Here’s the first thing to know about the new Robinhood credit card that promises 3 percent cash back on all purchases, without limits: Yesterday, when I asked Vlad Tenev, the company’s chief executive, to guarantee that it would stay at that level for 18 months, he would not.
Big-spending system-beaters take great delight in moving, say, $100,000 of their annual expenses to a new card, not carrying a balance, earning $3,000 in cash back each year and declaring themselves victors over foolish companies.
But Mr. Tenev aims to draw more than his fair share of people who are relatively new to credit cards and intends to approve nearly every gold member who applies. If those customers borrow, without defaulting on their loans altogether, they could be profitable for the company. Time will tell whether Robinhood has the underwriting skills to make this work.
The company doesn’t mince words. “Robinhood may make changes to the Rewards Program (including termination of the Rewards Program) or change the terms of this agreement at any time,” reads the third sentence of its
rewards rules.
It’s not fond of you system-beaters, either. The rules go on to say the company can cancel your card if you engage in “gaming” or if it believes you “may attempt to do so.”