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Robinhood's Stock Jumps 7% After It Launches Its First Credit Card

March 27, 2024
minute read

Robinhood Markets Inc. saw a 3% increase in its stock value on Wednesday following the introduction of its inaugural credit card, signaling the company's strategic expansion beyond its core role as a trading platform.

The newly unveiled Robinhood Gold Card targets Robinhood Gold members, a subscription-based service offering premium features for a fee. Notably, the card boasts no annual or transaction fees, yet offers a generous 3% cash back on all purchases across various categories, as outlined in a statement released by the company late Tuesday.

During a live-streamed event, Robinhood Co-Founder and Chief Executive Vlad Tenev introduced the Robinhood Gold Card, emphasizing its intention to democratize financial opportunities. Tenev remarked on the historically exclusive benefits enjoyed by the affluent, stating that the new card represents a step towards providing broader access to the financial system for all individuals.

In addition to the cash back feature, cardholders can enjoy a 5% cash back when utilizing the company's newly launched travel portal. The accumulated reward points offer flexibility, allowing redemption for various purposes including travel bookings, gift cards, and shopping at select retailers such as Apple, Nike, and Bloomingdale's, among others.

Furthermore, points can be converted into cash, which can then be transferred to the brokerage account for investment purposes.

This strategic move follows Robinhood's acquisition of San Francisco-based platform X1 for $95 million in an all-cash transaction last June. X1 offers a similarly fee-free stainless steel credit card with no annual or transaction fees, aligning with Robinhood's commitment to providing accessible financial solutions.

Despite fluctuations in the broader market, Robinhood's stock has demonstrated impressive growth, surging by 124% over the past 12 months. This substantial increase significantly outpaces the performance of the S&P 500 index, which recorded a 31% gain during the same period.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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