As Interest Rates Fall, SoFi and Robinhood Cut Back on “Free Money” Benefits
Famous economist Milton Friedman once said there’s “no such thing as a free lunch.” Some fintech companies didn’t heed his warning. In recent months, firms like Robinhood and SoFi rolled out generous perks to attract new customers. Their efforts were enormously successful but also costly. Now, they’re walking back those features.
- SoFi recently cut its rewards program, removing incentives like points for signing in and contributing to SoFi Invest accounts, among other changes.
- Last week, Robinhood quietly ended its 1% match on brokerage deposits — and carved out exceptions for cashback spending categories on its new 3% cashback credit card.
Know your benefits: Fintech isn’t the only industry where popular products become victims of their own success. Only this time, high interest rates subsidized most of the losses, but demand often pushed costs too high. For example, the Bilt credit card and Uber credit card were scaled back after heavy use cost their issuers millions. And recently, major creditors like US Bank and American Express also imposed new limits on cashback categories. Changes like these are a good reminder to reevaluate your credit cards, brokerages, and bank accounts to ensure you’re getting the most value out of them.
