Robinhood Gold Card's Gotcha Moment?! Deferred Interest is BACK!
Hey Points Peeps! Phillip here, and I've got some troubling news about a credit card development that's got me seriously concerned: the Robinhood Gold card.
I opened my email the other day and saw they're changing their terms and conditions, and honestly, it's a bit of a "gotcha" situation.
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The Robinhood Gold Card: A Quick Refresher
The Robinhood Gold card has no annual fee, but you do have to pay $50/year for Robinhood Gold. That gives you access to margin and higher interest rates (a topic for another video!). The card itself earns 3% cash back on everything (with some exceptions, of course). I even use it at Costco!
The Email That Started It All: A Gold Card Holder Agreement Update
Three days ago, I got an email announcing a "fixed fee payovertime plan." Starting October 26th, you can put large purchases on a pay overtime plan with a "pre-disclosed monthly plan fee" of up to 2% of the purchase amount. Sounds okay, right? Wrong.
The Catch: DEFERRED INTEREST!
If you don't pay your installment in full and on time, you'll owe the full interest (I'm talking 35.9%!) on the entire balance from the beginning of the purchase!
Let's break that down:
You're on a 12-month plan, and you mess up in month 11. You're not just paying interest on that month's payment; you're paying it on the whole original purchase from month one!
This is deferred interest, a hallmark of store cards. It's a way for people to pay a ton of interest compared to what they expect, and it's DANGEROUS.
My Robinhood Gold card has a ridiculously high 35.9% interest rate. It's unsustainable. Robinhood and Coastal Community Bank are hoping you slip up and pay that crazy interest.
Robinhood Isn't Alone, But...
Pay overtime plans are trending. They're designed to compete with Klarna and Afterpay, offering that "pay-in-4" convenience. Robinhood isn't the only issuer doing this, but the deferred interest aspect feels predatory.
Let's compare to other options:
Amazon Prime Visa (Chase): Used to offer installment plans directly through Amazon, but now you choose 5% cash back or 0% interest, not both. The Chase pay overtime option displays a clear "interest savings balance," making it easy to avoid fees.
American Express: Amex has pay over time plans, including for travel portal purchases. They disclose the fees upfront and it doesn't appear to involve deferred interest.
These options make it easier to spend, but the Robinhood situation is concerning because the deferred interest makes it easy to lose track of payments and get burned.
The Takeaway: Be CAREFUL with Robinhood Gold
The Robinhood Gold card should be in my wallet all the time because of the 3% cashback. But the high interest rate keeps me away. I don't want it to be the card that carries a balance!
What do YOU think about this? Let me know in the comments!
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