Even Card Rewards are Gambling Now - CardsFTW #209

Coverd Card Launches and Brings The Gaming to Your Everyday Purchases

Coverd Card is a gamified credit card issued by Rain (Third National) that brings the recent American obsession with chance to credit card rewards.

For the record, it’s clever, but I think it's a terrible idea.

The card is a charge card with 0% APR, and all payments are due in full after 21 days. There are no annual fees, a 1% international transaction fee, and a 2% of your balance late fee. Ironically, you are not allowed to use the card for Internet gambling, as with most Visa credit cards. The card is also secured. You must link the Coverd wallet to an external wallet on a supported blockchain (e.g., Ethereum), which will grant programmatic and contractual rights to sell your collateral if you do not repay your loan.

The Collateral will be owned by you at all times and held in your custody. Coverd will not, in any circumstance, be holding custody of your Collateral. Coverd is not a custodian or owner of your Collateral. Coverd only provides software to enable the storage of the private keys required to access your Collateral and never accesses your Collateral. You authorize us to liquidate the Collateral upon a Liquidation Event and use the amounts to satisfy your payment obligations owed to Issuer

So, how does it work? Well, there are different earnings rates by category, transaction amount, and even time, with specific “surge windows” in which you earn a boosted rate on your first qualifying purchase during the window. When I wrote this, rates ranged from 10.97x (for retail purchases at $50-200) down to 3.50x for many smaller categories. PLUS, 100x for retail transactions of more than $200 from 18-21 past and 36-39 past.

I guess it’s fun? I assume it makes people try to time purchases, get mad at slow merchant processing, and spend money unwisely.

I’ve always been interested in sweepstakes savings (e.g., some deposits get a boost via more traditional sweepstakes), but the complexity here seems mad. I might be alone: venture capital firms have posted $8MM for this, but VCs love math and founders who say things like “people don’t care about B-rate lounges.”

I think that’s factually not true. People LOVE B-rate lounges. Well, good on the team for innovation, but please don’t get this card. We need less gambling, not, as one backer was quoted: “Just as Duolingo redefined how a generation learns languages and Kalshi brought prediction markets into the mainstream, Coverd is defining an entirely new category in consumer payments.” Kalshi is bad! Make it stop.

More Cash Tags

I think Square’s secret marketing plan for Cash App is to drain me of my money, $25 at a time. Following the fairy wand, they have launched a mini card. It’s so cute! Yes, one was ordered.

Wyndham Goes Upscale

Barclaycard is on a roll! Last week, they renewed their agreement with Barnes & Noble. This week, they announced a new co-brand card suite with Wyndham Hotels. With four credit cards, the portfolio offers a high-end ($395 annual fee) card for a brand that was typically very focused on budget travel (at least in my mind). 

You can earn up to 120,000 points with $6,000 spent in the first 120 days and an additional $750 directly on Hotels by Wyndham in the first 180 days. (A note that this is the first split bonus I recall seeing.) Additionally, you earn 8x points at Wyndham and 4x points on dining, grocery, and travel. There are many other benefits. 

Also in the line-up are:

• Wyndham Rewards Earner® Business Card ($149 Annual Fee)
• Wyndham Rewards Earner® Plus Card ($95 Annual Fee)
• Wyndham Rewards Earner® Card (No Annual Fee)

According to NerdWallet, Wyndham Rewards points are worth just 0.7 cents per point, so these cards aren’t quite as rich as they seem, but there are 25 brands, including your roadside favorites like La Quinta, Travelodge, and Microtel. A total of 9,200 hotels in 95 countries give you plenty of places to spend those points.

CardsFTW

CardsFTW, released weekly on Wednesdays, offers insights and analysis on new credit and debit card industry products for consumers and providers. CardsFTW is authored and published by Matthew Goldman and the team at Totavi, a boutique consulting firm specializing in fintech product management & marketing. We bring real operational experience that varies from the earliest days of a startup to high-growth phases and public company leadership. Visit www.totavi.com to learn more.

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