M1 Finance Owner’s Credit Card Review

Snapshot

• Fee – Free for M1 Plus members or $95 per year for basic M1 members
• Benefits/rewards – M1 Members earn 2.5%, 5%, or 10% cash back rewards on spending they do with companies they’ve invested in. Any spending at companies you aren’t invested in earns 1.5% cashback.

Editorial Review

Who Is M1 Finance?

M1 Finance is an investment and banking platform. It’s free for anyone to join and download the app on iOS and Android devices. 

On the investing side, M1 is a self-directed investment platform with automated investing options if you want a more hands-off approach. Investors can create a custom portfolio that M1 calls ‘pies’ made up of stocks and funds chosen by you. Or you can select from an assortment of portfolios created by experts.

You can buy full shares or fractional shares using M1 Finance. This makes it easy to build your portfolio either yourself or through automated investing. If you choose the hands-off approach, you can also take advantage of automatic rebalancing, which gets your portfolio back in line with your goals when things change. 

The Owner’s Card – A Summary

The M1 Owner’s Card is a Visa credit card that’s tied to your M1 investment account. When you use the card at companies you’ve invested in through M1, you’ll earn a larger reward in cashback that you can reinvest into your portfolio, increasing your assets.

Cardholders can earn up to 10% cashback on their favorite brands if they hold investments for that brand in their pies (portfolios). If you don’t own stock or assets in the companies, you use your card at, you’ll still earn 1.5% cashback on your purchases.

The Owner’s Card is a way to get rewarded for shopping at stores you believe in and have already invested your money in. Making their stock a part of your portfolio is like casting your vote for the company, as is shopping there. As an M1 Owner’s cardholder, though, you can get rewarded for your efforts by increasing your investment in the company with cashback rewards.

Pros

The M1 Owner’s Card has many benefits, including the following.

No Annual Fee for M1 Plus Members

M1 Plus members don’t pay an annual fee. The credit card is included in their $125 annual fee for being a Plus member.

Reinvest in Your Favorite Brands

You can automatically reinvest the cash back you earn by shopping at your favorite brands. This increases your portfolio without any extra money out of your pocket.

An Additional Income Stream

The cashback you earn can be another income stream to grow your portfolio that you don’t have to think about or worry about forgetting to invest.

There Are Four Reward Levels

You can earn in all four reward levels starting at 10% at stores like Lululemon and Netflix; 5% back at stores like Chipotle, Nike, and FedEx, and 2.5% back at stores like Amazon, Best Buy, and DoorDash. Using the card to make purchases at companies not in your portfolio/pie or elsewhere still earns a 1.5% cashback reward.

By the way, you only need to have a fractional share of the brand/stock in your portfolio to earn the higher reward levels.

Fraud Protection

Shop worry-free, knowing that M1’s card has all the benefits of Visa’s Zero Liability Policy. This policy requires card issuers like M! to replace funds taken from your account as the result of an unauthorized credit or debit transaction within five business days of notification. 

The Card Is Aesthetically Pleasing

Not that you get a credit card because it’s pretty, but the M1 Owner’s Card is a slick, attractive metallic card.

Cons

Like any credit card, there are some downsides you should be aware of as well.

You Must Be an M1 Plus Member

To get the M1 Owner’s card, you must be an M1 Plus member initially. The fee is $125 per year, but it’s waived the first year. 

Annual Fee if You Aren’t an M1 Plus Member

If you don’t renew your M1 Plus membership after the first year, the card has a $95 annual fee.

You Must Own the Securities for the Stores You Shop At

To earn the higher level of rewards, whether 10%, 5%, or 2.5%, you must own the securities for the store you shop at. For example, if you shop at Lululemon but don’t own Lululemon stock, you won’t earn the 10% cashback reward. Instead, you’d earn 1.5% cashback. On the positive side, even an investment of one cent in the retailer qualifies you for the increased cash back.

Certain Accounts Aren’t Eligible

If your portfolio is in a trust or you have a custodial account, they aren’t eligible for the cashback rewards.

Not a Lot of Stores Participate

To date, there are about 75 stores that offer higher cashback rewards, which isn’t a lot compared to the number of securities you can open.

Limit on Rewards

You can only earn a maximum of $200 in rewards on eligible purchases per month.

Other Limitations

While the card may be used just like any other Visa, the M1 Owner’s Card doesn’t allow balance transfers. They also don’t report your account to the three credit bureaus like other credit cards do to help build your credit.

