M1 Finance Owner’s Rewards Credit Card Review: How to Maximize Up to 10% Cash Back

(Update January 2022: M1 Finance has sweetened the deal on this credit card with a $300 intro offer: Spend $4,000 with your new Owner’s Rewards credit card in the first 90 days and earn a $300 statement credit. This may tip the scales in favor of applying if you were previously on the fence.)

M1 Finance has been teasing their “10% cash back for investors” credit card for a while, and they finally released (nearly?) all of the details. First, know that you need to subscribe to their premium M1 Plus service, which adds a bundle of upgraded services for $125 a year. This card has no annual fee and will initially only be available to apply if you have M1 Plus. I believe that all M1 customers can get their first year of M1 Plus for free.

The M1 Finance Owner’s Rewards card has three boosted cash back tiers: 10% cash back, 5% cash back, and 2.5% cash back. You get 1.5% cash back on everything else. Max $200 cash back per calendar month. The unique requirement here is that you need to actually “own” at least some partial shares of each company in order to enjoy the cash back from that company.

Must own securities in a qualified M1 investment account as explained in M1’s Owner’s Rewards Terms & Conditions to be eligible for 2.5%, 5%, & 10% categories. Trust and custodial accounts are not eligible investment accounts. These terms will be available once the card application is accessible, and the terms and companies listed are subject to change. Securities shown should not be considered trade recommendations. You should assess your own investment risks prior to purchasing any securities shown.

1.5%-10% credit card cash back rewards earned on eligible purchases subject to a maximum of $200 cash back per calendar month.

Here are all of the brands (ticker symbol):

10% Cash Back Brands (16)

• Adobe (ADBE)
• AMC (AMC)
• Chewy (CHWY)
• Dropbox (DBX)
• Gamestop (GME)
• Bath & Body Works (BBWI)
• Victoria’s Secret (VSCO)
• Lululemon (LULU)
• Netflix (NFLX)
• Purple (PRPL)
• Peloton (PTON)
• Stitch Fix (SFIX)
• Spotify (SPOT)
• Tesla (TSLA)
• Ulta Beauty (ULTA)
• Wayfair (W)

(Tesla 10% cash back note: My research indicates that you can put the $1,000 initial ordering fee (basically down payment) for a new Tesla on a credit card, but nothing else after that. Possibly also future repairs and maintenance costs? Some people have indicated that they charged the $10,000 “full self driving” (FSD) fee on a credit card when they added it as a separate charge after purchasing the car. Others have said this option is no longer available, so I would check with Tesla directly first. I’m also not sure if M1 will give you a $10,000 credit line.)

5% Cash Back Brands (14)

• American Airlines (AAL)
• Chipotle (CMG)
• Delta Airlines (DAL)
• Dollar General (DG)
• Domino’s Pizza (DPZ)
• Etsy (ETSY)
• Reverb (ETSY)
• Fedex Kinko’s (FDX)
• JetBlue Airways (JBLU)
• Southwest Airlines (LUV)
• Converse (NKE)
• Nike (NKE)
• Starbucks (SBUX)
• Home Goods (TJX)
• HomeSense (TJX)
• Marshall’s (TJX)
• Sierra (TJX)
• TJ Maxx (TJX)
• United Airlines (UAL)
• UPS (UPS)

2.5% Cash Back Brands (21)

• Apple (AAPL)
• Airbnb (ABNB)
• Amazon (AMZN)
• Audible (AMZN)
• Twitch (AMZN)
• Whole Foods (AMZN)
• Zappos (AMZN)
• Best Buy (BBY)
• Comcast (CMCSA)
• Costco (COST)
• Caviar (DASH)
• Doordash (DASH)
• Ebay (EBAY)
• Home Depot (HD)
• Lowe’s (LOW)
• Lyft (LYFT)
• McDonald’s (MCD)
• Burger King (QSR)
• Popeyes (QSR)
• Tim Hortons (QSR)
• Burger King (QSR)
• AT&T (T)
• DirecTV (T)
• HBO (T)
• AT&T (T)
• Target (TGT)
• Sprint (TMUS)
• T-Mobile USA (TMUS)
• Postmates (UBER)
• Uber (UBER)
• Uber Eats (UBER)
• Verizon Wireless (VZ)
• Duane Reade (WBA)
• Walgreen’s (WBA)
• Bonobos (WMT)
• Moosejaw (WMT)
• Sam’s Club (WMT)
• KFC (YUM)
• Pizza Hut (YUM)
• Taco Bell (YUM)

At first, I thought this would be kind of cool, but after compiling this long list with only a limited number at the full 10% cash back, it just feels too complicated. My spending habits don’t necessarily align with my investing habits. Is a few dollars in extra credit card rewards worth changing up my entire investment policy? What if I just want to get 2.5% cash back from Costco, 10% cash back from Adobe, and so on without changing a potentially large portfolio? Let’s look at the rules:

• You can open up to 5 accounts under one M1 Finance login. This can be any combination of individual taxable accounts, retirement accounts and trust accounts. (Trust accounts are not eligible for this cash back program.)
• Each slice in a pie has to be allocated at least 1%.
• The target percentages of all the slices add up to 100%.
• Any buy order must equal a minimum of $1.00 per security before a trade will be executed.
• If you open using a referral link, right now you just need to deposit $100 into an individual taxable account and leave it there for 30 days, and you’ll get a $50 bonus.

Therefore, here is a minimal-hassle strategy to qualify for ALL of these cash back brands:

• If you don’t have an M1 account yet, open using a $50 bonus referral link and plan to deposit at least $100.
• If you already have an M1 account, but don’t want to alter your existing pie, open a second, separate taxable account under the same login, with the plan to deposit $100 all at once.
• Create a separate, new “pie” asset allocation using all of the brands you possibly might purchase from above. Each brand must be at least 1% each, and the total must add up to 100%. This should be easy, as I counted only 51 total stocks.
• Deposit $100 all at once, creating one trade with a least $1 for each company. You’ll now be an “owner” of all the companies, and thus get the cash back for each company. Just keep the account open with this small amount. Invest your other funds as you did previously.
• If M1 changes up the companies at a later time, you might have to adjust your pie and add some more money to rebalance. In all likelihood, this group of stocks will still grow over time, even if it doesn’t track exactly with the rest of your investments.

If you are regularly spending big bucks at the 10% and 5% categories above, then this little maneuver may be worth the effort. I’m sure there are some folks out there are dropping hundreds of dollars when you add up the monthly bills from Chewy, Netflix, Spotify, Peloton, Lululemon, etc. I think the only places that I’ve shopped from on the 10% list recently is Netflix, and I get 6% cash back on all my streaming from my AmEx Blue Cash Preferred.

Another question is if the addition of this card makes all the M1 Plus perks now worth the $125 per year. For example, their checking account pays a higher 1% APY with M1 Plus and you get some lower 2% APR margin interest rates. I don’t know if the incremental improvement works out for my personal situation. I already get higher bank interest rates elsewhere, and I can already get an effective 2.6% cash back on everything with my BofA relationship card, so only the 5% and 10% categories would be of additional benefit.

I have an M1 Finance account and I like their base product a lot as a DIY investor. I like that they are adding features to their paid M1 Plus tier. However, without a sign-up bonus, I am probably going to pass on the M1 Owner’s Rewards credit card. Your spending patterns may be different, and thus your cost/benefit may be different.