FinTech News
Coverd Card Launches, Offering “Up to 100% Cash Back”
A unique credit card with variable rewards rates has officially launched.
About Coverd Card:
Recently, the a16z-backed FinTech startup Coverd debuted its unique Coverd Card, which offers up to 100% cash back on eligible purchases. In fact, the company says that it’s already paid out more than $25 million in rewards. The Coverd Card is accepted wherever Visa is.
The star feature of the Coverd Card is its rewards. Rather than being mysteriously randomized, the card offers a rewards rates chart on its site, which is updated hourly. This table breaks down purchases by category as well as spending amount. It appears as though the lowest rate is 3.5x.
Featured categories include Groceries, Dining, Travel, Fuel, and Retail — with all other purchases falling under “Other.” In addition to the hourly table, there are also Surge Rates. For example, while writing this, it noted that a 100x rate would apply to Travel purchases between $50 and $200 starting at :39 and lasting for three minutes.
Note that the rates in the rewards table only apply to the first qualifying purchase in a category while that rate is active. Purchases after that will earn 0.5x. Additionally, there’s a monthly cap in place, based on the prior month’s spending. Specifically, cardholders cannot earn more than 100 Coverd Points for each dollar on their prior statement.
There’s also a gamification element to Coverd. While cardholders can choose to directly apply their earned rewards as a statement credit, they can also use them for an “in-app game experience” for a chance to have their entire statement balance covered.
What They’re Saying:
Discussing the Coverd Card, Coverd founder and CEO Albert Wang said, “The rewards landscape has devolved into a stagnant, innovation-starved industry. We are launching the Coverd Card to change that.”
Wang continued, “Everything we do is anchored in one principle: rewards should be empowering, not infantilizing. Instant cash back, on the purchases that define how people actually live, to give our users the freedom to spend them however they choose.”
Elsewhere, Andreessen Horowitz Speedrun partner Josh Lu said of Coverd, “Just as Duolingo redefined how a generation learns languages and Kalshi brought prediction markets into the mainstream, Coverd is defining an entirely new category in consumer payments. The appetite for interactive, experiential financial products is real and it is growing. Coverd is the first company to bring that to everyday spending in a way that actually works at scale.”
My Thoughts:
Reading the press release and looking at the rewards chart, I knew that there had to be a catch here —and I guess it’s the monthly cap to points, which is based on your previous spending. I’m not a mathematician, so I haven’t run the numbers to see if that makes the return rates more reasonable. Of course, it’s also possible that we’re seeing a higher base rate now to entice customers and will see this adjusted downward later (as we’ve seen with several FinTechs in the past).
Ultimately, while I give Coverd credit for trying something interesting, I can’t really see this taking off. Also, I’m concerned about this “in-app game experience” that makes it sound as though customers will be risking their earned rewards for a shot at more (although I’m not 100% sure that’s the case). Either way, though, this card doesn’t sound like it’s for me — but I’ll be keeping an eye on Coverd going forward.
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