SoFi Credit Card Review: 2% Cash Back With Caveats
SoFi is best known for its well-regarded personal loans. But it's since expanded its financial footprint to include credit cards.
The SoFi Credit Card is a cash back rewards card that's designed to help you reach your financial goals.
You can earn unlimited 2% cash back when you redeem it to save, invest or pay down debt. That's a big shift from the typical cash back redemption options.
This card is also low on fees -- notably, there are no annual fees or foreign transaction fees.
The SoFi Credit Card could make sense if you're already a SoFi customer.
In this SoFi Credit Card review, we'll explore the card's features and benefits in more detail and compare to similar credit card options available on the market.
SoFi Credit Card Pros & Cons
Earn Cash Back Toward Your Financial Goals
If your money goals include saving, investing or getting rid of debt, the SoFi Credit Card's rewards program could be a good fit.
With this card, you earn unlimited 1% cash back on purchases. But you can boost that to 2% cash back when you:
- Redeem rewards for a deposit into a SoFi savings account (with SoFi Money)
- Redeem rewards into your SoFi investment account
- Redeem cash back as payment toward an eligible SoFi loan (including student loans)
If you haven't noticed:
You'll need to be a SoFi member to get the most benefit from this card.
The value of your cash back rewards
With a SoFi Money Account, a SoFi Invest account or an eligible SoFi loan, the cash back rewards has its maximum value.
Rewards are unlimited so you can earn cash back by spending a little or a lot.
Say, for example, you charge $20,000 per year to your card. At a 1% cash back rate, you'd earn $200.
But if you redeemed all of your cash back to saving, investing or paying off debt with SoFi, you'd double rewards to $400. And if you spent $40,000 a year instead, you could get up to $800 in cash back.
This kind of cash back rewards structure could appeal to you if you'd rather not deal with tiered rewards or rotating bonus categories.
Since you can decide how to redeem rewards, you're in control of what they're worth.
If you decide not to redeem rewards for SoFi savings, investing or debt repayment, they won't go to waste.
You can redeem your rewards for any promotional offers listed in your SoFi member account dashboard.
Interest Rate Reductions with On-Time Payments
Aside from helping you save, invest and pay down debt the SoFi Credit Card offers another benefit.
When you make 12 on-time payments SoFi will lower your APR by 1%.
That's a good thing if you carry a balance from month to month. A lower APR means less money you have to pay in interest charges.
In terms of the regular variable APR, the range of rates offered by the SoFi Credit Card typical of most credit cards.
The better your credit score, the lower your APR may be.
The best way to avoid interest is to pay your balance in full each month.
But, if you're not able to do that, getting an interest rate cut for good payment behavior is a nice plus.
And of course, on-time payments to a credit card can help boost your credit score. That's important if you think you'll need to borrow money, get a cellphone in your name or rent an apartment.
Other Card Benefits
The SoFi Credit Card comes with a few other features you might appreciate.
As a cardmember, you enjoy:
- Easy account management through the SoFi app (including SoFi loans, investment accounts and savings accounts)
- Unlimited free two-day shipping with ShopRunner
- 5% cash back rewards when you use your card to make purchases at Boxed
- $10 Lyft credit when you use your card to take five rides per month
- Access to budgeting and spending tools
- Cellphone protection insurance of up to $1,000
- Mastercard ID theft protection
Compared to other cash back rewards cards, these benefits make the SoFi Credit Card more valuable. Not all cards offer cellphone protection or ShopRunner, for example.
Being able to manage all of your accounts through the SoFi mobile apps is another advantage.
You can easily view your savings balance, investment balance, credit card balance and loan balances in one place.
The SoFi Credit Card doesn't come with a lot of fees.
You won't pay an annual fee or a foreign transaction fee.
There is a fee for balance transfers but since there's no promotional APR, you might skip that option anyway.
Again, the best way to avoid interest with this card is to pay your balance in full each month.
SoFi Credit Card vs. Other Cash Back Rewards Cards
The SoFi Credit Card may be worth a look if you're a SoFi member.
The cash back program is tempting if you need help saving, investing or getting rid of debt.
But it's important to consider how the card compares to other cash back rewards options.
Citi Double Cash Card
The Citi Double Cash Card uses a simplified approach to cash back rewards.
With this card, you earn:
- 1% cash back when you make purchases
- 1% cash back as you pay for them
Cash back is unlimited. You do have to pay at least the minimum due to earn cash back each month.
This card has no annual fee. And it offers a promotional APR for balance transfers if that's something you're interested in.
In terms of redeeming cash back, you can redeem them for:
- A check
- Deposit into a linked checking or savings account
- Statement credit
You can also exchange cash back for ThankYou points, allowing even more flexibility for redeeming rewards.
Chase Freedom Unlimited Card
The Chase Freedom Unlimited Card offers unlimited 1.5% cash back on all purchases.
You can also earn:
- 5% cash back on travel purchased through Chase Ultimate Rewards
- 3% on dining at restaurants, including takeout and eligible delivery services
- 3% back on drugstore purchases
You might consider this card if you want to earn cash back instead of points or miles on travel purchases.
This card comes with a decent introductory bonus offer, something the SoFi Credit Card lacks. There's no annual fee and no foreign transaction fees.
When you're ready to redeem rewards, you can do so for travel, gift cards, cash back or statement credit.
Capital One Quicksilver Cash Rewards Card
The Capital One Quicksilver Cash Rewards Card offers unlimited 1.5% cash back on every purchase, every day.
That's good if you want to keep credit card rewards simple. There's no annual fee and you can earn an introductory cash back bonus.
You can redeem rewards for:
- Shopping at Amazon
- PayPal transactions
- Capital One Experiences
- Statement credit
- Cash back
- Gift cards
You also get the benefit of no foreign transaction fees and a low introductory APR on purchases.
Final Verdict: Should You Apply for the SoFi Credit Card?
The SoFi Credit Card may be a worthwhile card option if you already have accounts with SoFi.
How valuable this card turns out to be depends on the amount of rewards you earn and how you use them.
If you're adding them to a SoFi savings or investment account or paying down debt, then you'll get more mileage out of the card.
On the other hand, you may prefer a card that leaves you more wiggle room for earning or redeeming rewards. Other cash back credit cards could put more money back in your pocket. And you'd have more ways to use those rewards later.
Basically, if you're not a SoFi member and don't plan to become one, you likely won't have much use for this card. But if you have accounts with SoFi already, consider where the SoFi Credit Card might fit in your financial plan.