5 Things to Know About the Xbox Credit Card
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The Xbox Mastercard offers Microsoft loyalists a way to level up their rewards on hardware and software purchases made in the digital Microsoft Store. But even if you break the bank on games and gear, a standard cash-back credit card would probably be better.
Issued by Barclays, the $0-annual-fee Xbox Card comes with a modest sign-up bonus and also earns bonus points on qualifying food delivery and streaming services. However, redemptions are limited to Microsoft-specific games and add-ons, making point values inherently limited.
Here are five things to know about the Xbox Card.
The Xbox Mastercard launched on Sept. 21, 2023, for select Xbox Insiders who joined the Xbox Card preview. You can apply to become an Xbox Insider through your Microsoft account. According to Barclays, the card will be available to the general public in early 2024.
» MORE: Best credit cards for gamers
1. Reward rates are solid …
You’ll need to sign in or create a new Microsoft account to apply for the Xbox Card. Once approved, you can select from one of five Xbox-themed card designs for a physical card that will be mailed to your address on file.
Photo courtesy of Barclays.
Cardholders will earn:
5 points per $1 spent on qualifying games and purchases within the Microsoft Store.
3 points per $1 spent on eligible delivery and streaming services, such as DoorDash, Grubhub, Netflix, Hulu, Spotify and many others.
1 point per $1 spent on all other qualifying purchases.
A complimentary three-month subscription to Xbox Game Pass Ultimate (new Game Pass members only).
Qualifying purchases for 5x rewards include personal computers, software and electronics sold in the Microsoft Store, Xbox Design Lab and on the Xbox App. Among the exclusions are in-game transactions for game-proprietary stores (such as the Minecraft Store) and purchases in the Xbox Gear Shop, Bethesda Gear Store and third-party retailers.
2. … But redemptions are limited
Points are worth 1 cent a piece (i.e., 100 points = $1) and can be redeemed for games and add-ons in the digital Microsoft store. That creates a solid return for qualifying spending with Microsoft and on food delivery during your marathon gaming sessions. But since those are your only redemption options, you’ll be trapped in the Microsoft gaming ecosystem.
A rewards card that provides more flexibility would be better for most people. The $0-annual-fee Chase Freedom Unlimited®, for example, earns 5% cash back on travel booked through Chase; 3% back on dining and drugstore purchases; and 1.5% back on all other purchases, with no restrictions on where you can use your rewards. You can also earn the following sign-up bonus: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
3. There's a modest but easy-to-snag sign-up bonus
Cardholders will receive a bonus of 5,000 points (worth $50) after making their first purchase with the card. New Xbox Game Pass members will also receive a complimentary three-month subscription to Xbox Game Pass Ultimate, which normally costs $16.99 a month and offers perks like access to a variety of different games, as well as various deals and discounts.
While a small bonus with no minimum spending requirement is better than no bonus, you can do better. The Wells Fargo Active Cash® Card offers the following introductory offer: Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. You’ll also earn an unlimited 2% cash rewards on all purchases. Since rewards (including the bonus) can be spent anywhere, you’ll have more freedom and not be locked in to spending solely on Microsoft games.
4. You’ll receive an instant card number upon approval
Once approved for the Xbox Mastercard, your card details will instantly be added to your Microsoft profile, allowing you to make purchases before receiving the physical card in the mail. This could allow you to apply on the same day as that next game release and earn 5x rewards for your purchase.
5. Carrying a balance could be costly
As of October 2023, the Xbox Card comes with a variable APR topping 31%. That’s an astronomical rate that should incentivize you to pay your balance in full each month.
If you do need to carry a balance or finance a big purchase, consider a card that offers an introductory 0% APR period. The Citi Simplicity® Card, for example, features a 0% Intro APR for 21 months on Balance Transfers and 12 months on Purchases, and then the ongoing APR of 19.24%-29.99% Variable APR. That can give you time to whittle down your balance without paying costly interest.
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