What if I instructed you there was a bank card that might pay you no less than 3% money again on on a regular basis purchases, supplied most of the prime perks you need in a bank card, and did all of it with out an annual price?
The brand new Robinhood Gold Card goals to do all of this stuff.
With a promise of three% money again on all purchases and as much as 5% money again on journey purchases, Robinhood is providing a few of the greatest money again returns accessible for a no-annual-fee bank card.
However there’s a catch: You should be a Robinhood Gold member to use. And it’s worthwhile to belief Robinhood together with your cash after some controversial techniques lately.
There’s a membership price concerned with that funding subscription, so this card will not be for everybody.
On this article, we’ll stroll via the specifics on this new rewards bank card and allow you to decide if it could be value a Robinhood Gold membership to accumulate it.
Desk of Contents
What Is the Robinhood Gold Card?
Robinhood Gold Card is obtainable by Robinhood Credit score, Inc., and is issued by Coastal Neighborhood Financial institution, Member FDIC.
The Robinhood Gold Card is a brand new rewards bank card that’s supplied completely to Robinhood Gold members. This brokerage membership, which prices $5 per 30 days, provides perks like enhanced APR earnings on non-invested funds. (Extra on this later within the article.)
The key advertising and marketing pitch for the cardboard is 3% again on all purchases no matter spending class with no annual price.
You’ll obtain these rewards as “factors” that may be transformed to money again in your brokerage account at a charge of 1 cent per level. There are another redemption strategies, nevertheless it’s value noting that straight “money again” or “assertion credit score” don’t look like choices. Meaning there could also be some further steps required to show your rewards into money in your pockets.
However, nonetheless, that charge of return is noticeably increased than the two% again supplied by most of the prime money again playing cards, such because the Citi Double Money® Card and Wells Fargo Lively Money® Card. It additionally tops the two.5% again that the Alliant Cashback Visa® Signature Credit score Card provides its prime tier members.
This card has extra going for it than only a good money again charge. It additionally provides perks and advantages which can be oftentimes reserved for playing cards with annual charges.
These embody:
- No international transaction charges
- No steadiness switch charges (Steadiness transfers are topic to APR curiosity)
- Auto Rental Collision Injury Waiver protection
- Prolonged Guarantee Safety
- Buy Safety
- Journey Interruption Safety
- Journey and Emergency Help
You may learn extra on the specifics of those Visa-backed advantages right here.
Word: This card is at the moment growing a waitlist for functions. However, finally, Gold members will be capable to apply for this bank card and revel in it with out a further annual price upon approval.
What Is Included with a Robinhood Gold Subscription?
Now that you realize the specifics on this money again bank card, you’re in all probability desirous to know extra in regards to the subscription membership that’s required so as to apply.
Robinhood Gold is a subscription service supplied by Robinhood that has been round for a couple of years.
There’s a $5 per 30 days (or $50 per yr) subscription price, which incorporates entry to the next perks:
- Enhanced earnings on idle money: Non-invested cash that’s stashed in your brokerage account can have the chance to earn 5% APR throughout nightly money sweeps by Robinhood. This cash will be FDIC insured on as much as $2.25 million through the use of the $250,000 max with 9 associate banks. This enhanced charge compares effectively to most of the prime high-yield financial savings accounts in the marketplace.
- Cash match for IRA deposits: Robinhood Gold markets a cash match of three% in your annual IRA contributions if carried out via your certified Robinhood account. There may be purple tape on this, together with subscription necessities and a size of time requirement for protecting your cash invested. Examine their FAQ web page on this for extra data.
- Prompt deposits for sooner investing: Gold members can get immediate entry to as much as $50,000 per day in deposits. For people who find themselves routinely making fast strikes out and in of the markets, this might be a really precious perk.
- Deposit boosts are coming quickly: Gold members are additionally promised to quickly earn further money by way of deposit enhance once they fund their account. This system isn’t stay but, nevertheless it supposedly will add a further 1% to the amount of cash you set into your brokerage account. To earn your full enhance, you should maintain or make investments your brokerage deposits for 2 years.
Is it Price Subscribing To Robinhood Gold for the Credit score Card?
So, now that you realize what Robinhood Gold is and also you’ve seen the perks of the bank card, you’re in all probability questioning if it’s value signing as much as get entry to the cardboard.
