How can Robinhood afford 3% cash back on its new credit card?

Re:How can Robinhood afford 3% cash back on its new credit c... by BobaFloutist on Tuesday April 02, 2024 @02:56PM (#39909529)

It's, per the article, not really no annual fee, you can't get the card without paying them at least $50 a year for an account with them, where the cash ends up (and then you have to figure out how to extract).

On top of that the article makes the classic mistake of saying it pays for itself if you spend $166 a month, but it only really pays for itself if the marginal value of using the card over a generic 1.5% cashback card on the things you can't get 3% for already is more than $5 a month. Things like high cashback percentages for the first $X a month in specific categories make this intentionally hard to calculate, and are part of why I never really got into optimizing my credit card benefits. It's obnoxiously hard to compare.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by testval123 on Tuesday April 02, 2024 @03:29PM (#39909900)

There are no annual fee 2% cards without any hoops. If you don't care about the other perks for Robinhood Gold, the break even would be $50/.01 = $5000 of spend.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by Z_I_F_F on Tuesday April 02, 2024 @04:19PM (#39910434)

The fidelity credit card is exactly this if you use Fidelity for your checking account. 2% cashback on everything, goes directly into your bank account.

But the website and app UX for their credit card is awful. Everything is a hassle.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by coolspot on Tuesday April 02, 2024 @04:02PM (#39910255)

Citi DoubleCash is 2% on everything, no hoops, no annual fee.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by ahahahahah on Tuesday April 02, 2024 @04:22PM (#39910464)

Yes, that is an example of what parent said exists.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by BobaFloutist on Tuesday April 02, 2024 @08:34PM (#39912398)

You're right, but man does that take a couple of reads to parse!

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by coolspot on Wednesday April 03, 2024 @01:45AM (#39914010)

https://en.wikipedia.org/wiki/Garden-path_sentence

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by BobaFloutist on Tuesday April 02, 2024 @08:33PM (#39912396)

And again, that's $5000 of spend outside of categories you can get better in.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by dkjaudyeqooe on Tuesday April 02, 2024 @03:07PM (#39909638)

There are plenty of 2% cards (eg SoFi) and 3% cards for groceries (Capital One Savor). I spend the most on the latter.

If you use Amazon a lot you can get 5% back on that (Chase Amazon).

There are also 5% back for certain categories such as eating out, some time limited (Discover, Chase Freedom).

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by dangus on Tuesday April 02, 2024 @08:14PM (#39912250)

I wouldn’t count the Amazon card because unless you subscribe to Amazon Prime at $140 a year you can’t get that rate.

I canceled my Prime membership and instantly the reward rate dropped to 3%, which is a pretty crummy store card. Compare to Target as an example - 5% without the pricey subscription.

You have to buy an insane amount of stuff from Amazon/Whole Foods/Fresh to make that product make sense above and beyond other rewards offerings.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by dkjaudyeqooe on Tuesday April 02, 2024 @09:37PM (#39912741)

I don't disagree, but it's really the other way around, if you have Prime it's worth getting that card and the same for these other special cases, all depending where most of your spending goes.

In general cashback on cards isn't going to save you much money, but it's still nice picking up several hundred dollars worth of cashback over the course of a year.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by dangus on Wednesday April 03, 2024 @09:03AM (#39916899)

True, if you have Prime anyway it’s a no-brainer.

[ Parent | on HN ]

Re:How can Robinhood afford 3% cash back on its new credit c... by dkjaudyeqooe on Tuesday April 02, 2024 @09:33PM (#39912716)

There's also Paypal MAstercard which gives you 3% on all purchases using the card through Paypal.

[ Parent | on HN ]