Bilt Mastercard® Review

Credit cards have evolved much over the many years I've covered the industry. When Sears launched Discover Card in 1986, it made history as a no-annual-fee card. Cards before Discover typically carried annual fees.

Over the years, consumers have welcomed countless other innovations. Not surprisingly, the card issuers that have evolved by responding to consumer needs have tended to grow at a faster pace than those that haven't.

The innovation continues with a recent product targeting specific consumer needs: CardNamediscontinued (See Rates and Fees). The card seeks to provide relief to consumers affected by such economic challenges as rising inflation and rising consumer debt and it has a unique way of doing it.

CardName hopes to bring card rewards to renters

Rebate programs have surged in popularity over the years, yet have tended to be associated more with consumers with higher incomes. This is due to multiple reasons. One reason, for example, is that card issuers have historically shown more preference to higher income applicants.

Two stats underscore this disparity:

1. An impressive 59% of U.S. adults carry at least one card that offers rewards.
   
2. Yet, according to the same poll, 71% of those with a household income of $100,000 or more state that card rebates are very important to them. Conversely, only 44% of those earning $50,000 or less view rebates as being very important

- poll by GigaPoints/Ipsos

Additionally, according to RubyHome.com, the median household income of U.S. homeowners is $86,000 while the median income of renters is $42,500. Taken together with the credit cardholder income poll numbers, it follows that renters aren't as rewards-card covered as homeowners.

Bilt is hoping to change that.

BONUS TIP!

Don't assume that you can't enjoy card rewards if your credit score is less than stellar. There are a few reward cards for consumers with limited credit.

What makes Bilt unique?

The CardName is billed as the first card that allows cardholders to earn 1X points on rent payments without paying the typical card transaction fees (aka merchant fees) landlords or property management firms typically charge to pay with a credit card. Instead, Bilt covers those fees -- often in the neighborhood of 3% -- for you when you pay your rent with the card through the Bilt app.

Other benefits of the Bilt card that make it unique include:

- When you rent at a Bilt Reward Alliance property, you can choose to have your rent payments automatically reported to the credit bureaus each month, which can help build your credit history (assuming you make on-time payments).

- With BiltProtect you can pay rent without using the available credit on your card. Bilt connects to your bank account and pulls funds directly to pay off any rent charges on your card within 48 hours (similar to a debit card). This prevents you from using up your available credit.

- Redeem your reward points towards next month's rent payment. Bilt is also the first rewards program that allows you to redeem points towards homeownership.

The good news is that even if you don't rent from a Bilt Alliance property, you can still earn reward points. As long as your landlord uses an online payment portal or accepts checks -- pay through the Bilt app and Bilt will send a check on your behalf. You still won't have to pay any transaction fees.

How does the Bilt Rewards program work?

The CardName works with the Bilt Rewards Alliance program, which is a rewards and benefits program for people who rent from properties within the alliance. Even renters without the Bilt card can earn points on their rent payments when they live in one of the alliance member properties.

For those who don't live at an alliance property, or who want to earn more rewards on a wider range of purchases, the CardName is your option.

When you use the card at least five times in a statement cycle, you can earn rewards to the tune of:

• 3x points on dining
• 2x points on travel
• 1x point on other purchases (including your rent payments made through the app)

BONUS TIP!

You can earn double points on the first of each month. That means you'll earn 6X on dining (normally 3X), 4X on travel (normally 2X), and 2X on other purchases excluding rent (normally 1X).

When it comes to redeeming your points, Bilt Rewards transfer at a rate of 1:1 to a number of hotel and airline loyalty programs, including World of Hyatt, IHG, American Airlines AAdvantage, Fly Blue and several others. You can also redeem your points for popular fitness classes or to shop at the Bilt Collection, a curated catalog of art, decor and more.

Potential downsides of the Bilt card

My dad always taught me that if it sounds too good to be true, then it probably is. So, I generally approach new card offers with a critical eye. While I didn't find anything too alarming during my review of the Bilt offer, I would like to give a few words of caution.

Here are a few potential concerns that are worth highlighting:

1) It is certainly a nice perk to be able to pay your rent with a card and earn points, but I caution potential applicants who want to maximize their rewards to consider their overall spending habits.

The big thing that stands out to me is that, while you earn 2X points on travel and 3X points on dining, you only earn 1X points on all other purchases (excluding rent). Furthermore, you have to use your Bilt card at least five times in a statement cycle in order to earn rewards. The Bilt website is quick to point out that their points program is rated highly, but that's subjective and may not be the case for you, especially if you use the card a lot for purchases OTHER than travel and dining.

My bottom line takeaway is that unless you mainly use the card for rent, travel or dining, most consumers would be better served using a 2% cash-back card, such as the CardNamediscontinued (Citi is a CardRatings advertiser). In the interest of full disclosure, I'm not a big fan of points-based reward programs and my card of choice has always been a cash-back card.

That said, if you are an experienced credit card points user and understand the ins and outs of the loyalty programs to which you can transfer Bilt Rewards, you stand to make those rewards worth quite a lot more than the $.01 each they typically are with cash-back cards.

2) The interest rate can be as quite high. Average rates in the credit card market are hovering around 20%, though, so it's not surprising to see higher rates.

"I wouldn't encourage that vast majority of people – and especially those struggling to pay rent – to use this card to pay rent. If there's a high rate on the card, that just puts a renter further in the hole," warns Lynnette Khalfani-Cox, author of the New York Times bestseller "Zero Debt: The Ultimate Guide to Financial Freedom."

3) The card boasts that monthly rent payments are reported to the three major credit bureaus (Experian, Equifax and TransUnion), which can help build or rebuild your credit score. This is a nice perk since rent payments aren't typically reported to the bureaus, at least historically.

However, don't overestimate the value of this Bilt benefit, as more and more landlords are beginning to report rent and there are several services available, both free and paid, if your landlord doesn't report your rent.

"These days there are many ways to build your credit simply by making on-time rent payments and having those payments reported to the credit bureaus," Khalfani-Cox adds. "So, in my opinion, a person really doesn't need to spend money on a credit card, or use their credit card to pay monthly rent, in order to build credit.

"Most rent-reporting services – like Esusu, Jetty, RentReporters and others – require a person to get their landlord to report payments to the credit bureaus. Experian, Equifax and TransUnion all say they'll include rent payment in a person's credit report if that information is received."

BONUS TIP!

Even if your rental property only accepts checks for payment, you can still pay with your card through the Bilt Rewards app and Bilt will send a check on your behalf.

Final thoughts

Rising rent due to inflation is causing financial stress to many consumers who can least afford it. According to the Consumer Financial Protection Bureau, the "nearly one third of renters did not pay or were late with the rent at least once in the last year."

While certainly the Bilt card isn't a full-proof solution for rising rent or inflation (review other inflation busting card tips here), the offer certainly can provide a bit of relief to renters. Granted, earning one point for every dollar spent is not going to make any renter wealthy. However, points do add up over time and it sure beats getting no points for such a large monthly expense!

 ➤  LEARN MORE: Inflation-busting tips your credit card already offers

Perhaps more importantly, I really hope Bilt is successful in increasing the appeal of reward cards beyond just higher income consumers. Truth be told, given our current economic challenges, middle-income households would benefit greatly by earning 1-2% back on everyday purchases... and renters could certainly use a break.

I sincerely hope these insider tips are helpful to you and would love your feedback on your personal experiences with the CardName or other reward programs. Who knows, I may include a tip from you in a future article! Best wishes in using these cards to your financial advantage this year!