When you’re not already a Robinhood consumer, this possible depends upon your willingness to maneuver round some financial savings or funding funds. And your urge for food for doing enterprise with Robinhood after some irritating and unsettling headlines lately.
Cash skilled Clark Howard is mostly not a fan of Robinhood and doesn’t advocate signing up for Robinhood simply to get this bank card.
He believes it might be an possibility for present clients, however that there’s an excessive amount of danger that Robinhood may resolve to change the rewards program after sign-up for folks to hunt new membership only for entry to the bank card.
However in case you’re nonetheless on board, let’s check out a few of the methods you might “offset” the $50 annual price related to Robinhood Gold to entry the three% money again from the bank card.
Specializing in a number of of those strategies to offset the subscription price may make the Gold bank card seem to be deal.
1. Holding Some Financial savings within the Brokerage Account
Maybe the simplest approach to offset the Gold membership price is to put aside a few of your idle financial savings money within the brokerage account to accrue curiosity on the nightly money sweeps.
If the marketed 5% APR stays an possibility, you might maintain as little as $1,000 in financial savings to earn the $50 in curiosity essential to offset the $50 value for an annual subscription.
After all, you could wish to think about shifting greater than $1,000 to that account if the 5% APR is best than what you’re incomes in your present financial savings account. As of this writing, the nationwide common for financial savings account APR was hovering round 0.5%.
2. Seize an IRA Contribution Match
If studying about this provide has impressed you to take a step ahead in your retirement investing, that’s nice!
Accessing the three% IRA contribution match supplied to Gold members might be an effective way to offset the annual subscription price.
For a degree of reference, 3% of a $1,700 contribution is $51.
3. Spend with the Card in Excessive Quantity
When you’re not keen on holding cash with Robinhood, there’s nonetheless a means that you might justify paying the Gold membership price to realize entry to the bank card.
Successfully, you’d have to deal with this card as if it has a $50 annual price. So to make it value it, you’d have to spend $1,700 per yr with the cardboard to cowl the annual price. From there, any rewards you earned at 3% can be “revenue.”
When you’re questioning whether or not it’s higher to pay the price for this card as a substitute of merely having fun with a 2% money again card with no annual price, the breakeven level can be $5,000 in annual spending for the annual subscription value and $6,000 for the month-to-month subscription value.
Right here’s a desk breaking down the money again that may be earned at 3% versus utilizing a 2% card:
| Annual Spending | Robinhood Gold Card Money Again (3%) | Normal 2% Money Again Card |
| $1,000 | $30 | $20 |
| $2,000 | $60 | $40 |
| $4,000 | $120 | $80 |
| $5,000 | $150 | $100 |
| $6,000 | $180 | $120 |
| $8,000 | $240 | $160 |
| $10,000 | $300 | $200 |
| $15,000 | $450 | $300 |
| $20,000 | $600 | $400 |
| $30,000 | $900 | $600 |
Closing Ideas: Professionals and Cons
Are you contemplating including the Robinhood Gold Card to your pockets? Let’s overview a few of the main execs and cons of the cardboard earlier than you make your last resolution:
| Professionals | Cons |
| 3% money again on purchases no matter class | Should subscribe to Robinhood Gold to use |
| 5% again on purchases made via Robinhood Journey portal | No welcome bonus alternative |
| Card has a robust set of Visa-backed perks and advantages | Some shoppers might really feel uneasy investing with Robinhood |
Backside Line: If you’re out there for a brand new money again credit score and already do your investing with Robinhood, this card might be a no brainer addition to your pockets. That is very true in case you’re already paying for Robinhood Gold membership.
Nonetheless, shoppers who should not at the moment investing with Robinhood might have a harder resolution. You’ll have to weigh whether or not the perks concerned are value placing a portion of your cash into the Robinhood ecosystem.
Clark recommends that you simply keep away from this problem and stick to a special money again bank card.
In spite of everything, there are many good rewards bank cards in the marketplace that don’t require you to maneuver your investments round to earn rewards.
I imagine this card is value it if:
- You’re already snug with Robinhood and are investing a few of your cash there.
- You intend to spend no less than $6,000 yearly with the bank card.
- You will have a willingness to ebook journey via Robinhood’s portal to earn 5% again.
Are you a Robinhood buyer? Would you think about including this bank card to your pockets? We’d love to listen to your ideas within the Clark.com group.
