The Venmo credit card is here!
If you haven't heard of Venmo, the super popular app that allows users to send money back and forth has launched it's first credit card – the Venmo Credit Card!
Venmo has offically entered the credit card game. Their new credit card at this point in time will only be available to 5 – 15% of Venmo users during inital trial phases as of now.
The expected plan is that by the start of the New Year, the new credit card will be readily available for all users.
In todays article we’ll discuss a few key points about the card including:
- The cashback/point reward system,
- Pros and cons of the Venmo Credit Card
- Who the card best suited for,
- Terms and conditions, and an overall take!
Let's take a look!
The Venmo Credit Card Review:
Venmo originated in 2009 when Andrew Kortina and Iqram Magdon-Ismail met at the University of Pennsylvania and created the fee-free digital way of sharing money.
If you're someone who is in their 30's, you can probably remember the times when you split a case of beer or a pizza in college and your friends would “Pay you back,” and they never did.
A novel idea that was later acquired as a subsidiary of PayPal, Venmo has helped people share money back and forth for things like rent, food, travel and more.
And they just released their Venmo credit card!
The Venmo credit card partner is not PayPal, while PayPal does own Venmo, it is not the partner that provides the card, their partner and issuer is Synchrony Bank.
Synchrony is notorious for being the partner credit card for a lot of retail stores and stores in general (i.e. Lyft, eBay, Old Navy, TJX stores, Gap, JCPenny, etc. their portfolio is about 100 + different stores).
While Synchrony shines in it's countless partners, a potential issue is… most of these cards are… awful. Typically, these cards can only be utilized at that specific store with not so awesome credit card terms.
In the case you are able to utilize the card elsewhere (like a regular credit card), the rewards are subpar or the reward system can only be utilized for that specific store.
That being said, while other Synchrony credit cards may not be ideal, the Venmo credit card will be available to use like a normal credit card!
What is cool:
If you happen to be someone who is looking for a stylish credit card to fit your wallet, the Venmo credit card offers a variety of different colors you can choose from (Now remember, saving money is always better than spending while looking cool).
Each card has a unique QR code on it that is connected to your Venmo account, which that in it of itself an orgional concept.
This allows a friend to scan the QR code on the card and send money that way. Lastly, a quick feature that makes the card worth applying for is the Venmo app and credit card has no annual fee.
Other than that, its just like any other credit card, but let's start with rewards.
[Similar Read: See my complete Acorns App Review here. ]
Venmo Credit Card Pros & Cons:
Here are the quick pros and cons of the new Venmo Credit Card:
|– 3,2,1 Cash Back Rewards||– NO sign up bonus|
|– Rewards highest spending categories||– NO travel rewards|
|– QR code & colors||– $10,000 rewards max|
|– Can be used for all stores/shopping||– Fine print is not overly easy to figure out|
Venmo Credit Card Rewards:
Perhaps the biggest perk most credit card users look for, is the rewards. The new Venmo credit card has a simple and straight forward reward system:
- 3% cashback on your top spend category
- 2% back on your second top spend category
- 1% back on everything else
This is actually pretty unique as most cards give specific rewards on let's say fuel only or food.
However, at the end of every statement, the spending category where you spent the most money rewards users with 3% cashback, followed by the other category receiving 2% cashback. ALL other purchases see 1% cashback.
For example, in the photo above if you specifically use the Venmo Credit Card for let's say groceries and fuel only, you would be able to track your spending and earn more money back by keeping all purchases on one card!
An interesting selling point we found was that Venmo promotes that “Venmo does the math” for the cashback rewards you earn, as opposed you doing the math.
I don't know how many people are sitting down and figuring out how much cashback they should earn at the end of the statement. It is a strange promotional point considering that LITERALLY every other credit card calculates the cashback/points earned at the end of the statement and deposits them in your account.
While this isn't groundbreaking news, the reward for your top spending category is a pro!
That being said, the fine print is always important to consider before using a new credit card…
[SEE The Best Prepaid Cards Here]
Venmo Credit Card Terms & Conditions:
In taking a look at the terms and conditions and other legal documents and lo’ and behold, you’re capped at $10,000 in spending to earn the 3% and 2% rewards in the first year of owning your new Venmo credit card.
After that, you earn only 1% until your anniversary. This means if you happen to spend $1,000 per month for 10 straight months, you would earn a max of $300 in rewards before dropping down to 1%:
Similar to most credit cards, it's in the fine print, however, we had to dig up this information. Nowhere does it say “you’re capped at $X for the year” in any of the promotional material.
Meanwhile, other credit card issuers are upfront and say “you’re capped at $X for a year” and it's consistent with other financial institutions. So if we are ranking transparency, the Venmo credit card get's a 1/5 here.
See other credit card promos below and you will see what we mean:
Essentially, you can get more value with a 2% cashback card such as the Citi Double Cash, or even a card that earns 1.5% like the Quicksilver from Capital One or The Chase Freedom Unlimited mainly because these cards are not capped at any amount you can spend.
So if you spend more than $10,000 per year, the Venmo card is most likely not worth it.
No Travel Perks –
Most credit card rewards are redeemed for free travel, at this point in time, Venmo’s credit card does not offer anything to utilize for travel and they don’t provide a travel portal site to redeem free flights, hotels, etc.
The credit card connoisseurs and veterans look for anything that can be utilized for sometimes just that. They also look for a nice welcome bonus… which by the way…
No Welcome Bonus –
At this point in time, no welcome bonus is being offered for the card, however, I believe this is subject to change. PayPal entered the credit card game and its a vastly competitive sector in finance.
The card can either succeed or flop depending on what direction it takes in the following years. There are also a lot of different issuers offering higher rewards, big welcome bonuses, free credits, etc.
For now, they’ll just collect data on their Venmo users and restructure the card to something more appropriate for the average Venmo users palate. Furthermore, PayPal would not mind throwing a bit of capital towards a welcome bonus.
The same is applicable for the Apple credit card… Apple is just slowly collecting data and would be foolish if they don’t revamp their card to offer new perks.
Square’s Cash App is taking notes, my prediction: they release their own credit card by next year (2021)
The New Venmo Credit Card – Who is it for?
Lastly, who is the Venmo Credit Card for?
We can automatically deduct any welcome bonus chasers (credit card churners) or any travel enthusiasts. As stated earlier, if you're looking for a sign up bonus or rewards for travel – this Venmo credit card review should tell you that this is not the card for you!
However, this card is perfect for those that are beginning to build credit, the younger folks such as myself that utilize Venmo frequently and who split bills via Venmo, and those who don’t necessarily exceed that $10,000 spend threshold per year.
If you're someone who likes to have one card for fuel, one card for grocercies – or something similar – this may be a decent option.
Our final take – wait.
This card is still being rolle out and there may be better options that come along with it down the road!
Personally, right now it seems to be just an Apple card minus the metal aspect, I do, however, have really high hopes for this card.
First, I want to see how it progresses in the future. Who knows, its currently in talks with Apple to see if they can include them in their wallet app, they can one-up them and say “we’ll give you 3% back if you utilize your card via apple pay,” which then it could be very nice incentive to use the new Venmo Credit Card!
Jimmy the founder of the personal finance blog The Compounding Dollar where he writes about investing and individual stocks. Rather than focusing on ETFs and mutual funds, Jimmy loves discussing stocks and has been investing since he was in high school! He also enjoys writing about business news, credit cards, entrepreneurship, and making money on the side. In his words, “My goal is not just to educate and inform, but also entertain readers by making money talk fun!”