Greenlight Financial Technology has long provided financial education and debit cards to its child and teen customers since 2014; however, today the company launched the Greenlight Family Cash Mastercard to help those same customers build their credit before they reach adulthood.
Parents add their teens as authorized users of the Greenlight Family Cash Card, which is available with all Greenlight subscription plans, starting at $4.99 per month. Families can then earn up to 3% cash back on all purchases. The card is issued by First National Bank of Omaha.
Teens can track their credit card balances on the Greenlight app while parents can set up flexible spending limits and get real-time purchase alerts. In addition, the company’s in-app financial literacy game Level Up now includes credit lessons to aid teens as they use the card.
Tim Sheehan, co-founder and CEO at Greenlight, told TechCrunch that it’s the 3% cash back, Level Up and parental controls that separate Greenlight from credit card rivals. He especially noted the educational component so that children and teens learn credit card concepts, including paying off the credit card each month to avoid compounding interest that can lead to debt and that an excellent credit score can help them save thousands of dollars when it comes time to buy a car or house.
“There’s some card programs where you can add an authorized user, but nobody has all three of these features,” he said.
The Atlanta-based Greenlight is now working with over 6 million customers and has raised about $550 million in total venture-backed capital since its inception, Sheehan said. The most recent investment included a $260 million Series D round in 2021 that valued the company at $2.3 billion.
The credit card is the newest offering for the company, which last December introduced a free web-based financial literacy library aligned with the K-12 national standards for schools, teachers and students. Prior to that in October, it also added family safety features to its subscription plan called Greenlight Infinity, which is priced at $14.98 per month for the whole family.
Despite the growth in its customer base, Greenlight hasn’t been without challenges. In January, the company confirmed that it laid off around 21% of its employees, with Sheehan saying the decision at that time was a “preemptive move” driven by the macroeconomic environment.
“The good news is we continue to grow, and our retention rates have actually never been higher,” he said. “[To] me, the highest compliment our customers could give us is that in a difficult economy they still keep their Greenlight subscription. And now we are in a fortunate position where we don’t need to take investment right now.”
Up next, the company’s teacher’s guide combined with Level Up, called Greenlight in the Classroom, was rolled out in Georgia and will go nationwide in the fall. Sheehan is also putting some focus on expanding Level Up’s financial literacy content.