The new Venmo credit card was announced today, offering a unique cashback rewards structure. Unlike other cards that have fixed or rotating reward categories (such as 3% cashback on travel, 2% on gas, or 1% on miscellaneous purchases), the “Venmo Personal Rewards” ensures that you earn the highest rate on the things you spend the most on, even if that changes from month to month.
What is the new Venmo credit card?
The new Venmo credit card provides a unique cashback rewards structure based on the primary spending categories of cardholders each month. The top spending category earns 3% cashback, the second-highest category earns 2% cashback, on up to $10,000 per year. Any amount over that (and everything else) earns 1% cashback. The card does not charge an annual fee. Making a personal payment to someone using the Venmo credit card incurs a 3% transaction fee, even when using the Venmo credit card.
Customized rewards for each spending category
This new idea of customized rewards is unique, as it guarantees that cardholders will always earn the highest rate for their primary spending category. Other credit cards either have fixed reward categories or rotate the highest earning categories each quarter, although some cards allow users to choose their top categories. Conversely, the Venmo card automatically adjusts the highest earning categories each month based on individual spending habits.
Cardholders receive 3% cashback for their primary spending category for the month, 2% for the second-highest category, and 1% for all other purchases. So, if you spend the most on entertainment and the second most on gas this month, you will earn 3% and 2% respectively in those categories. But next month, if you book an expensive trip and your grocery bills climb high to make travel and groceries your top spending categories, the 3% and 2% will shift to reflect that. There are eight categories: grocery; bills and utilities; health and beauty; gas; entertainment and dining; transportation; and travel.
Additional details and warnings
The Venmo credit card has slightly different reward categories than those typically rewarded by other cards. For example, the health and beauty category includes pharmacy purchases and gym memberships, which may be treated separately by other banks. The card’s rewards terms and conditions provide a full breakdown of the categories.
There is a limit to the offer, and the 3% and 2% cashback rewards apply only to the first $10,000 you charge in your highest spending categories each year. The counter resets on the anniversary date – the account opening date – so if you opened the card in October 2020 and spent $10,000 in your highest spending categories by August 2021, you would only earn 1% cashback on all purchases until October 2021.
The Venmo credit card comes in five colors and features a unique QR code that can be scanned by a mobile camera or in the Venmo app. Similar to the QR code for the Venmo app, this allows you to initiate payment from the card or give friends an easy way to send or request a Venmo payment. Now you can use the Venmo card to cover dinner costs, and you can then apply friends’ contributions paid via Venmo directly to your credit card balance.
It’s worth noting that paying someone through Venmo using a credit card incurs a 3% transaction fee, and there are no exceptions when using the Venmo credit card, which is contrary to guidance and could quickly erode the rewards you’ve earned.
Once
The approval of the Venmo credit card, issued by Synchrony Bank and operating on the Visa network, allows you to manage everything directly from the Venmo app. In fact, any cash back earned is automatically added to your Venmo account at the end of each statement period. You can use your earnings to pay your credit card bill, send money to friends on Venmo, or make purchases through the app.
It’s also worth noting that the Venmo credit card does not have any annual fees or foreign transaction fees, and the variable interest rate ranges from 19.49% to 28.49% based on creditworthiness. There is no welcome bonus yet, which may be a missed opportunity to attract reward shoppers looking for some additional incentives. The Venmo card also features contactless payment technology.
Source: https://www.thebalancemoney.com/new-venmo-credit-card-rewards-adapt-spending-5080773
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