Is it really loyalty if you’re just paying rent? After all, it isn’t like consumers generally pick where they live based on an affinity for the management company. Still, for millions of Americans rent is the largest monthly expense and one where there are limited rewards options. That changes this week with the launch of Bilt Rewards, a program designed to reward consumers for paying their rent and, potentially, much more.
The ability to earn points for paying rent without additional fees is cool, though at the base level the program value is limited. Members earn a flat rate 250 points per month just for being in the program and paying their rent on time. At that pace the redemption options are limited. Where things really get interesting is with the co-branded MasterCard partnership.
Earning points for paying rent with a credit card
The key to unlocking value in the program is the Bilt MasterCard. Members who pay their rent using the card earn a half point per dollar if they also spend at least $250 on other things using the card in a month. The earning rate increases as members use their Bilt card for other purchases, reaching status milestones in the program. At $1000 spend the earn rate on rent payments increases to 1 point/dollar. At $2000 it hits 1.5 points and at $3500 it reaches 2 points/dollar.
The rent earning caps at 4,000 points/month, so for some higher priced apartments spending extra to increase the multiplier may prove not worthwhile.
To help avoid the risk of sinking into credit card debt to pay rent the card can be configured to pull the payment directly from a checking account. This is not required but when active it also means the rent payment doesn’t hit the available credit line on the card.
A Credit Boost
Bilt’s Director of Loyalty Dave Canty (with a history at JetBlue and IHG, among many others) is, of course, focused on the loyalty aspect of the offering, But he’s also keen on the ability to change the way credit scoring works for renters. By using the Bilt ecosystem the payments will be reported to credit bureaus, allowing tenants to establish and improve their score. As Canty explains, “Our objective is to ensure that the younger generation can build credit to get to home ownership… Bilt allows you to go from first rent to home ownership and everything in between.”
A focus on travel redemption
What can Bilt members do with all the points they’re collecting? The company offers three key redemption options: Travel, Lifestyle, and Rent/Mortgage.
The lifestyle options include gym memberships and home decor offerings. The company plans to rotate the available selections via a curated collections approach, with potential for exclusive products as well.
On the travel front the points can transfer 1:1 to
- American Airlines AAdvantage
- Emirates Skywards
- Air France/KLM Flying Blue
- Turkish Miles & Smiles
- Virgin Atlantic Flying Club
- Hawaiian Airlines HawaiianMiles
- World of Hyatt
The breadth of partners – with the relationships facilitated by Points.com – is impressive, opening up travel opportunities across all three major global alliances plus additional airlines.
Given the potential rate of earning, however, it is not clear that either of these is the ideal choice for members redeeming points. The monthly cap on rent points and potential bonus categories from other cards make this program a good earning option for travel rewards, but not a great one.
It could, however, be a great program for a longer-term focus on home ownership.
The opportunity to convert points into part of a down payment (admittedly, not at a spectacular rate, but still an easy long-term option) is massive. And the company is talking about using the data it collects both to assist in underwriting mortgages down the line, as well as potentially adding rewards for those payments, just like with rent.
Canty understands the value of redemption transactions in driving activity in a program. “I want people to get to redemption. I want them to feel the value in this program. If I can get people to redeem points they’ll want more of it.” Balancing that with the bigger payoff of a home down payment that takes far longer to accrue could be a challenge.
But is it loyalty?
It is a rewards program. Or maybe a points program. And it is a great opportunity for people to earn points on a spend segment that historically didn’t have that option.
But will it truly drive loyalty? Landlords certainly hope that happens, giving them an edge in attracting tenants or securing renewals. I’m a little skeptical, but very, very interested to watch this develop.
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