Everything Wrong With The NEW X1 Credit Card

What's up guys? It's Graham here. So, okay fine, I get it. You guys have been sending me so many comments, DMs, emails, and even more comments asking me to review the Smart X1 credit card.

So, if this finally makes everyone happy, then sure, we're going to talk about it and I will give you my honest thoughts about what I think of this credit card and whether or not it's a stroke of genius that's going to change the way credit cards are built, or if it's just another overly hyped credit card that underdelivers on its promise to be the future of credit cards.

And in the event you're new to this channel, first of all, welcome! My name is Graham Stefan, and I am a self-diagnosed credit card enthusiast. Symptoms include having more than 10 credit cards, constantly signing up for new credit cards because you want the sign-up bonus for free stuff, and then spending hours creating a video like this one because you enjoy talking about credit cards so much.

Although chances are, if you made it this far in the video already, then you might be a credit card enthusiast too. And the only cure that I know of to that is to subscribe and smash the like button for the YouTube algorithm if you have not done that already, because that is the perfect remedy to enjoying credit cards as much as I do.

But seriously, let's talk about this highly anticipated X1 credit card because I have a feeling this may very well change the way the credit cards are developed and issued. But really quick, a lot of you guys have been recently commenting and saying that I need to shave. So with that said, thank you to harrys.com for sponsoring this video, but more on that later.

Alright, so let's get right into it. The X1 credit card was just recently announced, and instead of becoming just another credit card that gives you cash back and a juicy sign-up bonus, they wanted to shake things up and do things a little bit differently by taking a slightly alternative approach.

They wanted to design a smart credit card that gives a credit line based on their customers' income, not their credit score, among a whole bunch of other high-tech features we'll be covering shortly. Basically, think of this credit card trying to be the iPhone of credit, and on the surface, their specs are actually pretty decent.

In terms of the card's design, they're obviously trying to appeal to millennials here by making the card metal. I kid you not, this now seems like the new industry standard to have a metal credit card, and millennials love having metal credit cards. I think the American Express Centurion Black Card really started off this whole trend, and then it was incorporated into the Chase Sapphire Reserve, which, as we all know, was a mega huge hit.

Well, that became so popular that American Express started doing it with their Gold and Platinum cards, and now everyone has a metal credit card. That's almost entirely due to the fact that millennials and most people think having metal credit cards is cool, because it is kind of cool. Who am I kidding? It's actually pretty cool.

Now, if you're wondering how much this weighs, because having a heavy credit card is very important, it's going to weigh 17 grams of pure stainless steel. And there's even a feature on the website where you could hear what the card sounds like when you drop it on the table to pay for your overpriced avocado toast and organic, fat-free, gluten-free, farm-raised iced coffee from Starbucks for seven dollars.

I'm not going to leave you in suspense any longer; here's what the card sounds like—some good old-fashioned credit card ASMR. Now, they also promise you auto-expiring virtual cards, allowing you to cancel payments with one click, spend anonymously without disclosing your personal information, create virtual cards for one-time use, get instant notifications on refunds, and attach receipts to purchases.

Plus, they've got this weird atom-like orb just representing that they're doing something different. But let's talk about the approval process before talking about all the rewards, because after all, you need to get the card first.

So here's what you need to know. First, they're trying to challenge the status quo by giving you a credit limit based on your income and not your credit score. See, typically, most credit cards calculate your credit score compared to how much money you make, and then they run you through an algorithm to determine how much money they'll extend to you.

But X1 sees that as an outdated business model, and they want to change that. Now, that's not to say this card will not run your credit score, because they will run your credit score. But their thinking is that the younger demographic doesn't have much credit history to begin with anyway, so they want to place more of an emphasis on how much is this person making instead of what their credit score is when determining how much money they're going to give you.

As it is right now, most people have to go through the ranks of starting out with a secured credit card with a deposit. Then they could prove they are a responsible adult by paying off their credit card on time. After about 6 to 12 months, you could graduate to applying towards normal credit cards. But the problem here is that a large portion of the population just gets screwed here.

