New Credit Card Lets You Turn Points Into Next Month’s Rent

Credit card companies have offered all kinds of rewards over the years: airmiles, Starbucks, even magician’s equipment for the supernaturally gifted among us. But how about a path to home ownership?

That’s what real estate startup Bilt Technologies is promoting with its new credit card alongside Mastercard. Cardholders will earn rewards points whenever they pay rent, which can be put towards future rental payments or even a down payment on a place of their own.

The Fine Print

Credit cards aren’t a novelty in the rental game, but rent-payers often get smacked with processing fees of up to 3%. Bilt’s card will liberate tenants and landlords of those fees, and if a landlord doesn’t accept credit cards, no problem—the company will mail them a paper check and charge the renter’s card at no fee.

But as with any credit card offer, there’s a thick envelope’s worth of fine print:

• A cardholder would need to rack up a ton of charges to collect enough points for even a fraction of a down payment. $1,500 in rent every month for a decade would amass enough points for just a $6,000 down payment—less than a third of the $18,700 median downpayment for a U.S. home in Q1 of 2021.
• And many financial advisors caution against using credit cards to pay rent, since high interest rates can bury users in a debt trap. Bilt’s card will have an average annual rate between 15% and 22.5%. (According to the Fed, the 2020 average rate was 16%.)

Bilt cardholders will have a month to pay off overdue rent before accruing interest, and high-risk users will be automatically blocked from making rent payments if their account has insufficient funds.

Landlord’s Market: The U.S. median asking rent grew 1.1% year-over-year in March to $1,463. And investors don’t see that trend reversing. Blackstone Group, for one, signed a $6 billion deal Tuesday to acquire Home Partners of America, which owns and rents some 17,000 single-family homes.