Clarifying that Brex post: what it boils down to is the rewards

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Earlier this morning, I published a post about Brex Cash. Since publishing that post, I learned a number of facts that I’d previously missed (and shouldn’t have) and I realized that some readers may have misread my original tone and intention.

I originally wrote that a couple of business statistics websites listed Brex as having only ~20 employees. It has since come to my attention that the Brex LinkedIn page lists 557 employees. I wrote that Brex has no physical addresses listed on its website, though the contact us page does in fact have 4 physical locations. I referenced and linked to that page in the original post but somehow didn’t see those offices when I began writing the post a couple of days ago. While the website doesn’t list officers like CEO and doesn’t mention the founders by name, it does link to articles at The New York Times and Forbes Advisor profiling the company and its founders. And as of last month, Brex announced that it is seeking an industrial bank charter with the FDIC, which presumably means that they think they have what it takes to be a major player in the market. I missed those key pieces that are relevant and paint a fuller picture of Brex than the one I originally envisioned based on the limited information I had found. I shouldn’t have missed those things. I clearly didn’t dig as deep as I thought I had. My fault there.

I think Brex is legit. When I wrote the post this morning, I didn’t mean to insinuate that I think the founders or company is going to disappear to a foreign place with wads of cash falling out of their pockets. Brex partners with an FDIC-insured bank, so I expect deposits to be as safe as with any other bank.

However, none of the above changes my ultimate conclusion: Brex seems disorganized and as a new and in my opinion not-ready-for-prime-time player in the loyalty rewards realm, I don’t think it’s wise to leave rewards unredeemed. We don’t have the same track record for Brex that we do for Chase Ultimate Rewards, Amex Membership Rewards, or Citi Thank You points. When I found that the founders of Brex had no previous banking experience and no more than 3 years of startup experience, it didn’t make me feel confident that they know either the business banking or loyalty rewards spaces well enough for me to hold the points at risk of devaluation.

And indeed to this point, Brex has handled new customer acquisition poorly with a large segment of readers, some of whom are reporting unexpected shut down letters, others having long-established LLCs flat-out denied, and yet others having less established businesses approved, and quite a few reporting not hearing back about their applications for weeks. As I noted this morning, I received one of those shut down letters on Monday and then on Wednesday got an email saying that my account was ready to go and it was totally reactivated. The inconsistency combined with what seemed like little easily accessible information on the Brex website and the pieces I read elsewhere made me less bullish about the long-term value of Brex rewards. I intend to continue to earn points with Brex (so I’ll obviously keep some money on deposit with them), but for the time being I intend to redeem rewards as I earn them because I don’t know when they may devalue or change or be forfeited in a shut down.

And my key takeaway from this morning’s post was the fact that it is always wise to redeem rewards more quickly with newcomers in the loyalty rewards field, which is something I think Greg and I had both sort of forgotten in our excitement over this new transferable currency and large bonus. Whether a cash back app of some sort or the new business banking platform offering a bunch of transferrable points, it makes sense to redeem those points sooner rather than later. That is counter-intuitive to how we typically think of transferable points (since transferability increases value). In this case, we don’t know that Brex points will be as good one year from today as they are now. Neither do we know that they won’t be better with even more transfer partners. But I’m not going to risk it. I think I’ll likely redeem with Avianca LifeMiles and beef up a stash of those points given that I can easily keep those miles alive and they are useful for me. Others may prefer to redeem for cash.

I’ll be curious to see how Brex shakes out in the long-term. I legitimately hope they are ultimately successful. I’ll be happy to see more competition in this space and I could see the account being useful, I just intend to go slowly with use and quickly with redemption for the time being as they work through their growing pains.

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Brian G

I wanted to post about my recent experience with Brex. I signed up when Nick had first posted about Brex. I have a corporation and applied (and was approved) on February 7 through the link provided where the 80,000 points could be earned on top of the 20,000 for using payroll (which was a PayPal transfer) and 10,000 for $3,000 spend. I hit the panic button after this post, around early March, and was concerned that I could have an issue getting the points and then getting the cash back rewards out of the Brex account and into my checking account.

I am happy to report that as of April 16 (it took me some time to spend the $3,000), I received all 110,000 points, which I converted to cash back rewards, and subsequently transferred to my checking account from Brex. In other words, I had no issues with Brex and received roughly $1,100 in cash back.