Those are the people who have gone their entire lives without credit. They have no credit history to begin with, and they're stuck with no other option other than getting a secured credit card and putting down a deposit, even though they might be making a lot of money.

This old method is really stupid and it seems really dumb when I even say something like this. But here's how it kind of works: they want you to first have credit to get a credit card, but the only way to get a credit card is to first have credit. It makes no sense.

So even though they will be taking your credit history into account, chances are they'll be placing more emphasis on how much money you make instead of your prior credit history. And if that's the case, that's a really good thing. Obviously, we don't know exactly what their underwriting requirements are going to be, but it's a move in the right direction.

But now, once we go beyond this, here's a few of the things that really stood out. Although really quick, I want to thank our sponsor today, harrys.com. This is because quite a few of you lately have been telling me that I need to shave in previous videos, so I found the perfect solution.

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And with that said, let's get back into the video. Alright, so let's get right into it. They also promise you five times higher limits that will increase automatically as your income goes up, which of course, if we scroll down to the fine print, we see this is based on the average credit limit of four thousand four hundred and seventy-nine dollars granted to Gen Z, calculated by dividing their average credit limit with the average number of total credit cards.

However, I think their nuance here is in the wording: up to five times higher limits, with a very heavy emphasis on "up to." Like, here's the thing, if you're making a hundred thousand dollars a year with no credit history, chances are they're not magically going to give you a credit line of twenty thousand dollars because that's five times higher than any other credit card would give you.

Instead, this just looks like they're going to be skewing their credit limit algorithm a little bit heavier towards income than on pre-existing credit. So if you're making 50,000 dollars a year, they might just see that and give you a 2,500 dollar credit limit right off the bat, instead of the 500 dollar credit limit another credit card company would give you. But remember, the keyword here is "up to."

So, I can't imagine them going and giving 50,000 dollar credit lines to people with no credit history but who say they make a lot of money. And don't forget, they're still going to be running your credit score to determine your interest rate, which is going to range anywhere from 12.9 percent all the way up to 19.99 percent.

But that shouldn't matter anyway, because any good credit card person will tell you that you always need to pay off your bill in full by the time it's due. If anyone tells you that the interest rate on a credit card even matters, then they should not be using credit cards to begin with, plain and simple.

Now, they also say this credit card is going to help increase your credit score, and that's because if you have a higher credit limit, that decreases your overall utilization ratio, which is how much credit you have available to you versus how much credit you actually use. So they're not exactly wrong by saying this, but that only applies if this credit card gives you a higher limit than another card, and you keep your spending to a minimum and always pay off your bill in full.

Speaking of interest rates, they're also going to be offering you a two percent balance transfer fee, as they say the lowest balance transfer fee in class. But the better cards out there charge you three percent, but then give you on top of that zero percent interest for up to 15 months, like with the Citi Double Cash Card.

Then again, it's not like people are all flocking to this credit card because of a two percent balance transfer fee; they probably just threw that in there to make it slightly more appealing on the surface.

Okay, so let's now talk about the juicy stuff: rewards. They say they'll be giving you two times points on every dollar spent, and when you spend more than fifteen thousand dollars per year, they'll give you three times points on every dollar spent.

Oh, but wait, there's more! You could unlock 30 days of four times points for every friend you refer. You could also earn an unlimited amount of points, and they never expire. Now, you might be wondering how much these points are worth. After all, there are some credit cards out there that offer you tens of thousands of points, but they leave you disappointed when you realize that each point is only worth a fraction of a cent.

But these points, on the other hand, could be worth at least one cent or more. That leads me to think that maybe some of these points could actually be worth more like one and a half to two cents, depending on where they're redeemed.

