Money at 30: Venmo Credit Card Overview

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Money at 30: Venmo Credit Card Overview

Last year, following a few months of teasing, the Venmo Credit Card made its grand debut. With a novel reward structure, bright-colored card designs, and app integration, the card made a bit of splash. However, in the time since that announcement, the card itself had only been offered to select users. Well, that was until this past week when Venmo seemingly opened the credit card to all current customers.

Now that the Venmo Credit Card is now available to all Venmo users, let’s take a look at what this card has to offer — and whether or not I plan on applying for it.

What You Need to Know About the Venmo Credit Card

What is the Venmo Credit Card and how does its rewards work?

Not to be confused with the Venmo Card debit card, the Venmo Credit Card is a new cashback rewards card issued in partnership with Synchrony Bank. Unlike most credit cards that offer multipliers in specific spending categories, the biggest rewards on the Venmo Credit Card correspond to those categories in which a cardholder spends the most. What’s more, these categories will automatically update each month based on your actual spending.

The way these rewards work is like this:

  • 3% cashback on your top spend category  
  • 2% cashback on your second top spend category 
  • 1% on all other eligible purchases

Notably, the 3% and 2% categories are capped at a combined $10,000 in spending per year — although this cap is waived for your first year. After that, though, your cap will reset based on your cardholder anniversary date. Any purchases over the limit will earn the standard 1% cashback.

At the end of each statement period, any cashback you earn will be added to your Venmo account. From there, you can transfer them to an external account, use them to pay friends, spend them via your Venmo Card debit card, or continue to hold them in your Venmo balance. Just like other funds in your account, these rewards will not expire.

It’s also important to point out that the Venmo Credit Card does not carry an annual fee. According to the official terms, it also doesn’t charge foreign transaction fees. On that note, the Venmo Credit Card is a Visa Signature card and is accepted wherever Visa is.

Applying for the card

In order to apply for the Venmo card, you’ll first need to open a Venmo account. Additionally, the service advises that you’ll want to be sure to update to the latest version of the app. Then, you should see a link for the Venmo Credit Card either as a banner on the homepage or as a text link in the sidebar (opened by tapping the three-line icon in the upper right).

The first step in applying is choosing one of the five current card designs (more on those in a moment). After that, you’ll need to enter some basic information such as your name, email address, and mailing address. Of course, you’ll also be required to enter your date of birth, the last four digits of your Social Security number, and your annual net income. Once approved, you’ll be able to utilize a digital version of your card until the physical version arrives in the mail.

Card design and colors

As I alluded to, the Venmo Credit Card’s unique design begins with the fact that it comes in five different color schemes. Currently, these options include:

  • Cotton Candy (pink and dark blue)
  • Night Life (black and grey)
  • Denim (two shades of blue)
  • Campfire (red and very light blue)
  • Tropical Islands (green and dark blue)

In addition to these eccentric color combos, the Venmo Credit Card also has a front design that’s literally one of a kind. Each card is emblazoned in a QR code that is not only utilized to activate the card upon receipt but can also be scanned by a friend as a means of quickly pulling up your Venmo account. Personally, my favorite part of the card design is actually the Venmo ‘V’ that appears to be part of the chip. Overall, though, it’s not my favorite look for a credit card — but it’s an admittedly fun gimmick.

Spending categories

Since the Venmo Credit Card’s reward multipliers apply to your most-used spending categories, it’s important to review how Venmo breaks down common purchases. At this time, there are eight main classifications that are eligible to be your 3% and 2% cashback rewards categories. Of course, not every purchase you make will fit into one of these boxes, so transactions that fall outside of these categories will earn regular the 1% cashback.

Here are the eight applicable categories along with a few examples for each:

  • Dining & Nightlife (restaurants, take-out, delivery, bars, and more)
  • Travel (airlines, hotels, motels, resorts, and more)
  • Bills & Utilities (Telecommunications, Internet service providers, TV service, streaming services, electric or gas power, and more)
  • Health & Beauty (drug stores, pharmacies, cosmetic stores, sports and recreation facilities, and more)
  • Grocery (supermarkets, convenience stores, bakeries, delicatessens, wholesale clubs, and more)
  • Gas (gas stations)
  • Transportation (rental cars, taxis, rideshare, bus lines, passenger railways, tolls, parking meters, parking garage fees, and more)
  • Entertainment (movie theaters, concerts, video rentals, bookstores, amusement parks, music stores, toy and hobby stores, and more)

Because some of these categories can be a bit vague, I’d recommend looking at Synchrony’s site for more details on what will and will not qualify. However, keep in mind that these rewards categories will be dictated by the merchant category code (MCC). In other words, if a certain MCC is wrong, it may impact your earnings — and there’s little to nothing Venmo will be able to do about it. Therefore, it may be worth checking to see which category a purchase falls in before building your rewards plan.

Sign-Up Bonus

Now for the bad news: currently, there is no sign-up bonus associated with the Venmo Credit Card. Instead, customers will simply begin earning the standard rewards after receiving and activating their card. Of course, this is subject to change in the future, so stay tuned.

Will I Be Applying for the Venmo Credit Card?

Here’s the thing: while I think the Venmo Credit Card interesting and that the 3% category could potentially be used to plug a hole in my current strategy, I’m not 100% sure what that would be. Off the top of my head, the Bills & Utilities category could be useful, but this still might not amount to as much spending as one might assume. Similarly, the generic Travel category could serve as a nice back-up to the more limited Amex Platinum multipliers, yet that also remains to be seen (especially at this time). Therefore, while I’m a bit tempted to give it a shot, I’m not convinced that I’d get a whole lot of value from it at this time.

To that point, a big benefit of opening new cards is earning sign-up bonuses. Sadly, at this time, the Venmo Credit Card doesn’t offer one. Thus, I also don’t really have a reason to rush in an application.

Hopefully, just as the Apple Card — which also doesn’t usually offer an intro bonus — has occasionally unveiled special offers for new customers, the Venmo Credit Card will do the same in time. Until that happens, I’ll also be sure to keep closer tabs on my spending and see if any of these categories are worth targetting (the fact that Grocery does include wholesale clubs does interest me as a Sam’s Club member, for example). Otherwise, even though I admire the effort, I’ll be skipping the Venmo Credit Card for now.

Final Thoughts on the Venmo Credit Card

The Venmo Credit Card has a lot going for it. First, while they may not be the first to introduce the concept of adaptive spending category rewards, it’s employed well here. In fact, I’d say that some of the categories are quite broad and, in turn, pretty generous. Second, with no annual fee and foreign transaction fees, it’s also a low-maintenance card to add to your wallet. Similarly, with rewards going directly to your Venmo account, the cashback is extremely easy to tap and use as you see fit. For all of those reasons, I think that the Venmo Credit Card could be a solid option for those just getting into the world of credit card rewards.

In terms of downsides, the most obvious one is the lack of a sign-up bonus. Elsewhere, while waived for the first year, some cardholders are sure to be disappointed by the $10,000 per year spending cap put on the 3% and 2% categories. That might sound pretty high until you realize that it amounts to just $833 per month in spending between your top two spending categories each month. Because of this, it might behoove those in more advanced stages of credit card strategy to strictly use the card for a single category in hopes of maxing out that 3%.

Overall, despite those flaws, I’m definitely intrigued by the Venmo Credit Card and look forward to seeing it (hopefully) evolve. Meanwhile, if it’s sounds good to you, you can visit the Venmo app to apply.


Also published on Medium.

Author

Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and has recently starting publsihing his own personal finance blog at https://moneyat30.com/

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