SoFi Credit Card review: A good deal for SoFi customers

Fantastic features like unlimited cash back and a lower APR after 12 on-time payments may make the SoFi Credit Card seem like a top flat-rate rewards credit card with generously low interest. And while this take could ring true for some cardholders, there are several caveats that chain the card’s potential value.

The SoFi Credit Card (issued by The Bank of Missouri) will make the most sense for you if you’re already a loyal SoFi customer. That’s because the points you earn toward cash back can only be redeemed at full value for SoFi investment and money management account contributions.

This card can offer excellent rates and fees if you plan to refinance a loan or invest with SoFi, but if you want to pocket your cash back or cover purchases with statement credits, then you should probably go with another cash back credit card.

Quick highlights

• Rewards rate: Earn 3 percent cash back rewards for a year when you set up direct deposit with SoFi. After that, earn 2 percent unlimited cash back on purchases when redeemed toward investing, saving, or paying down an eligible loan with SoFi.*
• Welcome offer: Tap to play for a chance to win between $10 and $10K in SoFi Rewards Points when you apply for and are approved for the card.
• Annual fee: $0
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 14.49 percent to 26.49 percent variable (drops by 1 percent after 12 months of on-time payments)

Current welcome offer

Currently, SoFi is offering a chance to earn between $10 and $10,000 in SoFi Rewards Points when you apply for the card and are approved. After approval, you can tap the button to win 1,000, 10,000, 100,000 or 1 million SoFi Rewards Points, worth between $10 and $10,000. Be aware that the odds of winning the 1 million points is about 0.3 percent, so very slim. This welcome offer can either be disappointing compared to the best sign-up bonuses available, or very lucrative. However, you shouldn’t apply for the card solely for a 0.3 percent chance to win the highest reward. In comparison, other cards offer tens of thousands of points when you meet certain spending thresholds.

Rewards rate

Rather than direct cash back, you’ll earn SoFi Reward Points that are tied to your SoFi accounts. Your points don’t expire for the life of your account, but unlike some other rewards programs, SoFi Rewards Points can’t be transferred to loyalty programs or other members.

Strangely, any SoFi Rewards Points earned through means other than your credit card spending are taxable. This might not be a major issue for you, but it’s worth remembering that taxes could eat away a bit of your rewards value.

How you earn

Collecting rewards is easy with the flat-rate SoFi Credit Card: You’ll earn 3 percent cash back rewards for a year when you set up direct deposit with SoFi. After that, earn 2 percent unlimited cash back on purchases when redeemed toward investing, saving or paying down an eligible loan with SoFi.* Just don’t miss your minimum payment due date since you won’t earn any points on your purchases for that billing cycle if you miss the deadline.

If you’re planning to use SoFi as your main banking partner, there are also a few other ways to earn more SoFi Rewards Points after enrolling in the Member Rewards Program (although the specific rewards rates aren’t always clear). You can earn points by:

• Logging into the SoFi mobile app
• Linking your non-SoFi accounts to SoFi Relay and managing your transactions
• Signing up for the SoFi Relay Credit Score Monitoring service
• Using your SoFi Checking and Savings account to activate a SoFi Checking and Savings debit card, set up bill pay and use direct deposit with the account
• Using your SoFi Checking and Savings debit card to send money to a friend or family member for the first time

Redeeming rewards

You can redeem your credit card rewards through the “Redeem Points” page, either on a one-time basis or on a monthly auto-redemption basis. All you have to do is log into your account or open the mobile app, go to the “SoFi Points dashboard” page and click the diamond symbol on the homepage or tab. From there, you’ll have the option to see your point-earning methods through the “Earn” button or view your redemption options through the “See all the ways to redeem your points” link.

Unlike several other credit card rewards programs, SoFi Rewards Points can’t be transferred to third parties or other loyalty programs. Unfortunately, you also can’t redeem for travel or other merchandise, so your rewards are tied up with SoFi. However, you can use your points for:

• Statement credits
• Promotional offers on the “Redeem Points” page
• Cash deposits into your SoFi Checking and Savings Account (a cash management account)
• Stock Bits shares credited to your SoFi Invest Account (a stock, ETF)
• Payments to your SoFi Student Loan Refinance or SoFi Personal Loan accounts

You’ll enjoy a 1:1 rewards redemption value if you redeem to a SoFi Checking and Savings, SoFi Invest or SoFi loan account. But if you use your rewards toward statement credits, their value will be halved, with points worth just 0.5 cents apiece.

This is a bit peculiar since statement credits are one of the more popular cash back redemption options, and cash back rewards don’t usually decrease in value if used toward statement credits. Depositing your rewards as cash into a SoFi Checking and Savings account is effectively the same as direct deposit cash back into a checking or savings account, but if you want cash back that doesn’t go into a SoFi bank account, you’ll essentially only earn 1 percent back on all purchases.

Outside the reduced APR with 12 on-time payments, the SoFi Credit Card doesn’t come with any SoFi-specific perks, though there are a few perks you get once you become a SoFi member — mainly related to financial planning. However, as a SoFi Mastercard, your credit card comes bundled with a rich portfolio of Mastercard World Elite benefits.

Cellphone protection

Paying your monthly cellphone bill with your SoFi credit card will cover your phone for up to $1,000 per 12-month period if it’s damaged or stolen. Each claim is limited to $800 and you get two claims per 12 months (subject to a $50 deductible).

