Have you received an email or stumbled across social media marketing for the X1 Card in 2023?
But is it legit? And is it actually a good fit for your wallet?
In this article, I’ll walk you through what you need to know about this credit card to make an informed decision.
This article was updated in May 2023 and I review it every six months. Detailed notes on all updates can be found here.
X1 Card: Overview and Details
Card Issuer: Coastal Community Bank
Card Processor: Visa
Card Type: Rewards
Annual Fee: $0.00
Foreign Transaction Fee: None
Auto Rental Insurance Coverage: Yes
Cell Phone Coverage: Yes
Intro APR Period on New Purchases: None
Intro APR Period on Balance Transfers: None
Bonus Offer: None
Rewards Program Details:
Earn 2x points on every dollar you spend for your first $1,000 per month.
Earn 3x points on every dollar you spend for the next $6,500 in that month. After you reach $7,500 in monthly spending, the reward returns to 2X points for each dollar.
Earn up to 10x points on select bonuses and rewards boosts within the X1 app.
X1 Card: 5 Things To Know
I spent some time reviewing the X1 Card to see how it fits in the rewards credit card market. It was not quite compelling enough to add to my best rewards credit cards list, but it does have potential.
I also sought the advice of money expert Clark Howard in my quest for determining the legitimacy of the card’s offerings.
I settled on the five most important things you need to know before taking steps to apply for this card:
1. It’s Backed by a Bank You’ve Probably Never Heard of … Is That OK?
The first thing you might have noticed about the X1 Card is that it’s not a product of one of the big banks (Chase, Citi, etc.) that are key players in the credit card industry.
Instead, X1 is a financial technology company (Fintech) that has a partnership with an FDIC-insured bank called Coastal Community Bank.
You may be wondering if that’s a big deal. When it comes to credit card issuers, Clark says it’s totally fine.
“As a customer, it makes no difference to me if it’s a large issuer, a small issuer or someone in between,” Clark says. “It could only become a problem if you have an issue, such as disputing a charge, and they don’t have enough personnel to handle it. The only way to know is with time. That will tell you what kind of customer service experience people have.”
The card carries the Visa logo, which is good for both widespread processing and cardholder perks that we’ll discuss later in the article.
Add X1 to a growing list of non-traditional card issuers that have entered the credit card space with the goal of being a disruptor.
Some other examples: PayPal partnered with Synchrony on a Mastercard that gives at least 2% back on every purchase. SoFi has a credit card that offers a solid rewards program. And Apple has created many headlines for its partnership with Goldman Sachs on an Apple Card that now pays customers a great rate of return on attached savings accounts.
“That has been great for the marketplace,” Clark says. “I love when outside disruptors come into this space. Banking is a pretty rigid business without a lot of innovation. In this industry, the innovation always comes from the outside. That’s what the Fintech companies have been so far. They have not, for the most part, been successful and sustainable businesses, but they have been very successful in disrupting things and shaking things up in the banking business.”
2. The Rewards Multipliers Seem Great, But What About Redemption?
There’s a lot to like about the points multipliers on this card.
You’ll earn at least 2x points on every dollar that you spend with this card. And there’s an opportunity to earn more.
After you spend $1,000 in a month, your next $6,500 in spending during that period is worth 3x points. (The multiplier returns to 2x per dollar after you’ve spent $7,500 in a month.)
X1 also offers boosts of 4x, 5x and even 10x points per dollar spent when you do things like refer a friend or make purchases at select retailers highlighted within the card’s app.
Some examples at the time of this review were 3x points at Apple and 5x points at Under Armour, or a boost of 5x points for your next purchase at any restaurant.
You’ll get access to these rewards on the X1 app as soon as you earn them.
But what about redeeming those points?
I dug deeper into this rewards program and felt a little disappointed by the lack of tangible, specific ways you can ensure that you get a solid return on the points you earn.
For starters: It appears as though a cash back redemption (when available) is worth less than a penny per point, which is the typical standard for a cash back credit card.
