New Venmo credit card: 3% back in a single category

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Update: As noted by commenters below, the 3% and 2% categories actually are capped at just $10K spend per year. That makes this card a non-starter for most folks.

Venmo is launching a new credit card that offers no welcome bonus and is currently only available to some users, but it does offer 3% cash back on the category in which you spend the most out of a few potentially useful options.

Key Info & Quick Thoughts

The Venmo credit card has no annual fee and offers a “3-2-1” earning structure: 3% on the category in which you spend the most each month, 2% back on the category in which you spend the second-most, and 1% back on everything else with no caps noted. Here are the eligible categories:

  • Grocery
  • Bills & Utilities
  • Health & Beauty
  • Gas
  • Entertainment
  • Dining & Nightlife
  • Transportation
  • Travel

One percent and two percent are of no interest since you can easily get a card with no annual fee that offers 2% back everywhere (and in the case of the Citi Double Cash, you could also have the option of 2 airline miles per dollar spent).

The real draw here is getting a potentially uncapped 3% back in the category in which you spend the most money (Update: The 3% and 2% categories are cumulatively capped at $10K spend per cardmember year). There are other fee-free cards offering at least that much back on at least some travel (and potentially transportation) and dining and many rewards cards that bonus gas and grocery (though uncapped 3% back with no annual fee may still be interesting to some). The categories I find potentially most interesting are Bills & Utilities and Health & Beauty. We don’t see many cards that bonus “Bills & Utilities” — and it isn’t immediately clear to me what would qualify as a bill. Would a student’s tuition qualify as a bill? Surely taxes are a bill? Would anything paid via Plastiq count as a bill? There could be some good uses there.

Health & Beauty would almost surely include things like gym memberships and salons, but would it include hospital bills and health insurance (or would those be “bills”)? Would a Miraval wellness getaway code as a health purchase (kidding: it would code as travel on most cards)? Would pharmacies be included here? Getting uncapped three percent back on those types of things on a card issued by a bank that you don’t probably care much about (Synchrony) might be appealing.

You could easily get an effective 3% back for the first year with a Discover IT Miles card, so the attraction here would be getting 3% back for the long haul and perhaps simplicity if you are familiar with and a fan of the Venmo platform.

Overall, I find this card not particularly exciting yet, but it may have some potential.

H/T: TPG

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