Zero

Hybrid credit/debit card with 3% cash back

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Discussion

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Kelly Kuhn-Wallace — Exec Coach & Market:Product:Growth
This product offers no benefits for most people. It is a prepaid credit card that offers 1-3% rewards -- if you reach ridiculously high yearly spend rates or are willing to refer your friends to such a product. And the product page states things that aren't true, eg: there are no regulations in the US that prevent or discourage banks and credit unions from offering rewards for debit card spend. Because this company doesn't hold its own bank charter, its rates will never be as good as what you can get directly from a bank. If you're spending 50K on a card, you should be doing it on a credit card with a killer rewards program -- not on a prepaid credit card with a limited feature set.
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Ryan Shook — Creative Director
@kkdub Hey Kelly, Zero only lets you spend money you have instead of encouraging you to borrow from a credit card company. At the same time the card offers fraud protection and builds your credit score. Also, the higher reward tiers are pretty quickly jumped with only a few referrals.
@kkdub I am one of those people who always hunt for good credit card deals and find ways to maximize rewards (Heck I even wrote an iPhone app for my personal use). Kelly is 100% right.

1. Don't like credit cards? There are many debit cards that offer cashback.
2. Want to build credit history but can't get a credit card? Get a secured credit card with a small credit limit (I started with $250).

If you don't like credit cards and don't care about rewards, there are other much better debit cards with better services (I use discover). If you want rewards, all you really need is 3 credit cards and you can get 3% cashback on MOST of your transactions without any minimum spending amounts.
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Ryan Shook — Creative Director
@a_patil You're right, Zero is not for everyone. If you already have a good handle on your credit accounts and rewards across your cards then you don't need Zero. But if you want a dead simple way to reign in your spending while simplifying your rewards the it's the perfect fit. I currently use the Citi Double Cash card for my everyday purchases but will be switching over to Zero card to maximize cash back and minimize overspend.
Maia Bittner — Co-founder
@kkdub "If you're spending 50K on a card, you should be doing it on a credit card with a killer rewards program" -- it's true, you should be, but many don't want to. I have a lot of friends who only use debit cards because they don't want to deal with the hassle of redeeming points or dealing with rewards programs. This card is perfect for them since it auto-applies the rewards as statement credit. Some people are optimizing for the least amount of thought and work, and this is the best deal for them.
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Bryce Galen — Founder & CEO at Zero
@kkdub Thanks for looking into the details, however, there are several issues with your conclusions. Zero was designed to be highly beneficial for everyone. We believe that rewarding people for spreading the word about a product they love is a great way to appreciate customers and keep an incredible cash back rate of 3.0% easily in reach for everyone. Zero is not a prepaid credit card, and there are regulations that discourage banks from offering rewards debit cards, namely, the Durbin amendment to the Dodd-Frank Act. The entity that holds the bank charter for Zero has no bearing on customer economics or functionality. Your statement that people should be spending on a credit card with a killer rewards program is absolutely true... as long as they're not flirting with long term debt. We believe that Zero is by far the best example of such a card and we encourage you to become a customer and try it out for yourself!
Kelly Kuhn-Wallace — Exec Coach & Market:Product:Growth
Agree that Zero limits spend, offers fraud protection, and builds credit score. Concerning that as far as I can tell, the reward "tier" has to be re-earned each year. And right now the only way to do that after year one is by spend.
Kelly Kuhn-Wallace — Exec Coach & Market:Product:Growth
@bryce_galen Durbin does not specifically discourage banks from offering rewards debit cards. The Durbin amendment limits how much a bank earns on debit card transactions, which in turn makes debit card product lines have tighter margins than, say, a credit card product. But Durbin does not link points, rewards, prizes, or anything else with debit cards. (I made an assumption about Zero's relationship with Santander -- my apologies. Can you comment about how this product performed in the European market and why it is no longer available?)
Dominic Esposito — Head of Product, Startup
They've hit a market profoundly with this hybrid card. It's exactly what millennials and rising college students will be looking for (and don't know it yet). A card that is transparent, rewarding, and doesn't even make debt possible. I would recommend sharing to get the benefits as once this card goes out of beta, it will be hard to hit that 3% mark. If you want to jump the line use https://zerofinancial.com/ZERO1372.
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