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New Zerocard aimed at millennials: Is it worth it?

Innovative structure combines credit and debit features with cash rewards


The Zerocard will offer rewards and debit card tools that could help you avoid overspending. Is it the right card for you? Here’s what you need to know.

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Dear Cashing In,

I just heard about a new rewards credit card that sounds like a mix between a credit card and a debit card. It is called a “Zero” card, but I don’t understand how it works. Should I get it? – Sheri

Dear Sheri,

One of the bigger trends in reward cards in recent years has been a move toward the introduction of cards aimed at the younger generation.

That doesn’t mean that non-millennials have to avoid these kinds of cards, but rather that financial companies are putting in a lot of new features designed to take advantage of trends in technology and consumer behavior.

Check out all the answers from our credit card experts.

Ask Tony a question.

See related: Starbucks, SoFi, retailers roll out credit products aimed at millennials

A slew of millennial-oriented cards

We’ve seen a co-branded card from Uber that gives extra rewards for dining out and for using video- and music-streaming services and online shopping. We’ve seen a new Apple credit card, set to debut in summer 2019, which integrates with Apple smartphones and Apple Pay.

And now, we’re about to see the launch of a new product called Zerocard that takes the best features from credit and debit cards and integrates them with your phone.

“Make deposits and your balance in the Zero app goes up, spend on your Zerocard and your balance goes down,” the company explains on its website. “Purchases are reflected right away and our unique features help you avoid spending more than your balance.”

TechCrunch reported in May 2019 that Zero has raised $35 million and is about to take the card out of beta testing and make it available to the public. It is rolling the card out gradually, and consumers can sign up on the company’s website.

See related: Best cash back cards of 2019

Zerocard: What you need to know

Here’s how the Zerocard works:

  • Zerocard is a credit card – a World Mastercard. It will be processed on payment networks as a credit card. That’s important, because credit cards can offer higher rewards than debit cards, since merchants pay higher fees for credit cards. Those fees fund rewards. Congress capped debit-card fees in 2010, which led to the elimination of most debit-card reward programs.
  • Charges on the card earn between 1 percent and 3 percent cash back.
  • Unlike most cards that base that percentage on spending categories or give you one flat rate, Zero does something totally different: The amount of cash-back rises as you refer more friends to sign up for the card.
  • You start with 1 percent back. Refer one friend: 1.5 percent. Two friends: 2 percent. Four friends: 3 percent. For perspective, 3 percent flat cash back is among the highest flat cash-back rates available on any card.
  • The credit card is linked to a Zero checking account that can be accessed on your phone. To receive the full amount of cash back, you have to pay your balance on time and in full. The card and checking account work in unison on the app, so you can see how much money you have left.
  • The card has no annual fee, no foreign transaction fees, no ATM fees.
  • The 3 percent back card, called Carbon, is made of solid metal.

Is the Zerocard worth it?

Traditionalists will probably stick with existing credit cards. But if you are a fan of cash back cards, comfortable with mobile banking and worry each month about overspending, then the Zero card could make some sense.

To get what the company calls the “debit-style experience,” it does require opening a new checking account with Zero.

It should have solid appeal from younger consumers, who are more comfortable with using phones for banking and tend not to have as many credit cards as older generations.

The referral-marketing program is a nice touch that people will use to get a very high cash back rate. It also taps into the younger generation’s aversion to carrying debt.

Zero is not a card for everyone. If you prefer travel rewards or retail cards, it won’t fit the bill – the company behind the card hasn’t announced any sign-up bonus offers or extra benefits.

But it is probably toward the leading edge of changes we will continue to see in rewards credit cards, as issuers and new companies become more innovative and work to change the decades-old ways we think cards should work.

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Credit Card Rate Report Updated: June 12th, 2019
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