When Deepak Rao Founded its first launch in 2011, it puts all its business expenses on two personal credit cards, with a combined credit limit of around $ 3,000. “They were completely enlarged all the time,” he said. “To date, my credit rating has never been restored.” Even after four years of working on Twitter with a product manager’s salary, Rao still couldn’t qualify for credit cards with the types of bonuses he wanted: ones that paid for vacations or gave him points where he liked to shop.
With his second start, Rao is trying to solve this problem. The new X1 credit card is designed for people who want premium bonuses – with or without premium credit scores. It uses a new signing process that connects to the user’s bank account to set credit limits based on cash flow. The card promises up to five times higher credit limits than the average card.
The card itself is made of stainless steel – the kind of objet d’art that is advertised as pleasant noise when you play it – but is designed to be used digitally, like the Apple Card. It has a sleek application that allows users to create single-use “virtual” cards, cancel one-click subscriptions, and make anonymous transactions without issuing a real name or card number. Its points can be cashed in a list of dealers visited by the stereotypical technical bro: Peloton, Patagonia, Allbirds and Airbnb.
Maybe that’s why the X1 has become something of a Silicon Valley favorite, with more than 350,000 people waiting, the startup said. Its investors are Affirm CEO Max Levchin, Box CEO Aaron Levy and Yelp CEO Jeremy Stopelman. “I think that’s Silicon Valley’s response to American Express, which is really for the old guard at the moment,” said David Sachs, a venture capitalist and PayPal alumnus who sits aboard the X1 and uses the card himself.
Other credit card startups are trying to fill market gaps. Brex, valued at nearly $ 8 billion, has created a card that works for startups that have funding but no revenue. Carat did something similar for creators deprived of traditional funding. Both cards solved the problem of lending for a new type of business and offered bonuses specific to their needs. The X1 hopes to do the same for consumers, especially those who are mostly young, high-income and live on their phones.
The X1 will begin releasing cards on its waiting list this week after testing the card in beta for the past six months. One of the X1’s beta testers, Achilles Bhandaru, told me that he spread his spending over several credit cards to keep his credit usage low overall. Although he is a well-paid engineer at Amazon, his best credit card had a monthly limit of $ 4,500 because his credit history was so short. (He graduated from college in 2020) The X1 gives him six times more credit and better advantages than any of his other entry-level cards. For the first time, he managed to use his own credit cards to pay for flights home to see his parents.