Robinhood Launches Debit Card with Auto Savings

Calling it part of its “mission to democratize finance,” brokerage app Robinhood has launched the Cash Card to help new customers start investing.

The card, offered by Robinhood Money LLC and announced on the company’s website Tuesday (March 22), gives debit card customers “the same benefits and rewards” typically reserved for credit card holders.

“We’ve seen a new generation change their relationship with money, moving away from credit card debt, cash and making more digital transactions,” the company said.

The announcement points to a recent survey that showed just 17% of Gen Z say a credit card is their preferred payment method, versus with 46% of millennials and 47% of baby boomers.

The cash card will replace Robinhood’s Cash Management product, where customers’ investing and spending cash were all part of their brokerage account. With the new card, customers can sign-up and see separate accounts for investing and spending.

Robinhood said it will cease taking sign-ups for Cash Management and open a waitlist for the card. However, some existing Cash Management customers will get access to the cash card beginning this week.

The card will give customers a bonus of 10 to 100% (capped at $10) on their weekly round-up. As customers spend, they can round-up their change to their nearest dollar and invest in in whatever asset they choose.

Starting this summer, the card will also offer customers savings when they shop at businesses such as H&M, Chevron and Chipotle, with more due to be added. In addition, Robinhood said the card can let customers access their paycheck up to two days early and “split their paycheck to automatically invest in assets in their brokerage and crypto accounts.”

Read more: Robinhood Preps Mobile Feature to Allow Users to Lend Stock

Last week, Robinhood said it was proceeding with a plan that would let users loan out their stocks to other financial institutions in a bid to compete with more traditional brokerages.

The service, called the Stock Loan Income Program, would rival similar programs from firms like Morgan Stanley, Fidelity Investments and Charles Schwab Corp, which allow investors to earn passive income by loaning their stocks.