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Big city landlords are planning to use more carrot and less stick to motivate their renters. Local property developers including The Moinian Group, Related, Avalon and Equity Residential have become part of a $60 million round of investment in Bilt Rewards — a new credit card linked to rental payments.
The new program offers rewards points for rental payments and claims to help renters become homeowners. Cardholders receive a point for every dollar spent on rent, double points on travel and triple points on dining — providing the card is used at least 5 times per month.
Paying your New York rent with a credit card typically comes with large processing fees (up to 3%) and the risk of carrying debt and accruing significant interest. Bilt offers a Mastercard with no annual fee that’s designed to remove those barriers. By partnering with participating landlords, Bilt is able to offer users feeless transactions. The credit card will charge interest on any non-rent payments that carry over month to month and they require that rent be paid in full each billing cycle.
“Rent is the single biggest expense for most of us and, up until now, the only expense that you can never get anything back on,” Bilt CEO Ankur Jain told Crain’s.
One point is earned for every dollar spent. The more points you earn per year, the more benefits you can unlock. For example, once you’ve accrued 25,000 points you become a Silver-tier member and start earning interest on your unused rewards in the form of more points. 50,000 points will get you access to a “homebuyer concierge service” that guides members through the process of transferring their points to mortgage payments. There are also incentives to keep renting. Depending on your status, you can earn up to 50% bonus points for signing a new lease or a lease renewal. Members can also use the points they earn to pay for fitness classes at SoulCycle and Rumble.
For now, Jain hasn’t confirmed how many customers are using Bilt but Crain’s reported that there are 2 million renters in Bilt’s current landlord network and there is a waitlist to sign up for the card.
“It will be interesting to see how Bilt evolves,” credit industry analyst Ted Rossman told Crain’s. “For now, I think they’re targeting the HENRY (high earners, not rich yet) space — basically young adults who are renting, traveling, eating out, and establishing their credit.”