Credit One Bank® Platinum X5 Visa® review: Light rewards with heavy fees

The Credit One Bank® Platinum X5 Visa credit card appears to be a big step up from other Credit One cards since it offers striking 5 percent cash back rewards categories and 1 percent back on everything else. However, the card’s prequalification terms show that it carries the same finicky application process as its Credit One siblings.

Rather than applying directly for the Platinum X5 Visa card, you must submit a preapproval form that covers all Credit One Platinum cards. From there, Credit One will gauge your creditworthiness and tell you which cards you’re eligible for. This can be frustrating since it takes away some agency over a decision directly related to your finances.

The tricky terms and fees that come with the Platinum X5 Visa card may also limit your rewards in the long run. The Platinum X5 Visa may be better than other Credit One cards, and it isn’t a bad option if you want an unsecured credit card for people with average credit or above. At the same time, you may have better options. Knowing your goals ahead of time may help you find a card from another issuer that offers you better overall value while you build credit.

Quick highlights

• Rewards rate: 5 percent cash back rewards on eligible gas, grocery, mobile phone service, internet service and cable and satellite TV service purchases (up to $5,000 in purchases per year, then 1 percent); 1 percent cash back rewards on all other purchases. Terms Apply.
• Welcome offer: N/A
• Annual fee: $95
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 28.74 percent variable

Current sign-up bonus

The Credit One Platinum X5 card doesn’t offer a sign-up bonus, which is normal for Credit One cards and other cards available at this credit level.

If you have good credit (a FICO score between 670 and 739), or you’re on the cusp of good credit, you may test your luck by applying for cards with generous welcome offers or limited-time offers.

If this credit score requirement is out of reach for you, and you’re a student, consider a student card. Some student credit cards come with welcome offers for new cardholders who have fair or average credit.

Rewards rate

There is some fine print worth considering before you get too excited about the Platinum X5 Visa card’s cash back rewards rate. Earning 5 percent back in some of the most popular rewards categories is a great benefit, but you should be aware of this card’s limitations, covered in more detail below.

To start, make sure that you qualify and get approved for the Platinum X5 Visa card specifically. Credit One brands its cards very similarly, and you may actually prequalify for a completely different card with a different rewards rate. If that happens, you may be disappointed.

Earning cash back rewards

The Credit One Platinum X5 Visa card earns 1 percent cash back rewards on all purchases and a formidable 5 percent cash back rewards on eligible gas, grocery, internet service, cellphone service, cable, and satellite TV service purchases. However, your 5 percent cash back rewards rate is limited to the first $5,000 you spend across these categories each year. After you meet this spending cap, your rate reverts to 1 percent back.

While this bonus category spending limit is impressive for a card designed for those with fair credit, it falls short of the rewards spending limit found on most 5 percent rotating cash back category cards (typically $1,500 per quarter or $6,000 per year).

Meeting the card’s rewards spending limit may also be unrealistic if you start with the minimum credit limit of $500. This will give you $6,000 to spend for the year, but only $500 each billing cycle. If you don’t meet your spending cap each month, then you’re leaving cash back potential unclaimed.

Maximizing your categories’ yearly spending cap can be a challenge with these obstacles and the extra restrictions spelled out in the reward conditions. For example, the Platinum X5 Visa’s terms state that category purchases made through wholesale clubs, superstores, drugstores, bakeries/confection stores and PayPal won’t earn 5 percent cash back.

In addition, although it’s a Visa card, the prequalification terms state that eligible purchases are defined by each merchant’s “Standard Industrial Classification Code” instead of Visa’s normal merchant category codes (MCCs). That means your Platinum X5 Visa might not earn rewards at the same places your other Visa cards do.

Redeeming cash back rewards

Cash back rewards earned with Credit One cards can only be redeemed for automatic statement credits. Saving money doesn’t get much more convenient than automatic credits, but you lose the flexibility of other methods like bank account direct deposits or gift card redemptions.

This simplicity, however, is exactly the sort of element you may want to look for on a credit building card. Rewards earnings and redemptions should come second to your credit building responsibilities. Automatic redemptions remove the variable of choice, simplifying the process of receiving your cash back.

How much are cash rewards worth?

Credit One cash back rewards work like other cash back programs. You’ll net 5 cents per dollar on 5 percent category purchases and 1 cent per dollar on other purchases.

All things considered, if you can accept the fine print about which purchases count for each category, your credit limit and the annual spending limit, this card offers a great rewards rate. You’ll struggle to find a card that rewards 5 percent back in multiple categories at the same time.

It would help if you also tapered your expectations when it comes to this card’s added benefits. Paying with your card offers you basic Visa perks and more cash back rewards through a card-linked offer program. However, other perks are limited, and Credit One’s Protection Program could easily be more of a trap than a lifeline.

Credit One More Rewards and Visa Offers + Perks

The Credit One More Rewards and Visa Offers + Perks programs allow you to save money with select online shopping retailers by linking your credit card to these online portals, just like you would with Amex Offers or Shop Through Chase.

Both programs cycle participating merchant offers for a limited time, but More Rewards deals can earn up to an extra 10 percent in cash back rewards while Visa Offers + Perks mainly provides product discounts. Just be sure to read the offer limitations carefully.

If you’re unsure whether this card is right for you, don’t let these offers be the deciding factor. You can’t predict which merchants will be offered or which deals you’ll get, and Credit One reserves the right to change these offers at any time. While generous, this benefit is more of a convenience than a significant perk.