How to Apply for the M1 Owner’s Card

If you’re a member of M1 Finance, you can apply for the card online through your account. Most applicants get an answer right away, but M1 Finance can do a manual review that takes up to 30 days if you’re declined initially.

When you apply for the M1 Owner’s card, they will check your Experian credit score, which results in a hard inquiry on your credit report, and if you’re declined, they will mail you a reason why – they won’t tell you right away.

Rewards

To earn rewards, you must own the stock of that brand. For example, if you pay for Netflix with your Owner’s Card and want to earn the 10% rewards, you must own at least $0.01 in Netflix stock.

When you use your card to shop at your favorite brands that you own stock in, you automatically earn the rewards, which you can use in one of two ways.

 

• Reinvest in your portfolio – You can automatically set your rewards to reinvest in your portfolio. You don’t have to do anything after selecting this option, and your rewards automatically help increase your portfolio.

• Receive as cash – You can also choose to receive your rewards as cash in your ‘Spend’ account at M1 Finance, which is like a checking account. You can then withdraw the cash as needed.

Maximizing Rewards for the Year

To maximize your rewards for the year, you should shop from the 10% category as much as possible. This means using your card at:

• AMC
• Spotify
• Netflix
• Lululemon
• Stitch Fix
• Wayfair

You could also focus on shopping at stores in the 5% category, including:

• Chipotle
• Domino’s
• Starbucks
• HomeGoods
• Marshalls
• TJ Maxx
• Converse
• Nike
• Sierra

The 2.5% cash back category isn’t bad either and can be a great filler. These stores include:

• Apple
• Amazon
• Audible
• Whole Foods
• Home Depot
• Lowe’s
• Target
• HBO
• Sprint

You can earn a maximum of $200 in rewards monthly. If you make a large purchase, such as at Peloton, where you can earn 10% back if you spend $2,000, you will hit your maximum with one purchase.

You can also earn a 5% reward back on plane tickets on a $4,000 purchase, or you can sign up for subscriptions at eligible stores like to make sure you always hit your goal.

The easiest way to hit the $200 reward is to focus on stores where you can earn 10% back when you can, which helps with large purchases, while focusing on using your card for everyday purchases at stores like Target, Amazon, Walmart, and Walgreens where you only earn 2.5% back. Still, if you use it for your regular monthly spending, it could be easy to hit your $200 target.

How Much Can I Earn With the M1 Card?

As noted above, the cash back rewards are capped at $200 a month. If one were to maximize their monthly rewards, the yearly total would be $2,400. But that’s just the start.

Investing these rewards with M1 is where the real benefit lies. Let’s assume one invests these rewards in a total U.S. stock market ETF (e.g., Vanguard’s fund is ticker VTI). If we further assume an annual 8% return, the $200 monthly cash back would grow to about $14,700 in five years. In 10 years the total would reach more than $36,500.

Alternative Cards to Consider

While no other rewards credit card is like the M1 Owner’s Card, here are a few credit cards tied to brokerage accounts to consider.

Fidelity Rewards Visa Signature Card

The Fidelity Rewards Visa Signature Card pays users 2% cashback on all purchases that they can redeem for cash back in their spend account or reinvest in their portfolio. There are no limits on the rewards, and there aren’t any special categories for bonus earnings.

The Fidelity Rewards Visa Signature Card also has no annual fee, and there’s no specific account you must have to qualify for. However, to get the card, you do need excellent credit.

Schwab Investor Card® from American Express

To open a Schwab Investor Card® from American Express, you must have an eligible Schwab account, including a Schwab One® Bank Account, Schwab general brokerage account, or Schwab retirement account.

Cardholders earn 1.5% cash back on all purchases and a $200 statement credit if you spend $1,000 in the first 90 days. Cardholders also get a 0% APR for the first six months.

TD Ameritrade Client Rewards Card

The TD Ameritrade Client Rewards Card pays 1.5% cash back on all purchases, with no categories to follow. Cardholders can redeem their cashback in their spend account, or they can reinvest the funds in your TD Ameritrade brokerage account. If you choose to put the funds in your brokerage account, you get a 10% bonus on your rewards.

There is no limit as to how much you can earn, and cardholders earn 10,000 bonus points if they spend at least $500 in the first 90 days of opening the account. 

Citi^® Double Cash Card - 18 month BT offer

The Citi^® Double Cash Card - 18 month BT offer isn’t tied to a brokerage account, but it pays 2% cashback on all purchases. You earn 1% cash back when you make the purchase and then another 1% cash back when you pay it off. When you pay your bill, the extra 1% earnings is an incentive to pay your credit card balance off faster to earn the cash back. 

