Retail-investor focused Robinhood is set to offer its premium ‘Gold’ tier customers a credit card which would have no annual fee, no foreign transaction fees and offers 3% cashback, in the form of reward points, on spends

Shares of Robinhood Markets climbed on Wednesday after the financial technology company launched a credit card, as it expands its product offerings in order to reduce its reliance on market-sensitive trading revenue.

The US-based company’s shares were last up 4% in afternoon trading, having reached their highest level since December 2021 earlier during the session.

Retail-investor focused Robinhood is set to offer its premium ‘Gold’ tier customers a credit card which would have no annual fee, no foreign transaction fees and offers 3% cashback, in the form of reward points, on spends.

Tieing the credit card to Robinhood’s Gold program should be accretive to revenues because of the profitable options trading and use of margin that comes with it, according to Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors.

Robinhood was at the centre of the 2021 retail trading frenzy, driven by mom-and-dad investors who used the firm’s commission-free platform to pump money into so-called “meme stocks” during the pandemic-era lockdowns.

In February, the firm said it was aiming to expand margins while being focused on driving ‘profitable growth’ this year, after reporting a surprise quarterly profit.

It has also benefited from the increased activity of retail traders – its main client base – this year against a rally in both the capital as well as crypto markets.

The turnaround in trading activity and an increased focus on profitability have together triggered a rally in the fintech’s stock that has soared more than 50% so far this year.

Robinhood has been strategizing for a while to increase customer excitement, spur engagement, and incentivize more established individual investors, he said.