Just one example, of many, that shows this author doesn’t know what they’re talking about. At all.
On the 3% Cash back CC, they talk about how they will lose money, and they absolutely won't.
The APR on balances > 30 days will almost certainly be in the high 20's like every other credit card. Banks don't look at the interchange fees fed to them separate from the rest of the CC business. 3% is easy to pay when most people hold balances on their CC's and they are charging 20+% and getting 2+% on interchange fees from Visa/MC/etc.
Probably though Robinhood isn't handling the CC themselves, and has contracted it out to some bank to handle for them, as banks are very good at that sort of thing and brokerages generally are not. Other than Schwab, which owns a bank, I'm not aware of any brokerage CC that isn't contracted out. Fidelity famously uses Elan.
The author of the post clearly doesn't understand how modern finance works.
Yes, APR is going to be 20%+ and even 30%+, but not all cardholders will revolve. Some, if not many, will be transactors and won't pay any interest at all. There is also cost of funds and losses. There is a reason why there is no other 3% cash back card on the market. The most popular set-and-forget card out there is 2% cash back.
https://techcrunch.com/2023/06/22/robinhood-acquires-credit-...
I mean it can easily just be a ponzi, but Robinhood is in the business of selling data, Citadel being their top client
Having spending data to sell is a natural diversification or expansion, as Payment for Order Flow may get regulated away
but even without that, many banks do the expensive thing for a few years and then just change the terms on the account/card, they tend to keep the customers
Personally, I'm more interested in the ez creation of virtual and temp cards to use for certain subscriptions than anything else.
