Held July 30-August at Inman Connect Las Vegas. On January 1, 2024, the noise and misinformation will be cut away, all your big questions will be answered, and new business opportunities will be revealed. join us.
Consumers who use rewards cards wisely may believe they are beating the system. In the case of the Bilt MasterCard — which allows renters to avoid convenience fees and earn bonus points when charging rent through the card — they may be right.
Wells Fargo, which issues and manages the Bilt MasterCard, is losing up to $10 million a month from its partnership with Bilt Technologies Inc. wall street journal Report.
The Bilt Mastercard is popular with renters and landlords, who faced a 2% to 3% exchange fee when paying rent with a credit card before the card was launched.
Bilt investor Wells Fargo launched a co-branded Bilt Mastercard in 2022 that “covers most of the costs” so tenants (or landlords) don’t have to shoulder the costs. Magazine Sunday Scoop reports.
According to current and former Wells Fargo employees who spoke to The Wall Street Journal, the bank believes it may cancel renters if they also use the card for other purchases and if more than half of them have a balance on the card. partnership.
Wells Fargo also hopes it will be well-positioned to offer mortgages to Bilt Mastercard users when they are ready to make the leap to homeownership. Magazine reported.
Instead, only 15% to 25% of card fees are applied to monthly balances that earn interest, and the program has not boosted Wells Fargo’s mortgage business. Magazine Sunday Scoop reports.
In a statement provided to Inman, Bildt described wall street journal The article said it “inaccurately stated” its strategic partnership with Wells Fargo.
“Following the successful launch of our co-branded card in 2022, we have been impressed by the early traction and growth and are committed to a long-term partnership with Wells Fargo that will benefit all parties,” said Bilt. The most important thing is our customers.
Wells Fargo said in a statement that co-branded credit cards are “just a small part of the company’s overall credit card business strategy” and that such ventures can take “many years” to pay off after initial launch.
For example, when JPMorgan Chase launched its Sapphire Reserve credit card in 2016, the card reduced the bank’s fourth-quarter profits by $200 million to $300 million. Bloomberg reported at the time.
“While the Bilt Card is still small, it provides an innovative and unique rewards platform that allows us to reach new, younger customers,” Wells Fargo said.
this Magazine Losses at co-branded Bilt Mastercard have triggered renegotiations of the partnership, which is scheduled to end in 2029 – with Wells Fargo reportedly unwilling to renew unless it gets better terms.
Wells Fargo said in a statement to Inman that “there have been no conversations among policymakers about exiting the Bilt Agreement.” “Recommendations to do otherwise would be wrong.”
Expansion of mortgage incentives
When Bilt announced a $200 million funding round in January that valued the company at $3.1 billion, it revealed it also planned to get into mortgage payment incentives.
Rocket Companies is already exploring this space, launching the Rocket Visa Signature card last year to reward existing Rocket Mortgage borrowers and incentivize first-time homebuyers to choose Rocket when financing their home.
If they have paid off a home loan with Rocket Mortgage, rewards card customers can receive the equivalent of 2% in cash back when they redeem points to pay off their mortgage balance. Having a mortgage serviced by Rocket also allows them to avoid paying the card’s $95 annual fee.
When homebuyers finance with Rocket Mortgage, they can redeem points for down payments and closing costs of up to $8,000, earning a cash back equivalent to 5%.
This is part of Rocket Companies’ strategy to grow its business by unlocking customer lifetime value by providing personal financial services through its subsidiary Rocket Money.
Bilt announced the launch in June 2021 of the Bilt Rewards Alliance, the first component of its loyalty program and payments platform.
Bilt Rewards Alliance is a growing network of rental owners and operators managing more than 4 million apartments, including AvalonBay, Berkshire Residential, Brookfield, Cushman & Wakefield, Greystar and Invitation Homes.
Tenants living in Bilt Rewards Alliance properties can pay rent through the Bilt app, earn rent points with no transaction fees, and build their credit history by signing up for Bilt’s free rent reporting service with credit bureaus.
For tenants living in properties that are not part of the Bilt Rewards Alliance, the co-branded Bilt Mastercard allows tenants in any apartment in the U.S. to earn points on rent without paying transaction fees and on dining, travel and other purchases.
Last month, Bildt announced an expansion of its rewards program, allowing condo and co-op residents to earn bonus points when they pay their monthly homeowners association fees.
Douglas Elliman Property Management, which manages a portfolio of more than 40,000 units in nearly 400 buildings in New York City, is the first major apartment and co-op property management company to join the Bilt Rewards Alliance.
“Our partnership with Douglas Elliman is the first step in expanding Bilt Rewards beyond renters,” Bilt Chief Commercial Officer David Wyler said in a statement.
Get Inman’s mortgage newsletter delivered straight to your inbox. A weekly digest of all the biggest news in mortgages and settlements around the world is published every Wednesday. Click here to subscribe.
Email Matt Carter
