The recent success of two niche credit card startups shows how specialized rewards can be a draw for consumers – and why incumbents may want to explore affinity-oriented benefits.

Two recent funding rounds spotlight how fintechs are setting themselves apart through the unconventional use of credit card rewards: 

Treecard, which just raised $23 million, promises to plant a tree for every $50 users spend, while X1, which received $15 million in fresh funding, lets members use credit card points to buy stocks. Both promote their unique points schemes in their marketing and have boasted extensive waitlists. 

Affinity cards like these can “feed into a tribal sort of affiliation,” Bankrate analyst Ted Rossman told Insights Distilled, adding that other examples include cards for crypto investing, charity donations, sports benefits, or rent perks. “There are more ways than ever to demonstrate your loyalty with a credit card and earn related rewards and experiences,” he added.   

While big banks like Capital One, JPMorgan, and Citi have recently focused their credit card rewards on travel benefits, these funding rounds demonstrate other ways to stand out, build deeper connections, and win a share of consumer spend. Incumbents should take note and explore ways to appeal to users’ passions or offer outside-the-box benefits. “Credit cards aren’t one-size-fits-all, so for some people, these niche options may be their best option,” Rossman said.