investor or cash-back chaser unless you just want to apply for the Gold Card.
Related: Our Favorite Benefits on Credit Cards With No Annual Fee
Robinhood Gold Card details and benefits
The Visa Signature Robinhood Gold comes with a host of additional benefits. Presently, details are slim on the scope of the benefits, but there's a lot to like about the headlines. Cardholders can soon enjoy:
- Trip interruption protection
- Purchase security
- Auto rental collision damage waiver
- Extended warranty protections
- Return protections
- Zero liability protections
- Visa Signature Concierge services
- Travel/Emergency assistance
- Roadside dispatch
- No foreign transaction fees
Robinhood shares that the card was “designed for the whole family.” And to that effect, you can add authorized users of any age, track family spending, and set spending limits.
Related: 22 Credit Card Benefits Every Traveler Should Know About
Concerns with the Robinhood Gold Card
The combination of cross-selling trading products and branding the Robinhood Gold Card as family-oriented can raise some red flags. Much concern is due to the potential unintended consequences of having access to the power of Robinhood Gold.
For instance, after signing up for a Robinhood Gold account — depending on your financial profile — you'll immediately have access to up to $50,000 worth of instant daily deposits. That's a lot of money that can easily be moved around without strings attached until Robinhood debits it from the linked bank account.
Plus, if not respected, trading on margin can present further unintended consequences through potential financial loss. Sure, you must apply for a margin trading account, but the marketing is fluffy enough to attract younger or naive eyes.
That said, it's worth being extra cautious about who has access to your account — or pausing if a younger member of your household is inquiring about Robinhood Gold or the high-flying Robinhood Gold Card. This is an atypical setup compared to virtually every other credit card one could apply for.
Related: A Beginner's Guide to Building Healthy Credit
Final Thoughts
The Robinhood Gold Card is an intriguing product. It's hard to think of another credit card with an earning structure that meets or exceeds 3% cash back on every dollar spent.
Plus, for those with a Robinhood account, having the option to deposit your rewards and invest them is a valuable proposition. It's an easy way to grow your wealth. On top of that, the Robinhood Gold product offers a solid suite of products for serious investors. You can't get the card without paying for Robinhood Gold, and there's a lot to like about it if you respect it.
However, this card isn't for every wallet. Aside from the card's effective $50–$60 annual fee (compare it to a no-annual-fee 2% cash rewards card like the Wells Fargo Active Cash® Card), there are drawbacks with how you can redeem the rewards. You can't cash out to your bank account like most cash-back cards. For some, that's enough reason to pass on the application when it goes public later this year.
But for those who understand the ins and outs and find the Robinhood Gold Card intriguing, you'll be hard-pressed to find a more rewarding wallet companion.
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