Too good to be true. Here’s how they’ll do it.

The X1 Card doesn’t yet exist except as a start-up marketing concept.  They advertise that you can earn up to 4X rewards on all spend with no annual fee.  Earning 4X requires referring others.  Earning 3X requires only $15K spend per year.  Points are worth “at least” 1 cent each.  While it’s not available yet, you can “unbox yours” by “winter 2020”.

If you detect a bit of cynicism in the above paragraph then you’re on the ball.  Well done.  We’ve been here before with a too-good-to-be-true fee-free 3% everywhere startup credit card.  Remember Zerocard which was just a few months from release in late 2016?  They finally launched the card two years later (November, 2018).  Then, in March 2020, they shut it down.

I thought I’d write about why this card will surely follow the same path as Zerocard.  That’s no fun, though, is it?  Who wants to read a cynical curmudgeon’s post?  Not me.  Instead, I decided to get creative.  Let’s look at how the X1 team will succeed…


Here’s what we know about the X1 Card from their website and from Charlie at Running With Miles (who spoke with X1’s CEO):

  • Heavy metal: 17g “Pure Stainless Steel”
  • Annual Fee: $0
  • Late Fee: $0
  • Foreign Transaction Fees: $0
  • Virtual card numbers:
    • “End free trials automatically with auto-expiring virtual cards”
    • “Cancel subscription payments in one click”
    • “Spend anonymously without disclosing your personal information”
  • Higher credit limits: Credit limits based on both current and future income (not just current income). “X1 Card offers credit limits up to 5X higher than traditional cards. Higher limits mean you can spend the same amount with lower utilization, which can boost your credit score…  Assumes an average credit limit of $4,479 granted to Generation Z, which is calculated by dividing their average total credit limit of $8,062 (source) by their average number of credit cards (1.8) (source). Actual credit limits subject to credit approval and underwriting.”


In general, the X1 earns 2 points per dollar if you spend less than $15K per year or 3 points per dollar if you spend $15K or more.  It appears that the 3X rewards will apply retroactively once you reach the $15K threshold because the website states “When you spend $15,000+ in a year, earn 3X points on every dollar spent that entire year.”  In other words, the first $15K should somehow earn 3X as well.  I can’t find any info about whether “year” is defined as calendar year, membership year, or rolling year.  My assumption is calendar year, but we’ll see.

There are two ways to earn 4X rewards:

  1. Upon startup: If you join the waiting list using a friend referral, you’ll earn “4x points on every dollar spent for the first 30 days.”
  2. Ongoing: For every friend you refer, you get 30 days of 4X earnings.  It’s unclear when the clock starts on this.  Is it immediately after your friend is approved?  Once they activate the card?  What if you are already earning 4X and another friend you referred is approved?  Does the clock on 4X automatically start at the end of the current 4X period?

What are points worth?

The X1 website makes it clear that points are worth “at least” 1 cent eachRunning With Miles, meanwhile, was told that value will go “up to 2 cents per point.” 

It appears that you can redeem points only for certain brands:

I believe that rewards will be in the form of gift cards.  Take a look at the image below from the X1 website.  The heading says “use points to pay for purchases in one click.”  And each example shows a round number.  You can pay 15K points for a $150 Apple purchase.  You can pay 20K points for a $200 Airbnb purchase.  You can pay 35K points for a $350 Delta purchase.

Based on the above image, I’ve decided (without any proof), that X1 rewards will work like this (sorted with my most confident guesses on top):

  • You can redeem points for gift cards from select merchants
  • If they offer an awards with more than a penny a point value, it will be for low value gift cards like, Spa Finder, etc.
  • Gift card values will be fixed.  You won’t be able to choose a custom value.
  • Gift card barcodes, codes, and PINs will be available immediately in-app (that’s how they can get away with saying that you can pay for purchases with one click).
  • Gift card fixed values will vary by merchant (e.g. the example suggests that you can get a $350 Delta gift card, or a $200 Airbnb gift card, or a $150 Apple gift card)
  • Redemptions start at 10,000 points ($100 gift card value)

How X1 will succeed

The credit card industry in the United States has established 2% cash back as the highest rewards a card issuer can sustain with a fee-free card.  There are exceptions, but each involves a “but”.  For example, you can earn up to 2.62% back with the fee-free Bank of America Travel Rewards card, but only if you have…

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