- Challenger bank Greenlight launched a credit card, the Family Cash Card.
- The card offers up to 3% cash back and allows users to automatically invest the rewards into a mutual funds or ETFs.
- This is Greenlight’s first credit card and first product marketed to parents.
Family-focused fintech Greenlight revealed plans this week to launch a credit card called the Family Cash Card. This is the Georgia-based company’s first credit card as well as its first card marketed at parents.
Launching in partnership with Mastercard and issued by First National Bank of Omaha, the credit card offers up to 3% cash back when users spend more than $4,000 per month. While parents can opt to have the rewards deposited into their bank account, they can also automatically invest their rewards into a set of recommended mutual funds and ETFs. If they want more options, users can invest the rewards via the Greenlight app.
“Families today have an increasing amount of expenses, making it difficult for many to save for the long-term,” said Greenlight Co-founder and CEO Tim Sheehan. “At Greenlight, we’re focused on helping families build healthy financial futures. With the new Family Cash Card, parents can get the most out of everyday spending and invest towards big life events like their children’s college education.”
Sheehan told TechCrunch that, while Greenlight liked the idea of the rewards accruing into a 529 plan that would help parents pay for their childrens’ education, the company decided that more users would appreciate traditional investment vehicles. “We looked at the 529, and we just decided, after talking to really a lot of parents, that they basically valued flexibility over the small tax benefit of the 529. Essentially, they said, I would rather have the flexibility and not be penalized to use the money for anything my family needs,” said Sheehan.
Founded in 2014, Greenlight offers a money management platform for families that helps five million parents and kids gain skills to manage their earnings, savings, spending, giving, and learn to invest via a debit card, companion app, and educational resources. Last April, the company raised $260 million in a round that valued the company at $2.3 billion.