The X1 Credit Card: Great Value for Many

The X1 credit card is a great value for many people, offering what may be the highest rate of rewards back available.

The X1 Credit Card offers 3% back on all purchases if one spends at least $1,000 a month on the card.  Their app also offers useful “boosts” that provide 4% or 5% back on purchases in a variety of categories, such as gas or restaurants.  There is no annual fee for the X1 card.  Thus, the X1 card offers a very attractive rate for a card with no annual fee.  For many people the X1 card could be an attractive option and a definite keeper, the default, go-to credit card for years.

Are there Downsides to the X1 Card?

While the X1 card is very attractive, there are some downsides to be aware of:

1.) You cannot call customer service. You have to use the app to contact them.  What if you can’t get anywhere with the app?  This is not my favorite.  However, it is also possible that one calls an agent and can’t get anywhere either if a company has agents who are not competent, so being able to use the phone does not necessarily solve anything anyway.

2.) You cannot get paper statements.  Your credit card statements are all received in their app.  They do email you to remind you when a statement is generated, but I like paper statements.

3.) You cannot redeem the points at full value for cold, hard cash, only to cancel out transactions at selected merchants (kind of like buying a gift card for these merchants).  Now the range of options here is quite attractive—there are over 50 options, including everything from Apple to American Airlines to Airbnb to REI to Hotels.com, so for many people this kind of redemption is almost as good as cash.  But the fact that you cannot redeem your points for actual dollars at full value (although you can redeem them at a reduced rate for cash; instead of $0.01 per point value towards a merchant, while you get 70% of that for cash, so 10,000 points is $100 back at REI but only $70 in actual cash back) is a negative.  Even if you never shop at any of the merchants where you can get the full 3% back (unlikely for most people) at a 70% back rate for cash, however, 3 points per dollar becomes 2.1% back for cash, which is still superior to a flat-rate 2% cash back card.

4.) If you spend less than $1,000 a month on your X1 card you do not get 3% back, but a (still decent) 2%.

Why Does the X1 Card Operate the Way it Does?

I can understand why the X1 card does these things-the fees merchants pay to take credit cards is less than 3%, in most instances, so a card that gave you 3% of actual cash back on everything would have an extremely difficult time breaking even, let alone turning a profit.  It would be losing money every time you made a purchase.  By the combination of extremely low overhead (no paper statements; no human beings who take calls with customer support; everything in their app; deals cut with companies that allow X1 to offer point redemption at face value while they get a discounted deal; some customers spending less than $1,000 a month and so not getting 3% back) X1 appears to be able to offer customers 3% back on all their purchases so long as they spend at least $1,000 every month with the card.  In other words, they may be able to continue in the long-term as a successful business, like Chase or Citibank or American Express, instead of going bankrupt for offering people too high a rate of cash back.

For many people, the X1 credit card is a logical and reasonable choice for their default card for purchases outside of bonus categories.  Someone who spends $50,000 a year on a credit card will get $1,500 back with the X1 card instead of only $500 back if he is using a credit card that offers 1% back or only $1,000 back with a 2% back card.  With the bonus categories or “boosts” the X1 card offers, one can get even more back–4%, 5%, or more on selected categories that are often quite useful.

The X1 card is also made out of metal, not plastic.  It feels nice in your hand.  I really don’t care about how the card feels in comparison to what monetary value it offers me, but some people are into that kind of thing.

If you open an X1 card using the link here, you will also receive 4-10% back for a period of time on all purchases (a very, very attractive rate, which I will also get for a period of time if you open a card with this link).  X1 has a system where they do not do a hard pull on your credit unless they are very likely to approve you.  They tell you ahead of time before they access your credit file for this.  Their application process first gets your approval to do a soft pull that does not negatively impact your credit score in any way and tell you if you are going to be approved or not.  That is an attractive feature for those interested in the card; if you are not going to be approved, they don’t touch your credit score at all; they only do it if they are very likely to approve you.

Is This Credit Card For Me?

If you can live with the bare-bones features described above, I believe the X1 card is an attractive option that could be a financially reasonable default credit card for many people.

Click here to apply for the X1 Credit Card.

If you do not pay off your credit cards in full every month but instead pay high rates of interest, DO NOT SPEND MONEY ON CREDIT CARDS.  Read the article here on the dangers of credit cards.  Any rewards you get will be far outweighed by the horrible interest you will pay. Pay off the cards as soon as possible and stick to debit cards.  The review above is only for people who avoid paying high interest rates on credit cards, which the large majority of the time can only be done by paying them in full every month.

–TDR