But of course, as with anything, there is a catch. It looks as though you could only redeem these points at pre-approved companies, so it's not like you could go and buy a sandwich at the local place down the street and then use your points to pay off that sandwich. Now, if you can't do that, they certainly don't mention that here.

But hey, you know what? If you're shopping at any one of these companies anyway, including, uh, well, Supreme, then yeah, each of these points could be worth potentially one to two cents. And that also means you could potentially get all the way up to eight percent cash back depending on how many people you refer to the credit card, which I gotta say is really, really, really good if you happen to spend money at these companies anyway.

But come on, Supreme? Seriously? If you're shopping at Supreme, I highly doubt you're worried about getting cash back on a credit card anyway. You get all of this with a zero dollar annual fee, and that's something I can never complain about. Anytime something is zero dollars, I approve.

So overall, here's what I honestly think of it and whether or not I would recommend it. First, I gotta say the X1 credit card is actually a breath of fresh air. To be perfectly honest, I am surprised that more smart credit cards like this have not been coming onto the market.

I mean, seriously, old school credit cards should absolutely be digitalized. We don't need numbers on the back that could easily be stolen, and creating virtual credit cards for one-time use is a really good idea. It reminds me of the smart locks where you could give one-time codes that unlock the door, except with credit cards.

This is perfect for all those times that you could pay one dollar for that 30-day trial, but then you don't want to get charged for it when you forget to cancel. I'm not sure how happy the merchants would be about this, especially if they're auto billing and you just flat out change your credit card number.

But overall, features like this are good for the customer, and that's what matters. I just think the credit card companies have a long ways to go if they want to bring themselves up to date. Like, I think credit cards should really become just as much tech at this point than they should financial.

So I just think the X1 card is a move in the right direction. It seems to me almost like they took some of the broad concepts of the Apple credit card but just improved on it a little bit, added on their own features, and then remarketed it towards millennials and Gen Z, which I think is smart.

The no annual fee thing is nice; the point system is really good, but only if you use it on those specific companies. And I really don't see a lot of downsides with this credit card.

Now, I do have some hesitations and skepticisms about basing their credit limit on income instead of credit history. I could say firsthand that someone's income has no relation at all to how well they handle their money.

So I'm a little concerned that they'll be giving higher than normal credit limits to people who might not be entirely financially responsible, to the point where maybe they max out the card or, dare I say it, they default on their payments. But if that's a risk they're willing to take, that does not impact you as the customer; that's their problem, not yours.

I think instead, X1 is just betting that their audience is going to be a little bit more financially responsible, and I'm sure they're still going to have underwriting in place to make sure that nobody gets any crazy credit limits they can't afford to pay down, especially if they don't have any prior credit history.

My other criticism, though, is that as of now, it looks like the points can only be redeemed through their pre-approved merchants, which I'm just not a fan of. But I gotta say, if this gets people in the credit card game with a higher limit than they would have gotten otherwise based on their income, then I'm all for it.

I think this is a good step in the right direction to begin digitalizing credit cards. I mean, think about it—maybe you have a feature on your phone where you could restrict payments on certain credit cards while you're not using them. That right there would cut down on fraudulent purchases.

Or, have the ability to randomly generate new numbers every time you want to use your card. Or if you're really cautious, maybe you could have one of those random code generators that you have to type in every time you want to charge something.

I've got so many ideas when it comes to this, so if any credit card companies are watching this right now, send me an email. One day, I want to make or design my own credit card or be an investor in something that we could make even better than anything else out there. So if we could design something together and turn the entire credit card industry upside down for the better, just let me know. I’m game!

So anyway, overall, yes, this is a good credit card to get for you, the user. There's really no downsides besides just not being able to redeem your points exactly where you want them. But for a totally free card, especially for anyone just starting out, this one is a good one to start out with.

But as of now, you can only join their wait list and smash the like button because they're supposed to be coming out in winter of 2020. So with that said, thank you so much for watching! I really appreciate it. Make sure to destroy the subscribe button and notification bell.

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