The new Xbox Mastercard isn't worth it: Here's why

Microsoft announced the first-ever Xbox Mastercard, a no-annual-fee credit card issued by Barclays, that can be used to earn points with everyday purchases and use them to redeem games and other valuables in the Xbox Store.

The Xbox Mastercard comes with a lot of benefits, according to Microsoft, including:

• A bonus of 5,000 card points (a $50 value) after your first purchase. 
• 3 months of Xbox Game Pass Ultimate for new Game Pass members after their first purchase. If you are a Game Pass member, you gift it to a friend to play together. 
• The option of personalizing your Xbox Mastercard with your gamertag. 
• Flexibility of use with contactless payments and digital wallets. 
• Free online access to cardmembers’ FICO Credit Score, which allows you to keep an eye on your credit score and receive alerts when your score has changed. 
• $0 Fraud Liability protection, so you won’t be responsible for charges you didn’t authorize. 

While the benefits might seem intriguing enough to get this card, in the long run, it’s not a great idea. Even more, if you were to choose Xbox Mastercard as your first card, you wouldn’t make the wisest decision.

For this card to be true of use, you’d need to make Xbox purchases on a regular basis. That would be the only way to earn enough points to actually spend them afterward.

Xbox Mastercard: a good-looking bad idea

Microsoft says that the more you purchase games and other valuables on the Xbox Store, the more points you earn in your Xbox Mastercard.

For example, players can earn card points for every $1 spent on purchases including:

• Xbox & Microsoft – Earn 5x card points on eligible products at the Microsoft Store.  
• Streaming Services – Earn 3x card points on eligible streaming services like Netflix® and Disney+®. 
• Dining Delivery Services – Earn 3x card points on eligible dining delivery services like Grubhub® and DoorDash®. 
• Everyday purchases – Earn 1x card points on all other everyday purchases. 

Aside from streaming services, such as Netflix and Disney+, which could be somewhat considered free (but you still have to pay the subscription to them), the rest of the options that you can use to earn points include a form of purchasing.

So, to actually earn points, you’d have to spend a lot of money. And for every 100 points that you earn, $1 will go to your Xbox Mastercard.

• 100 points = $1
• 1000 points =$10
• 10000 points = $100

As you can see, you’ll need to earn a lot of points to actually gather a sum of $100 in your Xbox Mastercard account.

No-annual-fee, sure, but an Xbox card can still get you in debt if you don’t use it much

Xbox Mastercard’s terms and conditions claim that you won’t have to pay any annual fee for it. However, before considering whether to get one or not, you should, at least, take a closer look at its Annual Percentage Rates:

• Annual Percentage Rate (APR) for Purchases – 20.99%, 26.99%, or 31.99%, based on your creditworthiness.
• APR for Balance Transfers – 20.99%, 26.99%, or 31.99%, based on your creditworthiness.
• APR for Cash Advances – 32.49%.

Plus, you’ll have to consider the Xbox Mastercard’s transaction fees as well:

• Balance Transfer – Either $10 or 5% of the amount of each transfer, whichever is greater.
• Cash Advance – Either $10 or 5% of the amount of each cash advance, whichever is greater.
• Foreign Transaction – 3% of each transaction in U.S. dollars.

This means that if you have $1000 on your Xbox Mastercard, with an interest rate of 31.99%, and a monthly payment of $100, with an introductory balance transfer of 5% for 18 months, you’d need to pay $59 a month on the balance transfer card to pay off your balance before the intro period ends.

If you paid off your balance by the end of the intro period, you’d save $122 in interest.

If you fail to do so, you’ll have a penalty fee of $41, whether we talk about late payments or returned payments.

As you can see, managing your Xbox Mastercard will not only be a chore, but a full responsibility that can easily get you in debt, if you have no previous experience with credit cards.

Microsoft Rewards is still around, and it still offers a lot of perks

The only significant perk that comes with Xbox Mastercard is the 3 months of Xbox Game Pass Ultimate. But if you’re already a subscriber to the plan, then it’s useless.

If you know your way around credit cards, and you already are a big spender on the Xbox Store, sure, go ahead, and get the card.

But if not, you shouldn’t bother. Microsoft Rewards is there for you, and using it daily to complete simple tasks can prove to be much better than the Xbox Mastercard, in the long run.

People are able to pay for their monthly Game Pass subscriptions with Microsoft Rewards points. Even more, you can get Xbox consoles, or games such as Starfield, for free, by simply buying them using Rewards points.

Plus, it’s very easy to earn Rewards points. For example, we have developed a guide on how to get the maximum number of daily Rewards points and it turns out you only need 15 to 20 minutes to do so. More than shopping on the Xbox Store, or watching countless Netflix shows.

So, go for the Microsoft Rewards instead. It’s completely free, and you can easily do it every day.

Some interesting notes from the Xbox Mastercard’s terms of conditions

Microsoft is keen to stress that the Xbox Mastercard is a no-annual-fee credit card, and the benefits are worth it, but if you take a closer at its terms and conditions, you might want to rethink it.

For example, the 5,000 card points (a $50 value) after your first purchase bonus can be canceled at any time, without notice.

• You will earn 5,000 Card Points after your first Net Purchase within the first 180 days of your Account open date. This offer may be canceled at any time without notice.

Your Xbox account needs to be active and running:

• You must have an active Microsoft account, with an Xbox profile, to apply for the Xbox Mastercard.
• If your Microsoft account is closed, for any reason, you will forfeit Account benefits fulfilled by Microsoft (Game Pass Ultimate codes and redemption of Card Points toward Redemption Eligible Purchases).
• If your Microsoft account is temporarily suspended or otherwise locked, your access to Account benefits fulfilled by Microsoft will be unavailable during the time in which your account is suspended or otherwise locked.
• You must maintain an open Account that is in good standing. “Good Standing” means your Account is not in default under your Cardmember Agreement with us (in “Good Standing”).
• You must be an individual (corporations, partnerships, and other entities may not participate) and use the Account only for personal, family, or household expenses.

No Card Points for using a digital wallet to pay for authorized purchases

It seems that you won’t earn Card Points if you use a mobile or digital wallet to pay for the purchases. Microsoft or Barclays will not help you either if the purchases meant for earning Card Points from authorized merchants are incorrectly coded, something you would have no control over.

• Purchases must be submitted by merchants using the merchant category codes and merchant identifiers for purchases in the above-specified categories to qualify for the additional Card Points. Barclays and Microsoft are not responsible for incorrectly coded purchases.
• Additional Card Points may not be earned if the merchant submits the purchase using a mobile or wireless card reader or if you use a mobile or digital wallet to pay for the purchase. Additionally, purchases made through third parties, including online marketplaces and resellers, or using a third-party payment account will not earn additional Card Points.

In other points, the Game Pass Ultimate has to be canceled, otherwise, it will automatically charge you up after the 3-month period.

• Unless cancelled, Game Pass Ultimate subscription continues automatically at the regular monthly price when the promotional period ends.
• If gifting your Game Pass Ultimate code to a friend, the same offer terms apply.

You might want to go through the entire Terms & Conditions for the new Xbox Mastercard, but what you should know is this: its drawbacks outshine its benefits, and if you’re not a big spender anyway, it’s not worth it.

However, you might want to give it a try, if you’re already investing a lot of money in all things Microsoft and Xbox.

We’d love to hear your opinion on the Xbox Mastercard. What do you think? Is it worth it or not?