7 Things to Know About the New Venmo Credit Card

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Venmo is offering a new cash back credit card.
Image Credit: Clark.com / Venmo

Do you use Venmo to make payments or exchange funds with people?

If so, you may want to check out the new Venmo Credit Card as a way to earn cash back rewards through the popular payment app.

In October 2020, Venmo announced that it is offering a new Visa-branded credit card that will seamlessly link with your existing Venmo account. And one of the top perks is the ability to earn customized cash back rewards of up to 3% based on your spending habits.

Here’s a quick video from Venmo that gives you an overview of the concept behind merging the popular payment app with a traditional credit card:

If that’s exciting to you, read on for details that should help you decide if you should add this card to your wallet.

Here are some important items you’ll want to consider before applying for the Venmo Credit Card:


1. You Get Customized Cash Back Rewards

In perhaps the most distinctive perk for this credit card, Venmo won’t keep you guessing about spending on certain categories to maximize your cash back earnings.

You’ll automatically earn maximum benefits on the categories where you spend the most. All you have to do is spend with the card, and Venmo will automatically sort your purchases by product category.

The category in which you spend the most each month will qualify for 3% cash back. The category in which you spend the second most will garner you 2% cash back. All other categories will earn 1% cash back.

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Potential spending categories include:

  • Transportation
  • Travel
  • Groceries
  • Entertainment
  • Dining and Nightlife
  • Bills and Utilities
  • Health and Beauty
  • Gas

All of this resets each billing cycle, so you could theoretically earn 3% cash back in different categories month after month. That flexibility is nice and ensures that you’ll earn a decent reward for your spending each month, especially if it is concentrated in one particular category.

Oh, and the cash back rewards you earn are automatically credited to your connected Venmo account. So accessing those rewards should be extremely easy.


2. You Need the Venmo App and an Account to Apply

There’s really nothing old-fashioned about this credit card. Your credit application can’t even be completed on the website.

If you want this card, you’ll need to download the Venmo app from the Apple App Store or Google Play store. You’ll also need to set up a Venmo digital wallet. You’ll be prompted to do this when you download the app.

It is worth noting that the card may not be available to everyone right away.

In a news release, Venmo said it would offer the card to “select customers” starting October 5, 2020, but the app wouldn’t let me apply for the card when I tried on October 13.


3. You Can Track All Your Spending in Real Time

Having access to the Venmo app is going to unlock the full power of this credit card.

Since Venmo is already tracking your spending for cash back bonus purposes, you will have easy access to keep up with how much you’re spending in each category through the app.

Venmo allows you to track your credit card spending by category in real time.
Venmo.com

According to Venmo, you’ll be able to do all of the following with your credit card while integrated into the digital wallet app:

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  • Track activity in real-time organized by spending categories
  • Split and share purchases
  • View cash back status
  • Make payments
  • Manage the credit card
  • Receive real-time alerts to see when and where purchases are made, and when cash back is applied to your account

4. Your Card Will Have a QR Code on the Front of It

As you may have noticed in our title graphic or the featured video above, the Venmo Credit Card has some wild and colorful designs from which to choose.

You may have also noticed that each of those designs includes a QR Code. This is a total Venmo move.

Most Venmo users are used to sending money peer-to-peer for things like sharing the cost of a dinner bill or reimbursing a friend for concert tickets. This QR code on the front of your credit card will allow your friends to use their Venmo apps to scan your credit card as a payment source — right there on the spot.


5. There is No Annual Fee

If you’re worried about this card dinging you for usage on the Venmo app, you can relax— at least initially. There are no annual fees associated with the card.

Here’s a quick breakdown of the fees you could see from this card:

Fee TypeVenmo Credit Card Charge
Annual Fee$0
Foreign Transaction Fee$0
Cash Advance FeeEither $10 or 5%, whichever is greater
Late Payment FeeUp to $40
Returned Payment FeeUp to $29
Balance Transfer FeeN/A

The lack of a foreign transaction fee makes this a good card for traveling abroad.


6. The Venmo Debit Card is a Different Product

While you’re browsing the Venmo app, you may stumble across the opportunity to apply for a Venmo Debit Mastercard. This is a completely separate product.

The debit card is a free product that can be used to access your Venmo balance to pay for products at places that don’t accept Venmo. The debit card has no monthly fees or Venmo balance minimums.

It may warrant some consideration if you’re a frequent Venmo user who regularly carries a balance in lieu of cash, but that’s a topic for another day.


7. Venmo is Owned by PayPal

This is just an “FYI” for those of you who don’t know much about the peer-to-peer digital wallet.

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I mention this to help you feel comfortable that this service is coming from a major, legitimate financial technology company. While Venmo is similar in nature to PayPal, the company explains the difference between the two pretty nicely here. The credit card itself is a Visa card that is backed by Synchrony Bank.

Oh, and by the way, PayPal has a branded cash back credit card you may want to consider as well. It offers unlimited 2% cash back on all purchases.


Final Thoughts

If you are in the market for a cash back credit card, the new Venmo Credit Card could be a real contender — if you are the right type of consumer.

The customized and constantly evolving cash back rewards program is intriguing. And it may be a hint at the direction credit card companies could take rewards programs in the future.

Instead of choosing your favorite category and hoping it’s actually the one where you spend the most, Venmo is taking out all of the guesswork. That’s a good thing for consumers.

Bottom Line: This card is likely going to appeal only to existing Venmo users who already conduct most day-to-day financial transactions through the phone.

Since the Venmo app is required to apply for the card and is an integral piece to the daily usage and management of it, you should probably be comfortable with making the socially-driven digital wallet a part of your daily life before applying for the credit card.

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