Instead, you’re encouraged to redeem points with partner brands to get maximum value.
The baseline valuation for these redemptions, which includes options for well-known brands like Apple, Nike, Amazon and many top airlines, appears to be $.01 per point. (But be careful: The fine print says these redemptions can be worth less than that.)
This may not be a deal breaker for some, but it is more restrictive than simply claiming your rewards as cash back or statement credit.
“Any time a card’s rewards don’t directly bring cash to your wallet, it adds a layer of complexity to your life,” Clark says. “You have to look at what the current rewards structure is and decide if it really works in your life. Are these businesses that you routinely do business with? And will you get the full benefit of those rewards? If you can’t answer ‘Yes’ to those, even though the rewards seem especially generous, it’s not generous for you because it doesn’t fit into your lifestyle and where you tend to shop.”
3. The Consumer Protections With This Card Are Solid
The X1 card offers many of the desired “perks” associated with a Visa card.
- Auto rental damage liability waiver (if you rent the car with this card)
- Cell phone protection (if you pay your wireless bill with this card)
- Trip interruption reimbursement (if you book travel with the card)
- Extended warranty protection (on select purchases)
And you’ll also get zero-liability fraud protection, roadside dispatch assistance and Visa concierge service that often comes with a card backed by the Visa Signature program.
Another neat consumer protection feature with this card is its use of virtual credit card numbers.
X1 has a unique structure within its app that will generate card numbers to be used with recurring memberships, free trials and single-use purchases.
This will help protect you from unauthorized charges, as well as serve as an extra layer of card security during a data breach.
4. Beware: They’ll Charge You For Authorized Users
X1 markets this card as being “designed with the whole family in mind.”
In short, this means the X1 app is designed to allow the primary cardholder to add up to five authorized users and then do things like set spending limits, track purchases for budgeting reasons, turn off lost cards and compile earned rewards in one spot.
There is no age restriction, so they’re also selling it as a way to put a card in your child’s hands to help build credit.
But what they bury in the fine print is that they’re planning to charge you a monthly fee if you bring the whole family on board with this card:
“Adding your first adult (18+) authorized user is free. Additional adult authorized users are subject to a fee of $1.99/month or $19.99/year. Child (under 18) authorized users are subject to a fee of $3.99/month or $39.99/year.”
For a family of four, this could result in as much as $96 per year if you paid for two children as authorized users via the monthly payment plan.
5. Credit Check Language Can Be Tricky
You’ll find that X1 likes to promote that you can “see if you’re approved with no impact to your credit score.”
Be careful with this.
While that policy may keep you from getting a ding on your credit for a failed application, you should know that X1 still plans to make a hard pull on your credit once you’re approved for the card. This will have an impact on your credit score.
From the fine print:
“Accepting an X1 Card after your application is approved will result in a hard credit pull, which may impact your credit score.”
This is generally true for all credit card application approvals, so it shouldn’t be anything that scares you away if you’ve decided that this card is right for your wallet.
We just want to make sure you understand it’s still going to happen even though their marketing could lead one to assume otherwise.
Final Thoughts: Pros and Cons
Are you considering adding the X1 Card to your wallet? Let’s look at some pros and cons.
|No annual fee, no foreign transaction fees, no late fees
|No welcome bonus offered
|Intriguing rewards structure with bonus multipliers
|Rewards redemption requires use with partnered businesses for optimal valuation
|Solid consumer protections offered via Visa and virtual cards on app
|Monthly charges can apply for authorized users as part of the marketed “family” usage
This card is legitimate.
If you’re looking for a rewards credit card that avoids many of the basic fees, has a premium feel with a modern app, and rewards program that could be leveraged for valuable returns, this card could be worth a try.
However, most people looking for an everyday spender may find the simplicity of a card like the Citi Double Cash Card or Alliant Cashback Visa Signature is a more predictable way to ensure rewards land in your wallet as cash.
Do you have the X1 Card in your wallet? We’d love to hear about your experiences in the Clark.com community!