Thanks Nick!

Harry

Same here. Two accounts opened one 2/24 other 2/28. Rec’d 100K points and transferred out on both accounts. Working on last 10K in each account. As I posted previously, I took Greg’s advice and went slow. Also my sign-up on both accounts as quick as any of the big credit card companies. Have also used the account like a checking account paying accounts like American Express, Citi and others. You do have to allow a few more days on posting either in or out. Otherwise really no issues and will keep plus keeping some FF accounts live is a plus. Thanks Greg!

John

Brex wouldn’t honor the 110k promotion I signed up for and suspended my account. Couldn’t tell me a reason why it was suspended or when it would be reinstated. Anyone else have this experience? Definitely not a place I would rely on to hold funds or pay bills.

bgodiver

I opened one account, met the spend requirements, linked my PayPal account and have received 110K points plus my spend points. The account opening process was incredibly simple, requiring that I upload documentation verifying the EIN for my LLC. No problems.

I opened a second account using the same process. However, this time there was a delay in processing the information provided. Today I received the email saying my account is open and ready to go. The delay was no more than two weeks.

In addition, I received an email a week ago apologizing for the delay in reviewing the account application and saying that I would receive a 2500 reward point credit for the inconvenience once my first deposit was received.

Were they swamped and over-extended? Probably, but my measure of customer service is not the flubs that invariably happen, but how they fix it. Brex did a great job and I’m a happy customer.

Reuben

I started with my payroll bonus from Paypal trial deposits and got the 20,000 pts and ACH to my checking account immediately after reading your post, Nick. I’m glad you corrected your error so quickly but I’m concerned about depositing money and spending to get the 80,000 bonus through OMAAT. Any DPs from people who deposited money, got the bonus after spend and was able to ACH bonus out and balance of money out without trouble? Aaron seems to have problems but who knows where it’s coming from. TIA

Last edited 1 year ago by Reuben
Harry

Reuben I’m following along your path. Rec’d 20K off PayPal trial deposits and thus far all’s good – can’t complain. I am following Greg’s recommendation about easing money into the account. If I can get the 80K I would be more than happy. To chase another 10K points for $2,000 more spend could go either way. Oh, on the assumption everyone has the same bank, has anyone noticed Radius Bank, Boston, was bought out in February by LendingClub, SFO? I think Brex has access to the $$$ and no issues there.

Aaron

My 80,000 for 1k brex card spend bonus posted to my account last week, but then it disappeared from my account this morning.

Has anyone else had their 80,000 OMAAT bonus removed????

Evan Rakowski

One of the reasons I love this blog is that it always strives to be impartial and accurate. An updated post in 24 hours speaks to how wonderful it is, not the opposite.

And regardless of a few details being off, the thrust of the post was not “Brex is evil and don’t sign up.” It was “Myself and many others are having shady experiences with a new financial product, so be cautious.” Nothing about these updates invalidates those experiences or changes that advice, which remains good. Commenters on the-updated- post are reporting the same sorts of problems.

Open and transparent communication isn’t backpedaling, it’s integrity.

FreeLunch

Nick/FM is usually pretty thorough in his research. He is well intentioned. I don’t think anything he wrote was over the top. However, it would’ve been nice if FM did some fact checking before the article was published.

In the spur of the moment, I made some quick decisions to spend the dollars quickly and move the remainder funds out of my account. It looks like Brex may have locked my account. I will see if I get the bonuses and what happens from here.

Hindsight, after doing more thought about it, I acting with a little haste. I feel comfortable with my funds there as it’s FDIC insured. After using the site more, I can actually see ways they are doing things that are different from traditional banks that make sense. For example, not requiring credit (can be good and bad) and the ability to easily get your startup team “credit” cards for corporate spending. I think it’s crappy for a business to ask you for your SSN when getting a corporate card to do corporate spending. Plus if you read the terms closely, a lot of the times, you’re liable for the charges if the company goes belly up. Also, 4x on dining with a $0 fee card is not bad although you need to have funds sitting there to cover the charges.

I do think it’s not the best that Brex doesn’t have a phone number that you can call. But, I don’t think it’s the end of the world, provided they keep their chat customer service working well.

