Venmo's lucrative cash-back card is now available to all -- 5 things to know

The ongoing pandemic has made us evaluate how we really use our credit cards.

At TPG, that includes both looking at points and miles vs. cash back strategies and considering whether you're likely traveling in the near-term or not. In fact, cash-back cards are on our radar now more than ever -- and another strong entrant recently joined the fray. Venmo launched its first-ever credit card in October 2020, and now, it's publically available to all eligible Venmo customers.

The company best known for its peer-to-peer payment platform is now expanding beyond its core product. The Venmo Credit Card offers a solid earnings structure, personalized rewards and a mobile-first platform.

Here are five things to know about the new Venmo Credit Card, a product issued by Synchrony Bank on the Visa network.

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Dynamic 3-2-1 earnings on purchases

One of the most important elements of any cash-back card is its earning structure and Venmo has a very competitive offering. However, there's a catch which I'll dive into momentarily.

You'll earn 3% back on your highest spending category each month, 2% back on your second highest spending category and 1% back on everything else.

While a 3-2-1 earning isn't particularly groundbreaking, what is very attractive is the fact that you'll earn based on your own personalized spending habits. This makes the Venmo card particularly interesting for everyday purchases that aren't typically associated with a card category bonus.

There are eight different categories where you can earn the elevated 3% and 2% back (with 1% back on everything else):

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

The most unique here are bills & utilities and health & beauty and entertainment -- none of these are particularly common categories. Additionally, the earnings flexibility is a huge asset for the Venmo card, since spending behavior fluctuates on a month-to-month basis. In fact, this could (surprisingly) make the Venmo card one of the most lucrative card for things like Disney World and other theme park tickets.

While this earning structure can be quite rewarding, it's important to note that Venmo caps the annual spending limit to $10,000 in the combined 3% and 2% categories. After spending $10,000 in these categories, you'll only earn 1% back thereafter. That $10,000 threshold is based on a cardholder's anniversary date.

Related: How to make the most of Venmo's perks

Your card is personalized

If you've used the Venmo app before, you know that each account has a dedicated QR code to simplify the process of paying an individual. You can easily open your phone's camera and scan the code to directly pay that Venmo user.

The same now goes for the Venmo Credit Card.

The card comes in five designs, with each card printed with a customer's unique QR code on the front. The QR code can be scanned via a mobile phone camera to activate the card, or in the Venmo app by friends to send a payment or split purchases.

Related: 6 ways to pay without touching anything

Do everything through the Venmo app

With the Venmo app, there's functionality to track activity in real-time organized by spending categories, split and share purchases with friends, view cash back status and make payments. These aren't unique features but the simplicity and already-familiar platform are strong selling points for Venmo.

"The card gives our customers the same unique Venmo experience they already know and love, in an intuitive, easy-to-use card and rewards program, that's all seamlessly managed and controlled from the Venmo app," said Darrell Esch, SVP & GM of Venmo, in a written statement.

No annual fee

While there are no premium card perks, there also is no annual fee on the Venmo Credit Card. The card also isn't a bad option to use abroad since there are no foreign transaction fees.

Related: Best no-annual-fee cards

All Venmo customers can now apply

When the Venmo Credit Card launched in the fall, only a select number of customers were targeted for the card who had a Venmo account for at least 30 days and who were active in the last 12 months. Now, the card is publicly available to everyone, though the only way to apply will be through the existing Venmo app.

Bottom line

While there are a handful of other cash-back cards worthy of consideration, the Venmo Credit Card is an intriguing option for those who don't want to deal with restrictive bonus categories and/or have shifting spending habits that change month to month.

It's not just the 3% back on your highest spending category (and 2% back on your second category) that makes this card attractive. For many existing Venmo customers, there is the familiarity and intuitiveness of a platform that is already readily used. Just know that you'll only earn 3% and 2% back on up to $10,000 in purchases. If you're in the market for a cash-back card, the Venmo Credit Card is worth a closer look.

Related: TPG's Venmo guide for beginners: how to make the most of small, but mighty, perks