Traditional Visa benefits

All Visa credit cards carry a roster of perks based on your credit limit. The Credit One Platinum X5 Visa card qualifies as a Visa Traditional card, which will get you basic features like $0 liability on unauthorized purchases, Emergency card replacement, Emergency Cash Disbursement and 24/7 pay-per-use Roadside Dispatch.

Credit Protection Program

Credit One Platinum cards offer an optional Credit Protection Program, which insures you in the event you’re unemployed or disabled. By paying 0.96 cents per $100 of your standing balance on each monthly statement, your minimum payment will be waived for up to six months. Beneficiaries can also receive up to a $10,000 balance payoff in the event of death.

There are other drawbacks to weigh besides the monthly fee for carrying a balance. Your account will be frozen (except to accrue interest) once you activate your protection, but you’ll have to wait 30 days to see your policy take effect. Considering these setbacks and other major costs like compound interest, opting for another debt management plan might be a better idea.

If you’re looking for a low-cost starter card, you might want to pass on the Platinum X5 Visa. The 28.74 percent variable APR is well above the current average credit card interest rate. Plus, you’ll have to spend at least $1,900 per year (or $159 per month) in the card’s 5 percent cash back rewards categories just to offset the $95 annual fee, which also eats into your initial credit limit.

You may also need to pay a credit limit request fee (depending on your creditworthiness) if Credit One doesn’t offer you an automatic credit limit increase. A low starting credit limit could be especially dangerous since Credit One can cancel your account if you’re 20 percent over limit, and the card’s 3 percent ($1 minimum) foreign transaction fee, up to $39 late payment fee and up to $39 returned payment fee could easily snowball your balance given the high interest rate.

Luckily, however, the Platinum X5 Visa offers a 24-day grace period, which isn’t a given for all Credit One cards.

The Credit One Platinum Visa is a notable credit-building tool that — unlike many credit-building cards — offers cash back on purchases. The card’s interest rate is in line with the standard interest rate on cards for fair credit, but the $95 annual fee is higher than similar cards’ fees. The Credit One Platinum X5 Visa isn’t a bad unsecured credit card if you have limited credit history or a fair credit score, but there are plenty of more cost-effective options out there.

The Credit One Bank Platinum X5 Visa vs. the Credit One Bank Platinum Rewards Visa with No Annual Fee

The Credit One Bank Platinum Rewards Visa with No Annual Fee could be a better option for cardholders who don’t want to shell out the money for the annual fee. However, if you’re looking to earn a high amount of rewards in everyday categories like gas and grocery spending, the Platinum X5 Visa is the top contender. That is, if you spend enough to earn back your annual fee through cash back rewards.

Rewards on gas and groceries aren’t as lucrative with the Credit One Platinum Rewards Visa with No Annual Fee, but there are fewer restrictions. Cardholders earn an unlimited 2 percent on gas, grocery, cable and satellite TV services, mobile phone and internet service purchases. This is far lower than the Platinum X5 card’s rewards rate, but the Platinum Rewards Visa is a far more convenient card. To make the Platinum X5 worth it, you’ll need to spend at least $3,200 in a year to earn enough rewards to both recoup your annual fee and earn more than you would with the Platinum Rewards Visa.

That said, for cardholders looking for a tool to build their credit, the Credit One Bank Platinum X5 Visa is likely the better option — or it’s the only option. The Credit One Bank Platinum Rewards Visa with No Annual Fee has a higher barrier to entry than the Credit One Bank Platinum X5 Visa.

The Credit One Bank Platinum X5 Visa vs. the Capital One QuickSilverOne Cash Rewards Credit Card

Both cards are equally accessible for cardholders with fair credit. The Capital One QuicksilverOne Cash Rewards Credit Card and its flat-rate rewards structure could be easier to manage for cardholders newer to credit card rewards. QuicksilverOne Cash Rewards cardholders will earn 1.5 percent unlimited cash back on every purchase with no spending cap.

The QuicksilverOne Cash Rewards $39 annual fee is more affordable than the Credit One Bank Platinum X5 Visa’s, but cardholders who may carry a balance from month to month might still want to choose the Credit One Bank Platinum X5 Visa. Its APR (28.74 percent variable) is slightly lower than the 29.99 percent variable APR on the QuicksilverOne Cash Rewards card. Your decision may hinge on the balance you carry though. If you’re carrying a minimal balance, the 1.5 percent difference may not be substantial enough to out pace the $56 difference between annual fees on either card.

Best card to pair with the Credit One Bank Platinum X5 Visa

This card is a solid credit-building tool. It may be worth it to focus on building your credit while using it instead of pairing it with another credit card. Tools like Experian Boost — a free feature from the Experian credit bureau that aims to help you boost your credit score — are better to pair with this type of credit card.

If you are set on pairing the Credit One Bank Platinum X5 Visa with another card, you might consider the Discover it® Cash Back. If you can qualify for it, this card can expand your rewards earnings potential. With no annual fee, you’ll benefit from rotating bonus categories that give you a chance to continue earning 5 percent cash back (on up to $1,500 in rotating categories each quarter when activated, then 1 percent) without meeting the $5,000 spending cap of the Credit One Bank Platinum X5 Visa.

The Credit One Bank Platinum X5 Visa credit card dangles an alluring 5 percent cash back rewards rate (up to $5,000 in purchases per year, then 1 percent) on major expenses like grocery, gas and eligible digital services. But the $95 annual fee and restrictive card terms may take a toll on your patience, and even your credit building efforts, during a time when being conservative in your spending might be a better approach.

Its rewards rate may look fantastic while you’re window shopping, but you can easily find well-rounded credit cards that won’t nickel and dime as you build your credit score and work towards qualifying for a full-fledged rewards card.