Venmo’s new credit card, by design, is meant to appeal to a younger demographic than a flashier card like the Chase Sapphire or American Express Gold Card. But the card’s innovations when it comes to credit-card rewards could have a lasting effect across the industry — and the perks cardholders will see in the future, experts say.
“You are maybe just out of school, getting yourself established professionally, and also getting yourself established financially,” she said. “You might not have had credit cards before. It can be really hard to qualify for that first credit card. So this becomes an option for a consumer who’s looking to build their credit history.”
Another card Venmo is competing with however is the Apple Card AAPL, -1.40%. Venmo and Apple’s credit-card offerings share many similarities beyond the fact that both are attached to tech companies. Both cards are linked to mobile apps that include budgeting tools and other features that are targeted toward financial health and integrating into people’s lives.
Venmo is not the only company to offer credit-card rewards like these. Back in July, the HMBradley Credit Card, which is issued by Hatch Bank, debuted with the same method of automatically personalizing cashback rewards. That card, however, was only available to a small audience: You needed to have a bank account with fintech startup HMBradley and a high credit score. The Venmo credit card will eventually be available to all U.S. users.
As Schulz sees it, the new strategies with cashback that Venmo and Apple are ushering in could be a game-changer in much the same way that the Chase Sapphire Reserve was years ago. And because they’re getting access to these rewards early in their financial lives, they could carry those expectations down the road. Other card issuers then would likely begin offering their own versions of personalized rewards to cater to these shoppers.
My card already beats this.