I should’ve done more research myself before doing this – my fault. For a little bit, I thought Brex could’ve been much smaller than what it is ~500 employees (perhaps some of those contractors). Also, it’s obvious from the website/app/system they setup that they’ve invested a lot to get to where they are right now. It’s not cheap to build all this stuff. Perhaps FM will also think about enabling some processes to fact check a little before things are published.

Regardless, I still believe in FM and Nick and think they provide excellent material!

Rob

Go easy on Nick, he was about 85% right and only about 15% wrong. His posts were in depth, value added and he was crystal clear about what he was basing his assertions on. But as one writing widely disseminated research quickly learns, the research needs to be unimpeachably accurate, especially when there are whiffs of impropriety raised.

quasimodo

that hasn’t stopped many articles re: covid. Point being – nature of life….not black & white

Valeria smythe

Sounds like backtracking of poor advice you given once again and another reason your words have really no value

mommatraveler

Valeria, if you don’t like the style of writing, just move on and follow a different blog! Why give yourself agita!

I happen to think Nick and Greg’s articles are some of the best out there in the universe of bloggers. FM is the only blog I religiously read. There are dozens of others that I read on an “as and when” basis, but FM is always timely in posting useful information and the articles are well written.

I also like the fact that Nick “owned” his “mistake” and very promptly posted to clear things up. His key points still stand, though, that in new ventures like this, make sure you redeem your points early to avoid the potential of losing them or having them devalue.

paul5795

I agree with mommatraveler. Nick and Greg are still, by far, the best travel bloggers out there. Even great journalists make mistakes . . . but then own up to them as fast as possible. Hence the corrections you see in places like the NYT . . . and now frequent miler.

Sam

I fully agree with Mommatravler!

Gary

I plan on keeping my account open. I see it as a way to keep points alive with their travel partners. Amex won’t approve me for anything that earns MR points, so Brex is a way for me to earn these points. If they were planning on taking the money and running, I would think that they would be approving every account they could.

mommatraveler

Same here. I moved my points after Nick’s article. I had been procrastinating, so his article gave me a kick up the butt to get moving! I am not closing my account; I think it has some good features and agree that it’s a great way to keep points alive in the FF programs. I also like that ACH/wire transfers are fee-free, and the earning multipliers are decent categories.

Jacob

When I first heard about Brex I was skeptical. I wouldn’t be if it was part of a well-established company like Chase, or CITI, etc but it was not. I was not going to send my money to any financial company that’s legitimacy and financial strength have not been fully vetted. The sign-up bonus sounded too good to be true and made me think that this might be a start-up burning through their funding to get traction. Another wannabe fintech start-up.

Jacques Cukierkorn

The fact that they have over 500 workers only shows that they truly have no idea what they are doing!
I opened a Brex account and had it approved and going extremely fast. Then I tried to open a second account for another LLC I have. They took 3 weeks to approve it. Sent me an email approving the second account. 45 minutes later they sent another email closing the account because I failed to register it in a timely way!!! That is ridiculous. When I wrote Customer care they told me that the account was closed because it didn’t fit the profile of companies they want to serve. My first LLC didn’t either!!!
So I emptied the 100k I had accumulated into my Asia Miles and took my money out.
I will wait and see on Brex, but they lost my trust.

Mike

Just 3 weeks? Nice. i am still not approved on 1st acct since 2/11. P2 was approved same day of application

CEsquire

I bet some lawyer made a call to FM. I do appreciate the warning that Nick sent to all of us, but am sorry he had to do a little backpeddling.

Greg The Frequent Miler

Nope. We haven’t heard from anyone representing Brex. Instead, Nick learned that some of his original info was not correct and that many seemed to have misunderstood the points he intended to make in the original post. He updated that post and wrote this one to try to clear things up.

Valeria smythe

Time to get rid of Nick

Valeria smythe

Backpedaling nick is an expert at, I really don’t see any value he provides

Sam

I wish I can unlike your comment 1000 times!

John Glenn

*spends every day reading the same free book*

*goes to book club meeting*

“I hate this book! The author is an idiot! Nothing he says is true!”

Other book club members: “We had the same problems as the author!”

*keeps reading, repeatedly shouting “I hate this book!”*