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<https://robinhood.com/creditcard/> Currently wait...
# credit
n
https://robinhood.com/creditcard/ Currently waitlisted. 3% cashback everywhere. No cap currently specified. Requires $60 Robinhood gold subscription (or s/t like that). Thoughts?
If you're going to join the waitlist and don't mind using my referral link: https://robinhood.com/creditcard?referral_code=3b06e54b
I'm not a Robinhood gold member (or any member lol), but if the card is what it claims it will be, it's worth $60/year in my books
Oops, just saw @swift-vegetable-15776's post on #general on this
😂 2
m
It’s hard to see how this will be sustainable for them but it looks like a great offer
👍 1
They will be losing money on almost every transaction so will have to make it up on interest and long term play
💯 1
s
@nutritious-raincoat-28876 I posted in #general bc Gold also gives you a 5% APY savings account and a 3% match on IRA contributions
m
seriously how does this make any sense for them?
n
I assume this is a loss leader to get people on the Gold investment platform or whatever it's called. Glad no one else sees a flaw. I'm all in for now.
👆 1
Gold is only $50/yr if paid annually
s
The 3% IRA match is very tempting, they're giving it for 401k rollovers and IRA transfers as well
n
Wow, you're right. Are Roth IRA transfers included? Meanwhile I'm trying to get my account reactivated. They deactivated from lack of use. Guess I should open one for my wife in case I decide to pull the trigger on this
s
It seems like it costs $100 to transfer out in the future though
🫠 1
c
In all likelihood this is an introductory rate that they will change in the future.
👍 1
a
what is the most convenient way to redeem the points. Are they redeemable as a statement credit?
p
It makes sense because points are a lot like gift cards. They can sit unredeemed forever. Even when the points are redeemed, they go into a brokerage account so it still stays in the Robinhood system.
I see some mentioned the IRA match above so a reminder: Employers match x% of your contributions (in my experience between 50 and close to 200) up to y% of your income (in my experience between 2 and 10). Robinhood wants you to think of their match in terms of y, but you should really be thinking of it in terms of x. Also there is a really bad vesting schedule.
s
The schedule that really matters is that you have to keep Gold for a year after receiving the match. The other vesting condition is keeping your money in the IRA for at least 5 years, which, given the point of an IRA, doesn't seem terribly restricting to me
Also, if you have a sizable amount in your IRA and/or 401k and you transfer it into the Robinhood IRA, that's eligible for the 3% match as well. That can be worth a few hundred to a few thousand dollars depending on your situation
m
The x and y point is very helpful. I definitely had it backwards.
So if that's their x, what's their y?
Easy numbers, let's say someone moves 100k IRA into Robinhood. What does the match and vesting schedule look like? What are the costs I have to pay to Robinhood?
p
Ahh the rollover thing is new. Need to think about it
s
From what I understand, in terms of vesting, you have to pay for Gold for a year after the match($50), and you have to keep your money in the Robinhood IRA for 5 years after the match. You would make 3k - $50, unless you plan on transferring your IRA out of Robinhood in 5 years in which case you have to pay another $100
p
3% over 5 years so about an extra .6% on your investment per year
s
I'm not sure I agree with amortization here. This is the only IRA match I know of, and I don't know of any extra costs associated with choosing this over any other one. If you're far enough away from retirement, then your IRA is just sitting around for those 5 years anyway
There's no opportunity cost
💯 2
m
I'm also confused as to why we would use amortization here.
p
What's confusing? You lose 100 percent of the match if you withdraw your contributions within 5 years. So it's not really yours until you left your funds there for 5 years. Since I like to think in periods of single years, I divide the match benefit by 5
m
But it's not like you are selling it anyway, so it's really all upfront and the 5 year vest doesn't matter. It's a long term account.
p
The real math would obviously be a lot more complicated. You get to invest the match right away. You don't need to wait 5 years. But my point is the actual gain is small in the scheme of things. If there are other factors against choosing Robinhood, this match gimmick shouldn't really tip the scale
m
For a free $3,000? Not sure how that's not worth it. What negatives are there?
p
It's only a free 3k if you commit to keep 100k in a platform that doesn't have the best reputation (likely for good reason)for 5 years
Compared to the large number in terms of time and your own funds the match is small in the scheme of things. As for "what is the cost": Not all brokerages are equal. There are other factors when choosing a brokerage. Keeping your funds out of your preferred brokerage may cost you.
m
Explain what you mean by not all brokerages are equal. I know that's true for buying new shares but for holding existing shares, how can two brokerages be unequal?
m
NYT asked Robinhood about the 3% sticking around: "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." That's a hard pass for me
m
Source?
That's definitely a hard pass
m
s
Wait, the card or the IRA match?
p
headline implies card
s
Interesting wrinkle to the cash back(from the article)
That 3 percent cash back must go into a company brokerage account before you can transfer it to, say, your checking account elsewhere. People may just invest the cash rather than withdrawing it.
p
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