Zerocard Review

Zerocard, a credit card offered by fintech company Zero, was launched in July 2019. The card, which offers a tiered-level of cash back rewards based on spending and referrals, is aiming to recreate the way consumers interact with their credit cards. To date, Zero has raised $35 million from investors, and the company reports 215,000 sign-ups through the card’s waitlist.

Zerocard, which describes itself as a “debit-style” credit card, aims to erase the hassle and risk of overspending on credit. By linking a Zerocard to a Zero Checking account, cardholders can view both of their balances in one place. The app displays credit card purchases, deposits and withdrawals together and calculates a real-time net balance, referred to as the cardholder’s “current position.”

Read on for a full review of the card.

Earning Rewards

Zerocard has a tier-based rewards system, comprised of cashback percentages. Here’s how it works:

• Zerocard Quartz: Earns 1% cash back available to all Zerocard cardholders.
• Zerocard Graphite: 1.5% cash back unlocked with $25,000 of annual spending.
• Zerocard Magnesium: 2.0% cash back; unlocked with $50,000 of annual spending.
• Zerocard Carbon: 3% cash back unlocked with $100,000 of annual spending.

The higher rewards levels can be “unlocked” with on-time payments, referrals or spending amounts. Spending $25,000, $50,000 or $100,000 annually can qualify cardholders for Zerocard Graphite, Zerocard Magnesium, or Zerocard Carbon cash back percentage levels, respectively.

When cardholders refer one, two or four friends to become Zero customers, they become eligible for the next tier of cash back rewards. Once cardholders reach a higher level status, they keep that status for the remainder of the calendar year, and for all of the following year.

Cash back rewards can be redeemed at any time in the Zero app, but they’re forfeited if not used within three years.

Rewards Potential

Here are the rewards potential for each Zerocard rewards level based on the required annual spending for each tier (except for Quartz):

• Zerocard Quartz: For $1,000 in monthly spending, this rewards tier will generate $120 cash back annually.
• Zerocard Graphite: $375 cash back annually.
• Zerocard Magnesium: $1,000 cash back annually.
• Zerocard Carbon: $3,000 cash back annually.

There is currently no sign-up bonus offered. Zero explains why the card doesn’t offer any bonus incentives:

“Many banks fund these incentives hoping that some customers revolve a balance, ultimately paying for the rewards,” reads a statement provided to Forbes. “Rather than focus on the quick win, Zero is designed for those who don’t want to pay interest every month using our ‘debit-style’ experience.”

• Zero-lability protection: Zerocard is on the Mastercard network, so it comes with Mastercard’s Zero Liability Protection. Cardholders are not held responsible for unauthorized transactions that are promptly reported.
• No ATM fees beyond what the ATM owner might charge (Zerocard Carbon cardholders have the ATM owner’s charges refunded.)
• Zerocard is a Mastercard World Card and comes with Postmate benefits, cell phone protections and a ShopRunner membership.

See your cardholder agreement for current rates and fees.

There are other cards out there that offer more than 3% cash back on some purchases, such as the Discover it® Cash Back card. These higher earning rates generally come with a cap on spending and require some extra steps, like quarterly enrollment.  Some of the best rewards cards do come with cash back limits and annual fees (but not all of them), but nonetheless, could still be more enticing to consumers with average monthly spend amounts.

Prospective customers need to have a clear and concise understanding of their annual spending to make the most out of this card if they’re considering it for its rewards. The card doesn’t come with a ton of perks that other big-name cards offer, such as American Express’ 24/7 travel concierge services, but keep in mind that Zero is trying to be your bank and your credit card.

One thing to keep an eye on is the sustainability of a 3% cash back reward; Zero address this question on its FAQ page.

“Our economics are made possible due to a lower cost structure through reduced overhead and our mobile-centric, referral-based approach to acquiring new customers,” the website reads.

Overall, the Zerocard is a unique and still brand new product — and it will be interesting to see how it evolves with its growth.