The Bottom Line

M1’s online platform and its powerful tools make it an ideal way to invest money while watching your investments grow. Appealing to its M1 Plus users, the M1 Finance Owner’s Rewards Card offers no monthly or service fees and the ease of use associated with already using the platform.

Pros & Cons

Pros

• No Annual Fee for M1 Plus Members – M1 Plus members don’t pay an annual fee. The credit card is included in their $125 annual fee for being a Plus member.
• Reinvest in Your Favorite Brands – You can automatically reinvest the cash back you earn by shopping at your favorite brands.
• Members earn 2.5%, 5%, or 10% cash back rewards on spending they do with companies they’ve invested in. Any spending at companies you aren’t invested in earns 1.5% cashback.
• Visa’s Zero Liability Policy requires card issuers like M1 to replace funds taken from your account as the result of an unauthorized credit or debit transaction within five business days of notification.

Cons

• You must be an M1 investor.
• M1 Plus membership cost is is $125 per year, but it’s waived the first year.
• If you have an M1 Basic membership, the card has a $95 annual fee.
• To earn the higher level of rewards, whether 10%, 5%, or 2.5%, you must own the securities for the store you shop at. On the positive side, even an investment of one cent in the retailer qualifies you for the increased cash back.
• If your portfolio is in a trust or you have a custodial account, they aren’t eligible for the cashback rewards.
• Not a lot of stores participate
• You can only earn a maximum of $200 in rewards on eligible purchases per month.
• No balance transfers.
• Does not report your payment history to the credit bureaus and will not build your credit history.

Who the card is best for

Who is the M1 Owner’s Card Best For?

Anyone with an M1 account can benefit from the M1 Owner’s Card, but it’s best for people who own stock where they shop or do business. For example, if you own Netflix stock, it makes sense to have the M1 Owner’s card and earn money back on your monthly bill – it’s like getting free money.

The M1 Owner’s Card is a great way to maximize your rewards. With a regular rewards card, you might receive cash back or travel rewards. With the M1 Owner’s Card, you not only get cash back, but you can reinvest the funds in the stock market to grow your investments.. 

M1 offers not only an investment platform but a rewards credit card, loans with attractive terms, and checking and savings accounts with competitive interest rates if you have an M1 Plus membership.

However, something to consider is if you’ll use the M1 Plus features. It’s free for you to try it for the first year, but then it’s $95 per year if you don’t sign up for M1 Plus. Features of the membership include:

• An additional afternoon trading window versus just a morning trading window with the regular account
• Lower rates on loans starting at 2%
• 1% APY on checking and savings accounts
• Four free ATM reimbursements per month

Alternatives

While no other rewards credit card is like the M1 Owner’s Card, here are a few credit cards tied to brokerage accounts to consider.

Fidelity Rewards Visa Signature Card

The Fidelity Rewards Visa Signature Card pays users 2% cashback on all purchases that they can redeem for cash back in their spend account or reinvest in their portfolio. There are no limits on the rewards, and there aren’t any special categories for bonus earnings.

The Fidelity Rewards Visa Signature Card also has no annual fee, and there’s no specific account you must have to qualify for. However, to get the card, you do need excellent credit.

Schwab Investor Card® from American Express

To open a Schwab Investor Card® from American Express, you must have an eligible Schwab account, including a Schwab One® Bank Account, Schwab general brokerage account, or Schwab retirement account.

Cardholders earn 1.5% cash back on all purchases and a $200 statement credit if you spend $1,000 in the first 90 days. Cardholders also get a 0% APR for the first six months.

TD Ameritrade Client Rewards Card

The TD Ameritrade Client Rewards Card pays 1.5% cash back on all purchases, with no categories to follow. Cardholders can redeem their cashback in their spend account, or they can reinvest the funds in your TD Ameritrade brokerage account. If you choose to put the funds in your brokerage account, you get a 10% bonus on your rewards.

There is no limit as to how much you can earn, and cardholders earn 10,000 bonus points if they spend at least $500 in the first 90 days of opening the account. 

Citi Double Cash Citi^® Double Cash Card - 18 month BT offer

The Citi Double Cash Citi^® Double Cash Card - 18 month BT offer card isn’t tied to a brokerage account, but it pays 2% cashback on all purchases. You earn 1% cash back when you make the purchase and then another 1% cash back when you pay it off. When you pay your bill, the extra 1% earnings is an incentive to pay your credit card balance off faster to earn the cash back.