finance news

Kid-focused fintech firm Greenlight introduces credit card for parents

Kid-focused fintech firm Greenlight introduces credit card for parents
Kid-focused fintech firm Greenlight introduces credit card for parents

Greenlight Financial Technology, a kid-centric fintech company, has reportedly launched a credit card that will give parents up to 3% cashback on all purchases. It will be allowing them the choice to invest their cash rewards in stocks and exchange-traded funds (ETFs).

Tim Sheehan, the company's CEO stated that the automatic investment feature is designed to help parents oversee their finances while also giving them the alternative to invest through Greenlight’s other investment apps. The card's main objective is to help parents save for their children's education which is reflected in the way it's being marketed.

Sheeshan added that the card ultimately serves the same function as any other credit card which is to offer cashback to users. However, its differentiator is its feature to aid parents to manage their finances automatically rather than doing it manually.

Several financial institutions, such as Charles Schwab, Bank of America, and Fidelity, offer credit cards that allow investors to automatically invest cash rewards. On the other hand, Greenlight’s focus on helping parents manage their finances and taking care of their needs helps the fintech company stand out from its competitors. 

The company considered creating a card that would allow parents to earn cashback on their education savings and would fit into a 529 plan which is a tax-advantaged savings account that allows parents to save for their children's education on their behalf.

However, after discussing this with a lot of parents, the company decided to drop the idea as many said they would rather have the flexibility to invest than a minimal benefit of 529.

In 2021, the company reported that it had recorded over USD 100 million in recurring revenue. It also crossed the 5 million mark in terms of the number of children and parents using the app. In April last year, it raised a total of USD 260 million in a funding round led by a 16z investment firm, increasing its valuation two-fold to USD 2.3 billion.

Source Credits –

https://techcrunch.com/2022/05/17/greenlight-fintech-focused-on-kids-launches-cash-back-credit-card-for-parents-education-savings/

About the author

Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.