Your de facto app for splitting tabs and paying rent is officially rolling out its very own rewards card. But before you take the leap on this acceptably okay Venmo credit card, let’s take a closer look at the fine print.
Today Venmo became the latest fake bank to launch a credit card. Like it’s fake bank parent company PayPal, Venmo announced that it’s partnered with Synchrony—the company behind the PayPal Cashback Mastercard—on a Visa rewards card that offers cashback in your top-spend categories.
How this works is by tracking your monthly spending across eight categories: grocery, bills and utilities, healthy and beauty, gas, entertainment, dining and nightlife, transportation, and travel. Depending on how you spend during a given statement period, Venmo will issue 3% cashback in your top category, 2% in your second highest-spend category, and up to 1% on your other transactions.
Cashback is issued to your Venmo account, where you’ll be able to either use it like you would any other balance in your account or transfer it to your bank or debit card. A spokesperson told Gizmodo that users can transfer up to $3,000 at a time or $20,000 per week to their bank account. (If their identity hasn’t yet been verified, they can only send up to $1,000 per week.)
You’ll also want to be cautious because Venmo lacks the protections of money transfers actual banks have. If you Venmo the wrong person you could be out any cash you sent.
You can control notifications and settings for the card within the Venmo app, it features an RFID-enabled chip for touchless payments, and there’s no annual fee. An on-card QR code can be scanned by friends to pull up your Venmo account in the app, which may come in handy when we’re all able to safely dine out again with friends and family.
But beyond that, the Venmo card is, well, just fine. A Venmo spokesperson told Gizmodo by email that cardholders can earn unlimited cashback for their first year, after which time they’ll be capped on rewards after $10,000 spent in the aforementioned categories (though they can continue to earn 1% on all qualifying purchases). APR will depend on your own credit history, ranging from 15.24% to 21.24% to 24.24%.
Unfortunately, though, there’s no promotional APR-free period and the card does not offer cashback matching—benefits offered by even fee-free cashback cards like Discover It. Other cards also offer up to 5% cashback in some categories, but they’re often limited by quarterly cycles or capped rewards earnings. The Venmo card automatically rewarding your top-spend categories is a nice perk over having to keep track of where you’ll earn the most rewards in a given quarter. And if you are really into min-maxing your rewards it could be useful for applying to categories not regularly covered by existing cards.
In other words—while not necessarily the best rewards card option out there—if you’re looking for a way to passively get more mileage out of your overall spend, aren’t interested in paying for a rewards card, are already a regular Venmo user, and don’t mind your rewards earnings getting dumped into the app, the Venmo card would likely do the job.
Added additional information about cash transfers.