The Venmo Card: Is it right for you?

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Since its 2009 launch, Venmo has become one of the most popular mobile payment apps in the United States. The app, which lets its users pay one another with linked credit cards, debit cards, bank accounts or account balances, began offering a Mastercard® debit card known as the “Venmo Card” in 2018.

Unlike traditional debit cards that pull from a linked bank account, the purchases you make with the Venmo Card are charged to your account balance (though you still need a linked bank account to transfer funds into said balance).

Issued by The Bancorp Bank, the Venmo Card allows you to withdraw cash from ATMs, and there’s no charge for doing so as long as you withdraw at a U.S. MoneyPass® ATM. (ATM withdrawals outside of the MoneyPass network charge $2.50.)

Venmo Rewards: What you need to know

The official rewards program for the Venmo Card, known as “Venmo Rewards,” launched in October of 2019, but the company started experimenting with cash back rewards earlier on that year.

With the help of Dosh, a third party cash back platform that manages Venmo Rewards, the Venmo Card offers instant cash back rewards for making purchases with the card at participating merchants. Whenever you make an eligible purchase, your rewards are automatically deposited into your Venmo balance.

Merchant offers can be found within the Venmo app, but there’s no way to see these offers without owning the Venmo Card (or trolling Reddit threads for information). Depending on the offer, there may be limits on the amount of cash back you can earn. In October 2019, Venmo offered 5 percent cash back for swiping the card at places like Target, Wendy’s and Sephora.

Security protections

Under the Mastercard® network, purchases made with the Venmo Card are covered by zero liability protection, meaning you won’t be held accountable for unauthorized transactions. You can report a lost or stolen card and receive an emergency replacement with Mastercard Global Service, and Mastercard ID Theft Protection™ both monitors your credit file and alerts you to suspicious activity as long as you activate. You also have the ability to disable your card within the Venmo app.

Venmo offers its own set of protections, as well. Under the Protected Purchase Program, purchases made at authorized merchants using the Venmo Card are covered in full (plus shipping costs) in certain circumstances, including if you did not receive the item or the item does not match its original description.

How the Venmo Card squares up against competitors

The Venmo Card isn’t the only debit card to earn its users rewards for their spending. The Discover Cashback Debit, for example, earns you 1 percent cash back on up to $3,000 in purchases each month.

In fact, Venmo’s competitor, Cash App (formerly Square Cash), released a Visa debit card just over a year before Venmo in May 2017. Cash App’s “Cash Card,” as it’s known, is tied to users’ balances and offers a rewards program. This past week, the Cash Card’s rewards were unofficially reported to include 10 percent cash back at Whole Foods, Burger King, Petco and more.

Both Venmo and Cash App set limits on card usage, with the Venmo Card’s limit of $3,000 per purchase set significantly lower than the Cash Card’s $7,000 limit per purchase.

Is the Venmo Card worth it?

If your main goal is to earn rewards for your purchases, a rewards credit card may better suit your needs. There are plenty of no annual fee rewards card options that provide up-front rewards information, meaning you can strategically choose a card based on how and where you spend.

Those who’re interested in the Venmo Card but travel abroad often should be sure to have alternative payment options available; the Venmo Card can’t be used outside of the United States or for online purchases with international merchants.

Even if you’re a frequent user of Venmo, the rewards potential of the Venmo Card isn’t much compared to that of a rewards credit card. Venmo is set to release a co-branded credit card with Synchrony Bank in the latter half of this year, so if you’re dead set on owning a financial product with Venmo, be on the lookout for details to come.