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| Here's the Gist today Happy Thursday Origin Member. Almost 38% of Americans have bachelor's degrees or higher, but can you guess what the highest-earning undergraduate major is on average? A. Engineering B. Computers, Math, or Stats or C. Business Here are the topics for today: - Quick Cover — Robinhood's New Credit Card
- The Dos and Donts of Credit Card Hacks
- A Few Things Recent Grads Should Know About Money
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| Quick Cover — Robinhood's New Credit Card |
About eight months ago, Robinhood acquired X1, a fintech startup that had raised $62M on an offering suite of income-based credit cards, no fees, and a sleek user interface. The state of play on this acquisition was pretty clear — Robinhood wants to diversify their product-suite, and this gets them into the credit card game. Eight months later, the Robinhood Gold Card was reborn out of this transaction. Robinhood announced earlier this week that they'd be launching their new credit card which is only available to its gold members — but not yet, you'd have to join a waitlist. The skinny on the offering Starting at the top, a Gold subscription gets you access to 5% APY on uninvested cash held in RH's sweep accounts, larger instant deposit limits, professional research, level 2 market data, access to margin trading, and a 3% match on IRA deposits (catch: you have to leave the funds in there for 5+ years to keep that match). Onto the card itself The gold card itself offers 3% cash back on all purchases across categories, which is slightly higher than the average, and 5% cash back on travel purchases made with the card (you have to book through RH's travel portal, however). Elsewhere in the travel category, the card comes with trip interruption reimbursement, collision damage waiver insurance for auto rentals, extended warranty protection, return protection, roadside dispatch, travel and emergency assistance, Visa Signature concierge service and purchase security. (Make sure to read the fine print on benefits like this before assuming you're covered.) The card itself will be issues by Coastal Community Bank, and will be managed in an app separate from the usual Robinhood platform. Cardholders will also get virtual cards, up to 5 authorized users, it'll make it easier to cancel subscriptions, and all the usual bells and whistles you'd expect from a platform that's known for its user interface and navigability. All of that for no fee? Technically, the card doesn't have an annual fee — but it still does, it's $60, because Robinhood's gold tier membership is $5 per month. Is it a good deal? An objective analysis shows the card itself offering a slightly above average cash back across categories, alongside added insurance features that are usually associated with higher annual fee alternatives. Elsewhere, we can reasonably expect the user experience to be top-notch, and the customization tools to be useful. Whether or not it's worthwhile is up to you, your credit situation, and what you want out of a credit card or even your brokerage, since it's an all-in-one deal. |
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| The Dos and Dont's of Credit Card Hacks |
Credit cards are a double-edged sword — they can serve as either a positive boost or a negative hit to your finances depending on how they're handled. Mismanagement can be detrimental, but with the right discernment and planning, they're a great asset to have in your arsenal. There are also quite a lot of credit card 'hacks' out there, often presented as a way to save money or use credit responsibly. While some of these tips and tricks might be valuable, others…not so much. Here's your comprehensive guide on CC hacks — the dos and donts. Don't — buy things and return them for the cashback: This is a credit card hack that's simply a myth. If cardholders use their card to purchase large amounts of items just to reap the benefits of earning cashback on them, your credit card will simply deduct those earned points once the return credits hit your account. Don't — use sign-up bonuses recklessly: 'Churning' is a popular thing to do amongst the savviest of CC users, but abusing it can backfire. Many credit card companies are out to detect parasitic abuse of their bonus offerings, meaning if you sign up, spend and claim your bonus, and then close the account, the issuer may decide to close any other accounts you might have with them, as well as claim you owe them the bonus back. Don't — use a balance transfer to delay repayment: Balance transfers can be a valuable asset to help you avoid excessive interest fees, but they're not meant to keep you in debt forever. If you take advantage of a BT offer from a different card, even if it has a 0% intro APR, make sure you still maintain a plan to pay that off. Do — open a new card with a great sign-up bonus that suits your needs if you have good credit. Sign-up bonuses are a great way to save money on expenses you were already planning to incur. If your credit profile is good (sometimes opening a new, young account can hurt those with less history), then opening a new card with a sign-up bonus that you plan to keep can be a very valuable hack. Do — make a balance transfer to save on interest: As we covered above, don't conduct a balance transfer and then do nothing. Make the switch only if the transfer fee is much less than the interest you'd incur by leaving the balance on the current card, and then continue making regular payments on it until it's gone. Do — rotate your spending to cards that reward it: Just like us, different cards have different skillsets and roles — one might offer 3% cash back at gas stations but just 1% on groceries, whereas another might be offering 5% cash back at your favorite grocery store this month, and 1% on gas. In this case, it makes sense to use card 1 for your fuel and card two for your groceries. |
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| A Few Things Recent Grads Should Know About Money |
In the U.S., the average student who graduates with a bachelor's degree will go on to make roughly $58,862, and obviously this varies widely depending on the profession you start out in. But no matter your salary, the truth is this — it's not about how much you make, but what you do with it that matters. Unfortunately, that's easier said than done, and many graduates will miss the mark with their money. We want you to avoid that at all costs. Top 3 things to know about money — graduates edition Invest and save ASAP: It's not just interest that compounds, it's your habits too. Starting habits of investing and saving as early as possible will be a life safer down the road when those become automatic, and the power of compounding interest on those habits will thank you too. Starting small might be defeating at first, but it adds up — even saving $25 per week equates to $1,300 by year's end. Upgrade your life, slowly: Once you graduate and secure your first full-time role, it can be easy to fall prey to lifestyle creep — a situation where just because you're making more, you're spending more too. This is a great way to rob yourself of your chances to get ahead by spending responsibly in your younger years. Be apprehensive of debt: Generation Z (the age cohort of current graduates) has been racking up debt faster than any other age cohort during these expensive times with an average balance of over $34,133 by last year. If it isn't monitored closely, debt can easily snowball and wreck your finances for years to come. When it comes to debt, have a strategy, a plan, and a purpose for it, never taking on more than you can reasonably pay off or debt that doesn't benefit your net worth (like a home). |
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| By the way 👷 Answer: It's A., Engineers coming in with a median income of $111,600 (TheHill) 💬 Check out our latest #WealthBuildingWednesday post on Instagram (IG) 💳 Robinhood throws its hat into the credit card ring with new RH Gold card (Axios) 👻 Add "ghost jobs" to the list of things job seekers have to worry about (CNBC) ✈️ Boeing's CEO is stepping down at the end of 2024 amidst controversy (The Verge) |
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