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Robinhood announced on Tuesday the launch of its first credit card, which will offer a suite of premium rewards that includes a new travel portal that offers 5% cash back on purchases and 3% cash back on everything else. Those rewards are among the most generous in the industry, and signify that the company is intent on becoming a significant player in credit card sector as part of a larger push to offer a full suite of financial services, including retirement accounts.
The new card, named Robinhood Gold, will be available to those who have signed up for the company's $5-per-month subscription service of the same name. Meanwhile, Robinhood is also offering a limited edition version of the card that's made of 10 karat gold and weighs more than twice a typical card to those who sign up 10 others for the product.
The Robinhood Gold card also comes with a number of perks that are standard with upscale credit cards —no foreign fees, favorable car rental terms, and warranty protections. It also includes certain novel features such as a dedicated app to help manage spending and is integrated with Robinhood's primary app, as well as the ability to spin up temporary, disposable versions of the card that could be useful to benefit from gym or subscription offerings.
In an interview with Fortune, CEO Vlad Tenev said the new credit card offering reflects how Robinhood—which made its name as a stock-buying app for college students—has a growing number of clients who are more affluent, and who are willing to serve up for different product offerings. This development appears to validate cofounder Tenev's long-term vision for the company, which is that many of its young customers would stay with Robinhood and regard it in the same way as their parents do firms like Fidelity.
Robinhood has recently been trying to also boost its customer base with aggressive promotions. This includes the new credit card but also rewards of 1% to 3% for those who move their retirement accounts to the company. Tenev says that, in both cases, the offerings are designed to be profitable for the company in the longer term.
The credit card offering has been expected for some time after Robinhood acquired a card startup called X1 in July 2023 whose founder, Deepak Rao, has stayed on to build and launch Robinhood Gold. The new offering also comes at a time when financial firms have been making handsome profits in the credit card sector.
All of this reflects a recent upswing for Robinhood, whose share price is up nearly 100% since the start of the year and is currently trading around $19. This is a far cry from 2022 when Robinhood, following an IPO the year before, was in turmoil following an abrupt drop-off in trading following the meme-stock mania of the pandemic. That period saw Robinhood take billions in emergency loans after it faced a liquidity crisis due to congestion in the country's clearinghouse, and resulted in Tenev being cast as a villain in the anti-Wall Street film Dumb Money.