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Robinhood, known for its commission-free stock trading, is entering the banking arena. The recent launch of their savings account and rewards debit card has made waves in the financial industry.
But is it all hype, or is it worth jumping on the Robinhood bandwagon? Here’s everything you need to know about the Robinhood Cash Card — including its features and how it stacks up to the competition.
Is the Robinhood Cash Card worth it?
The Cash Card is linked to your Robinhood brokerage account, allowing you to access your funds for everyday spending. Like most debit cards, you can use the card to make purchases and withdraw money from an ATM.
But what sets Robinhood’s debit card apart is its rewards program and ‘spare-change’ investing feature. You can round up your purchases and invest the extra change in stocks, cryptocurrency, ETFs, and other assets. You can also earn weekly cash back rewards.
Despite some limitations, the Cash Card may be worth it if you like the idea of growing your investments through your everyday spending.
Pros:
- Round-up saving program
- Cash back rewards
- No fees
- Ability to invest spare change and rewards in crypto or stocks
- Earn weekly cash bonuses
- Receive direct deposits early
Cons:
- Brokerage account required
- No cash or check deposits
- Not accepted in some countries
Key features of the Robinhood Cash Card
Robinhood’s Cash Card works like any other debit card, but comes with many unique benefits.
You can use your Robinhood Cash Card anywhere Mastercard is accepted. The card doesn’t charge monthly fees, in-network ATM fees, or overdraft fees. You also don’t need to maintain a minimum balance.
The Cash Card has standard security features like Mastercard Zero Liability Protection and FDIC insurance. If you need cash, you can access a network of 90,000 ATMs (up to a $510 daily limit) or send a check.
The key feature of the Robinhood Cash Card is that it helps you invest as you buy things. This is done in two ways.
Round up investing
Like Acorn, Chime, and other spare change investing apps, the Robinhood Cash Card allows you to round up your debit card purchases to the nearest dollar and invest the difference. For example, if you spend $14.20 at the grocery store, you can round up the sale to $15 and use the extra 80 cents to buy stock, cryptocurrency, or other assets.
You also can receive an extra bonus ranging from 10%-100% of your weekly round-up total up to a $10 limit.
Cash back rewards
You can earn cash back rewards on a rotating list of retailers, including Nike, Wayfair, and Macy’s. The rewards you can earn vary depending on the offer, typically anywhere from 1%-8%. You also earn 2% on all eligible purchases at gas stations and grocery stores when you set up a monthly direct deposit of at least $300 into your Robinhood account.
Other perks include getting paid up to two days earlier via direct deposit. You can also split your paycheck and invest part into your brokerage or cryptocurrency account.
Limitations of the Robinhood Cash Card
While the Robinhood Cash Card offers several advantages, there are some downsides to consider.
The Cash Card does not accept cash or check deposits. If you need to deposit money into your account, you’ll have to transfer it from an external account.
This card also has limited international accessibility. You can’t use your Cash Card in over 80 international destinations, including Brazil, the Philippines, and the Czech Republic. This can be a drawback for travelers.
While there’s no fee for bank transfers, the Cash Card is not entirely fee-free. Instant debit card or bank account withdrawals carry a 1.5% fee. If you’re making a third-party transaction and it’s declined because you don’t have sufficient funds, the third party may charge a fee. You may face charges using an out-of-network ATM.
Should you get a Robinhood Cash Card?
Deciding whether to get the Robinhood Cash Card depends on your situation and how you plan to use the card.
If you already have a Robinhood brokerage account — or plan on signing up for one — the Cash Card may be a great idea. It makes it easy for you to invest extra money and integrates with your existing account.
If you’re not already earning cash back from another card, the weekly rewards can help you get more from your spending.
For anyone else — the Cash Card is probably not the best option for you. Consider a different debit card if you’re looking for standard features like cash or check deposits. If you’re not a Robinhood user but still want to earn rewards, consider other cash back debit cards.
Alternatives to consider
The Robinhood Cash Card can help you grow your investing portfolio, but it’s not the only debit card with this feature. Here’s a breakdown of similar cards.
- Acorns Debit Card: Like the Robinhood Cash Card, this debit card from the investing app Acorns allows you to round up your transactions and invest the spare change. There are no balance requirements to worry about, and you get access to direct deposit paychecks up to two days early. You need to have an Acorns membership to access the debit card. Unlike the Cash Card, you won’t earn cash rewards on purchases with your Acorns debit card.
- Crypto.com Rewards Visa: This prepaid debit card helps avid crypto users easily access and spend their digital currency. You can transfer funds to your Crypto.com app account, which are then converted to crypto assets you can spend or invest with your Crypto.com Rewards Visa Card. This card offers rewards, but you must invest and hold on to at least $400 worth of the platform’s crypto to qualify.
If you’re most interested in earning rewards on your spending, consider a flexible rewards card or a cash back credit card. Other credit cards, like the Venmo Credit Card, also allow you to use your cash back rewards to buy crypto.
The bottom line
The Robinhood Cash Card offers a distinct way to build your investments from your debit transactions.
If you’re already a regular Robinhood user, the Cash Card can be an effective tool to grow your portfolio with little effort. But the card’s limitations, especially for those who need to deposit cash or earn other rewards, may make the Cash Card not the best choice.
Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.