FinTech News
Robinhood Makes Changes to Cash Card Debit Card Program
The stock trading app Robinhood has rolled out a pair of tweaks to its debit card offering.
About the updates:
Robinhood has announced some key changes to its Cash Card program — which itself was a replacement and overhaul of the company’s previous Cash Management account.
First, the Robinhood Cash Card will be dropping its weekly round-ups match feature. Previously, cardholders could opt into a program that would round up their debit card purchases to the nearest dollar and automatically invest the spare change. Then, each week, customers with eligible round-ups would see between 10% and 100% of their round-ups matched by Robinhood (with a cap of $10 in bonuses per account per week). While the round-ups option itself will remain, the weekly matching element has been removed as of August 22nd.
Despite the loss of this benefit, Robinhood is introducing new cashback opportunities for Cash Card customers. Now, users can earn up to 2% on eligible gas and grocery purchases. To unlock this perk, cardholders will need to receive direct deposits totaling at least $300 a month into their account. Additionally, this 2% benefit is capped at $500 a month in combined gas and grocery spending.
This new 2% category perk also joins other cashback benefits of the card that were added last year. For example, some current offers as of this writing include 2% back deals from Auntie Anne’s, Outback Steakhouse, GAP, and others as well as 5% back from Allbirds, 7% at Dell, and more. These offers do not need to be activated to be used, but certain restrictions may apply and customers will need to pay with their Robinhood Cash Card in order to earn the cashback.
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My thoughts:
Funny enough, while I thought that Robinhood’s weekly round-up match program was interesting, I didn’t end up having a chance to try it for myself. That’s likely because the potential benefit was usually outdone by one of my rewards credit cards. Speaking to that point, while the 2% cashback on gas and groceries perk may be nice for some, the need to unlock it via direct deposit and the fact that its only 2% make it less than competitive (since there are several cards that offer a flat 2% back or more on all purchases, as well as cards such as the Capital One SavorOne that feature 3% back on groceries).
Of course, not everyone is a fan of credit cards. So, for those customers who prefer to stick with a debit card, this may be a better option — and may, in fact, be an improvement from the weekly match since the new cashback feature is more predictable. Either way, it will be interesting to see whether this change ultimately helps or hurts Robinhood’s debit card offering.
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