If you are looking for an online platform that offers commission-free trading, Robinhood is your answer. The platform has many investment types listed in the US, including cryptocurrencies, ETFs, options, and stocks. All these investment types have high-yield trading margins, and the platform also offers a cash management option. The good news is that you’ll also have access to IPO (initial public offering) investments. Once you sign up for Robinhood, you’ll be issued a debit card you can use for various transactions. In this article, we will see about ‘Can You Overdraft Robinhood?’.
Can You Overdraft Robinhood?
You cannot overdraft Robinhood because the platform automatically declines any transaction beyond the amount of cash you have in your account, including your available margin credit. And if your transaction is declined, you won’t be charged any fees. Be careful, though. If you were to make payments to a third party and the transaction was declined, there could be a penalty from the third party.
How is the Robinhood debit card used?
First of all, it’s worth mentioning that Robinhood no longer accepts new customers for its cash management service. If you are already a user of this service, you can sign up and apply to be migrated to a spending account.
You can use your card at any outlet that accepts Mastercard. Use it to pay for items online or at stores, get cash, open tabs at restaurants, and even reserve hotel rooms. If you have the virtual Robinhood debit card, you can only use it online through Samsung Pay, Google Pay, or Apple Pay. You can use the card 24/7, provided your brokerage account has enough cash to cover your purchases.
As you make purchases, remember that you can’t overdraft Robinhood. So, you must keep your expenses within your available cash. If you try to purchase items beyond your margin or available cash, the platform will decline the transaction. There are some exceptions, though. For example, if you leave a tip at a restaurant and your final bill exceeds the amount Robinhood approved, you can experience an account deficit.
Also, if you’ve graduated to Robinhood Gold and your purchase is beyond the limit you are allowed to borrow, your account can have a deficit or margin call. All in all, whenever the total amount you spend exceeds the margin and cash on your debit card, the transaction will be declined.
What is the available cash and margin?
Available cash refers to the amount of cash held in your brokerage account. You are free to spend this money to buy things online or withdraw it. There’s a cash tab on the Robinhood platform where you can see the amount of cash you have. If you have Robinhood Gold, your account will include a margin, meaning your purchasing power will be backed by the money available and the margin.
To get and maintain a Robinhood Gold account, you’ll have to pay $5 every month, and you’ll be allowed up to $1,000 or more in margin credit. You can also access your funds easily and deposit large amounts. An annual interest rate of as high as 2.5% will be charged on a margin credit of over $1,000. The interest is calculated daily and charged to your account monthly. Robinhood Gold allows you to access comprehensive research reports and view all the market data that Morningstar provides.
Can the Robinhood debit card be used overseas?
Of course, You can use your Robinhood debit card globally, provided the outlet accepts Mastercard. Mastercard converts currencies automatically at the rate Mastercard selects. And the good news is that Robinhood won’t charge any transaction fees on the transactions on your debit card. However, if you are in a foreign country and want to withdraw cash in US dollars or pay for your purchase in US dollars, you’ll be charged a currency conversion fee by the ATM operator or merchant.
The Robinhood debit card is supported at 75,000 free ATMs in the US and 15,000 free ATMs internationally. Unfortunately, Robinhood debit cards are banned in some countries. So if you want to use your card abroad, first find out whether your destination country supports Robinhood debit cards. Again, if you opt for the virtual Robinhood debit card, you won’t be able to use it in a country or a place with no internet connection.
What’s the level of security on the Robinhood platform?
Robinhood hashes customer passwords using the secure BCrypt algorithm, which is the standard in the industry. In addition to that, the Robinhood mobile app has a PIN code, FaceID, or TouchID that offers secure access. A two-factor authentication system boosts these by relying on an SMS or external authenticator. If there’s any transaction on your debit card that you don’t recognize, you can contact Robinhood’s support immediately so the charge can be looked into.
Conclusion
Having a Robinhood debit card is the most convenient way to trade or purchase items online. To register and commence trading on the platform is a hassle-free experience. The profile itself is user-friendly and has many support tools. Always remember to load your brokerage account so your transactions can’t be declined.
FAQS
- Does the Robinhood debit card allow cash deposits?
No. Currently, the Robinhood debit card doesn’t allow cash deposits.
- What happens when you use your Robinhood debit card?
When you use your Robinhood debit card, the cash in your brokerage account will be used to offset your expenses.
- Can you set up your Robinhood debit card on your mobile wallet?
The Robinhood debit card supports Google Pay, Samsung Pay, and Apple Pay, meaning you can set up your card in your mobile wallet.
- Can you get cash using your Robinhood debit card?
Yes. If you have cash in your brokerage account, you can withdraw it from a supported ATM. You can also ask for cashback from participating stores.
- Does the Robinhood debit card have spending limits?
Yes. The daily streaming limit is $5,000, while the monthly limit is $15,000. Also, the daily ATM withdrawal limit is $1,010, while the monthly ATM withdrawal limit is $5,000.
