SoFi's New Credit Card Is a Cash Back Heavyweight

But you're limited in what you can do with your rewards

By
Ben Luthi
Ben Luthi
Full Bio
Ben Luthi has been writing about credit cards and personal finance for six years and has written for U.S. News, NerdWallet, CreditCards.com and Experian, among others. Ben has developed many of Investopedia's in-depth credit card reviews and enjoys collecting and redeeming credit card miles and points in his everyday life and international travels.
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Published November 10, 2020

Big banks have long dominated the credit card rewards market, but smaller financial institutions are starting to make some inroads. The new SoFi Credit Card is the latest example, offering up to 2% cash back on every purchase you make. Unlike some other 2% rewards cards, however, you only get that rate if you use your cash back to save, invest, or pay off debt—with SoFi. 

Key Takeaways

  • SoFi has launched a new credit card, which is currently available only to existing SoFi customers. Others can join a waitlist.
  • The card offers a flat 1% cash back on every purchase, but SoFi will double that if you use your rewards to save, invest, or pay off debt.
  • It’s not the only card on the market that encourages using rewards for financial purposes, but it may be the most lucrative.

How the New SoFi Credit Card Works

Social Finance, commonly known as SoFi, started out as a student loan company, but it has aggressively expanded into other financial spaces, including personal loans, home loans, investing, insurance, business financing, and banking. 

With the new SoFi Credit Card, the company can now add credit cards to that list. 

The SoFi Credit Card offers a base rewards rate of just 1% back. However, you can bump that up to 2% back if you use your cash back rewards to save, invest, or pay off debt with SoFi. More specifically, these are the redemption methods that qualify for the double cash back rate:

  • Deposit the cash into a SoFi Money account.
  • Buy shares through a SoFi Invest account.
  • Make a payment on a SoFi student or personal loan.

The Sallie Mae Accelerate is another credit card that offers bonus rewards when you use your cash back to pay down debt. However, that only applies to student loan debt, and the bonus is just 25%, which is a far cry from the 100% bonus with SoFi. 

Is the SoFi Credit Card Worth It?

The SoFi Credit Card isn’t the only 2% cash back card on the market. Both the Citi Double Cash Card and the Fidelity Rewards Visa Signature Card offer a flat 2% back on every purchase, and the Citi Double Cash doesn’t require you to redeem your rewards in a certain way to get that rate. The SoFi Credit Card's lack of flexibility may make it less appealing than those cards for many people.

On the other hand, anyone with a propensity for squandering their cash back rewards may find that the SoFi Credit Card provides a good incentive to do something more productive with them. 

It’s also worth noting that the card offers several other benefits, such as the chance to reduce your interest rate by making on-time payments, perks with partners like Lyft, Postmates, Boxed, and ShopRunner, and no foreign transaction fee.