Is the Buzzy Robinhood Gold Card Worth it? (2024)

Investment app Robinhood recently announced its first credit card, and its high cash-back rate is turning heads—as is the company’s promise to give some users 10-karat gold cards.

Gimmicks aside, with an offer of 3% cash back on all purchases, the new Robinhood Gold Card has the potential to be the highest-earning flat rate cash-back credit card on the market, but there are some important caveats.

The card is expected to launch later this year. Prospective customers can now join a wait list. You’ll also need to be a Robinhood Gold member to sign up, which comes with a subscription fee, but also includes some valuable, noncredit card perks.

For existing Robinhood Gold customers, this card is an easy way to earn an industry-leading rewards rate. But even if you don’t currently have a membership, the earning rate and other benefits might make it worth signing up.

Are the rewards worth the fees?

The Robinhood Gold Card doesn’t charge an annual fee on its own, but to be eligible to apply, you’ll need to have a Robinhood Gold membership. That membership costs up to $6.99 a month for a 30-day subscription or up to $75 a year for an annual subscription, following a 30-day free trial. (This is similar to the Prime Visa, which also doesn’t have an annual fee—unless you count the required Amazon Prime membership.)

Even with this cost in mind, earning 3% on all purchases can easily outweigh the fee and still earn you more in rewards than even the top no-annual-fee rewards cards. By our estimates, if you spend about $625 a month ($7,500 a year) you’ll earn enough to cover a $75 annual fee and still collect more rewards than you would with a card that earns 2%—the current leading rate. That’s significantly less than the $3,000 a month we estimate the average Wall Street Journal reader spends on credit cards.

For instance, consider you have the Wells Fargo Active Cash Card, Buy Side’s current top pick for a cash-back card. It earns 2% on all purchases with no limits. If you spend $3,000 a month, you’ll earn $720 in a year with this card. With the same spending on the Robinhood Gold Card, you could earn $1,005 once you subtract the annual fee. That’s nearly $300 more in cash back over the course of a year.

One important note: The Robinhood Gold Card doesn’t come with a welcome bonus. Other cash-back cards offer $100 to $200 for meeting a spend requirement in the first few months. Still, while other cards could bring you more in rewards the first year, the Robinhood Gold Card can earn you more over time.

That is assuming the 3% rewards rate lasts. The company’s credit card rewards terms allow it to make changes at any time, and other brokerage firms that have offered enticing credit card incentives have been known to eventually drop them.

That said, credit card rewards aren’t the only valuable Robinhood Gold perk. As a Robinhood Gold member, the cash back, which automatically goes into your Robinhood brokerage account, will currently earn 5% interest, which is competitive with the best savings account interest rates available today. Other Gold benefits include access to larger instant deposits, professional stock research from Morningstar and extra buying power with margin investing (though inexperienced investors should proceed with caution before buying stock on margin).

Card details you might miss

The cash back rate on the Robinhood Gold Card is certainly valuable, but the card also comes with other perks that can add value for the right cardholder. Here are some details to know:

• Get an actual gold card. If you join the wait list for the Robinhood Gold Card and refer at least 10 friends, you can get a card made of 10-karat gold.
• No foreign transaction fee. When you use your Robinhood Gold Card abroad, you won’t be charged an additional fee on your purchases. This is a particularly nice benefit on a cash back card, as it is more commonly seen on the best travel credit cards
• All redemptions earn the same 1 cent per point value. Whether you redeem your rewards for cash back into your Robinhood brokerage account, purchases in the travel portal, gift cards or shop with points, you’ll get the same 1 cent value.
• Grow your rewards. Cash back is deposited into your Robinhood brokerage account. You can withdraw it, but as a gold member you’ll earn 5% interest on uninvested cash.
• Get higher instant deposit limits. Rather than have to wait for deposits to hit your Robinhood account, the service allows users to access up to $1,000 instantly. With the Robinhood Gold Card, you’ll get even higher instant deposit limits of up to $50,000, depending on your portfolio.

Who could benefit most from the Robinhood Gold Card?

Because you have to have a Robinhood account and Robinhood Gold subscription to qualify for this card, it makes the most sense for those who already invest with the platform and pay for a membership. If you’ll take advantage of other Robinhood Gold benefits anyway, the 3% cash back rate makes signing up for the credit card a no-brainer.

If you don’t currently have a Robinhood account or prefer to invest with another brokerage platform, it is a bit harder to get value out of this card. While it’s easy to offset the fees for a Robinhood Gold subscription with the high earning rate, cash back is redeemed into your Robinhood brokerage account rather than an external account, making it a bit more difficult to spend on other purchases. (Note, you can always transfer money out of your Robinhood account, but it requires an extra step.)

You’ll need to be confident you can redeem your rewards for Robinhood investments, gift cards, travel purchases or shopping with points in Robinhood’s platform before signing up for a membership.

Methodology: How we evaluated the Robinhood Gold Card

To evaluate cash back credit cards, Buy Side from WSJ gives priority to rewards rate both overall and in popular spending categories such as groceries or travel. We also consider other card benefits including welcome bonuses, fees and introductory APRs.

To find out more about how we choose credit cards—and to meet our panel of experts—you can also check out Buy Side from WSJ’s full credit cards methodology.

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