Venmo Credit Card Changes Its Rewards Structure With Clear Winners and Losers

The Venmo Credit Card just changed how it provides rewards for new applicants. The card used to give you 3% and 2% cash-back in your 2 highest spending categories each month, and that feature is gone.

In its place are fixed 3% categories for dining, entertainment, and Pay with Venmo purchases. There’s also an extra 1% when friends pay you back for a shared bill.

For some people, that’s a better deal. For many others, it’s a clear step back.

What’s Changed With the Venmo Card?

Before this change, the Venmo card earned 3% cash-back on your top eligible spend category each billing cycle and 2% on your second-highest. Everything else earned 1%. Venmo picked those categories for you from a list of 8: bills and utilities, dining and nightlife, entertainment, gas, grocery, health and beauty, transportation, and travel. If groceries were your biggest expense in a given month, you got 3% on them without doing anything.

Here’s what the card earns now:

• 3% cash-back on dining and nightlife, including restaurants, takeout, delivery, bars, and liquor stores
• 3% cash-back on entertainment, including movie theaters, concerts, amusement parks, digital goods, streaming subscriptions, and membership-based facilities like gyms and golf courses
• 3% cash-back with Pay with Venmo, which covers checking out with Venmo online, paying a business on Venmo, or paying someone for goods or services
• An extra 1% (4% total) on dining and entertainment when you split the purchase in the Venmo app, and your friends pay you back within 30 days
• 1% cash-back on everything else, including groceries, gas, travel, utilities, and healthcare

Cash-back is calculated daily and deposited into your Venmo account, usually within 3 business days. The card still has no annual fee and no foreign transaction fees. If you turn on crypto auto purchase, Venmo uses your cash-back to buy crypto with no crypto transaction fee.

There’s still no welcome bonus offer.

From what we’ve seen so far, existing cardholders appear to be keeping the old 3% and 2% structure, as reported by Doctor of Credit. Venmo hasn’t confirmed this publicly, though, and it could change.

Who Wins and Who Loses With These Changes?

This change helps people who often dine out, go to shows, and split costs through Venmo. Say you spend $500 a month at restaurants and bars, and your friends pay you back in the app. At 4%, you’d earn $20 a month. The old version paid at most $15, and only in months when dining was your top category.

Frequent Pay with Venmo users come out ahead, since that 3% category didn’t exist before.

Anyone whose biggest expenses fell into the other 6 categories loses. Grocery, gas, travel, transportation, bills and utilities, and health and beauty purchases all drop to 1%. Take someone who spends $800 a month on groceries. The old card likely paid 3% on that, earning $24 a month. Now it pays $8. That’s $192 less per year from 1 category alone.

Those who used the card for bonus earnings on groceries at wholesale clubs like Costco and Sam’s Club lose as well, because most of the best credit cards for groceries specifically exclude those stores from bonus earnings.

The old card worked because it adjusted to your spending. A big travel month meant 3% on travel with no effort at all. That flexibility is gone, and the new card rewards a much narrower set of habits.

Final Thoughts

The Venmo card now rewards social spending instead of your biggest expenses. If most of your money goes to restaurants, concerts, and tabs you split with friends, you could earn more with the new version. If you counted on 3% for groceries (including at wholesale clubs), gas, or travel, you’ll earn less.

If you already have the card, keep it and watch for any notice from Venmo or Synchrony about changes to your account. There’s nothing changing for existing cardholders as of now.