Rocket Companies has rolled out its first credit card in order to attract potential homebuyers and existing homeowners into its ecosystem amid one of the most challenging mortgage markets in decades.
Those looking to buy a home can earn 5% back by using the Rocket Visa Signature Card for up to $8,000 that can be used toward closing costs and down payments. Homeowners who are making monthly mortgage payments to Rocket Mortgage can use their card points to receive 2% of their card spending toward their unpaid principal balance.
New cardholders who spend $3,000 in the first 90 days of being approved for the card will earn a $200 statement credit to celebrate the launch of the Rocket Visa Signature Card, the company said. The firm will also waive the $95 annual fee for cardholders who are clients serviced by Rocket Mortgage.
“After honing their budgets, we’re seeing our members take the step toward buying a home through sister company Rocket Mortgage,” Haroon Mokhtarzada, co-founder and CEO of Rocket Money, said in a statement. “Integrating the Rocket Visa Signature Card with Rocket Money gives members even more ways to take control of their money, prepare for homeownership and reach their financial goals.”
The credit card, which is integrated with Rocket Money — a personal finance app that identifies recurring expenses, notifies members about upcoming bills and cancels subscriptions — is in line with the Detroit-based company’s goal of becoming a fintech firm.
“As we move forward, you’ll probably see us talk about the full package, which can create a better experience for the consumer, but also have greater revenue opportunities for us which is different than most of our competitors, allowing us to bring more of those purchase plans on board at a higher interest rate and then giving them the Rocket Dashboard, a proposed credit card, a rewards program that keep them in our servicing funnel,” Jay Farner, Rocket’s chief executive officer, told analysts during its most recent earnings call.
Rocket has been getting creative to bring in more Rocket user accounts through Rocket Homes, Rocket Auto, Rocket Solar and Rocket Money.
In November, the firm introduced Rocket Rewards — a loyalty program that distributes points toward financial transactions across the Rocket platform for potential homebuyers. In turn, homebuyers can use points to get discounts on their closing costs in the future.
Homebuyers can combine their Rocket Rewards and Rocket Signature Card points to save money on closing costs when financing their home purchase through Rocket Mortgage.
Investment banking company Keefe, Bruyette & Woods noted the potential for Rocket’s credit card to acquire purchase borrowers, although any near-term impact is unlikely. The credit card could potentially provide Rocket with interchange—swipe fees or interest income, KBW said.
“From a longer-term perspective, this could grow the broader Rocket ecosystem, provide the company with valuable data, and reduce the cost to acquire a borrower,” according to a note from KBW.
KBW estimates Rocket’s purchase market share to be at about 3%, while the refinance market share comprises nearly 14%.
“Programs like this increase the likelihood that the company will solve this issue over time,” KBW said.
With the rise in interest rates, production plummeted for Rocket Mortgage, and it’s been ever more important for the company to reach a bigger audience beyond the mortgage industry. Rocket suffered a $197 million adjusted net income loss in the fourth quarter after it reported a $166 million loss in the third quarter.
The lender originated $19 billion in mortgages in the fourth quarter of last year, a 26% decline from the $25.6 billion in the third quarter when it lost the title as America’s largest mortgage originator.
