Challenger bank Monzo has launched its new Aura credit card, which features an option for customers to automatically invest any cashback they earn. This is the first credit card in the UK to offer such a feature, according to Monzo.
The Aura card provides 1% cashback on food shopping and 0.5% on all other spending, with no limit on the amount that can be earned. Customers can choose to invest this cashback into a selection of exchange-traded funds (ETFs), including the FTSE 100, S&P 500, and Nasdaq, as well as exchange-traded commodities (ETCs) like gold and silver. Fund management fees are paid to BlackRock and are deducted from the investment value.
The card has a monthly fee of £15, equating to £180 annually. Its representative APR is 64.2% (variable), largely due to this fee, while the purchase rate is 29% per year (variable) if the balance is not paid in full each month. Existing Monzo current account holders aged 18 or over can open the card, which is being rolled out gradually.
Luke Enock, general manager of borrowing at Monzo, stated that the Aura card aims to provide both immediate benefits and long-term financial progress, combining fee-free auto-investing with cashback.