Mastercard World Elite perks

Since the SoFi Credit Card is a World Elite Mastercard, you’ll have access to a wealth of travel and partner benefits, including travel services and discounts.

These include a $5 Lyft credit after taking three rides in a month, a complimentary ShopRunner membership upon enrollment and discounts with services like DoorDash, Fandango and Hello Fresh. Travelers will also enjoy the savings and amenities available with the Mastercard Travel and Lifestyle Services, World Elite Mastercard Concierge Service and Mastercard Airport Concierge included with your card.

SoFi member benefits

Your SoFi Credit Card allows you to become a SoFi member, meaning you have access to their laundry list of member benefits, including:

• Financial guidance perks and more: credentialed financial planning advisor access, friend referral bonuses, member rate discounts on eligible loans and free will drafting with Ladder estate planning
• SoFi experience perks: exclusive travel and networking event access, members-only SoFi Facebook group access and SoFi Stadium entry and member lounge access
• Employment guidance perks and more: interactive career advice with exclusive tools and Get That Raise® experiences, unemployment protection program for loan payments and college financial aid comparison options

These aren’t necessarily the most valuable perks you can find with competing credit cards, but they’re certainly unique and may help if you’re a young adult or recent graduate focused on establishing the best financial foot forward.

The SoFi credit card is quite a low-cost card compared to several competing cards. There is no annual fee and no foreign transaction fees, and the ongoing APR can be relatively low at 14.49 percent to 26.49 percent variable. Plus, after 12 months of on-time payments, you can lower your interest rate by 1 percent. This brings the SoFi card’s low-end APR within striking distance of the low-end APR on the famously inexpensive Discover it® Cash Back credit card.

In determining your credit limit, SoFi considers more than your credit history and scores. It also considers your debt, annual salary and other yearly wages. At a minimum, your credit limit will be $500.

On the downside, the SoFi credit card isn’t the cheapest option if you need to do a balance transfer. There is no zero-interest intro APR period and the balance transfer fee is on the steep end — 5 percent with a $10 minimum — so if you need to pay off existing card debt, it might be smarter to choose a dedicated balance transfer credit card.

The SoFi Credit Card is one of the best new credit cards for paying off loans, but it might not be the best starter card since it requires good to excellent credit (a credit score of 670 or higher). If you have student loans, the SoFi card may be a more accessible option for graduates since you could have already built a decent credit foundation. However, the SoFi card also limits how cardholders can redeem their points. If you prefer a card that has more expanded redemption options, consider one of the cards below.

The SoFi Credit Card vs. the Chase Freedom Unlimited Credit Card

The SoFi card is a great option for any SoFi loan holders looking to earn solid rewards on their card (SoFi card points are most valuable when redeemed on SoFi products). The Chase Freedom Unlimited, on the other hand, offers a much more expanded rewards program. For example, travelers will get much more value from this card since Chase Freedom Unlimited cardholders earn an elevated 5 percent cash back on travel booked through Chase Ultimate Rewards (as well as cash back and on gift cards), 3 percent on drugstore purchases and dining (including takeout and delivery) and 1.5 percent cash back on other general purchases.

If you’re already a SoFi customer, then the card can earn 2 percent back that can be redeemed toward your loan payments and help reduce your overall debt. However, if you want more general rewards and more flexible redemption options, then the Chase Freedom Unlimited is the better card.

The SoFi credit card vs. the Citi Double Cash Card

If the SoFi card was your first choice because you’re looking to earn elevated rewards for your largest expenses, there are better card options. Those cards generally come with caveats you’ll have to watch out for. The Citi Double Cash Card, for example, offers an unlimited 2 percent cash back — 1 percent cash back when you make your purchase and the additional 1 percent when you make credit card payments.

Keep in mind that the SoFi card’s 2 percent cash back after the first year* is only worth 2 percent when you redeem rewards toward your SoFi Checking and Savings account, loan accounts or investing account. If you redeemed your SoFi card rewards for a deposit to an external account, the points’ value are halved. With the Citi Double Cash, on the other hand, your 2 percent cash back (1 percent when you make a purchase and 1 percent when you pay your bill) is always worth 2 percent. Again, if you’re already a SoFi customer, the SoFi card’s 3 percent cash back for the first year and 2 percent after that* is an alluring offer. Outside of those parameters, the SoFi Credit Card falls short of other flat-rate cash back cards like the Citi Double Cash. When comparing these two cards, the Double Cash comes ahead with its flexible redemption options and unchanging cash back value.

Best cards to pair the SoFi Credit Card with

The SoFi Credit Card is the only credit card that earns SoFi Reward Points, and there aren’t any card options that will earn you SoFi points outside of the debit card you can use with a SoFi Checking and Savings account. If you’re looking to diversify your rewards, it’s worth exploring a card that rewards your specialized spending with higher-earning bonus categories, like a travel credit card. You may then be able to link it to SoFi Relay and earn extra points.

Unless you’re planning to refinance a loan, SoFi doesn’t make a compelling case to switch over.

You’ll have to set up at least one SoFi cash management account to keep your rewards’ value and there are no intro APR periods to justify the stiff balance transfer fee.

On the other hand, if you’re already a SoFi customer paying down a loan or investing into an eligible account, then the SoFi Credit Card could be a solid option, as the cash back on all purchases you can earn toward those accounts is a valuable opportunity. That said, you’ll be better off with a more flexible cash back card if you want to use your rewards for any other purpose.

The information about the SoFi Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.