Is it really loyalty if you only pay the rent? After all, it’s not as if consumers typically choose where to live based on their affinity for the management company. Yet for millions of Americans, rent is the single most important monthly expense and one for which rewards options are limited. 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 possibility of earning points by paying rent at no additional cost is attractive, although at the basic level the value of the program is limited. Members earn a lump sum of 250 points per month just for participating in the program and paying their rent on time. At this rate, redemption options are limited. Where things get really interesting is with the co-branded MasterCard partnership.
Earn points by paying rent with a credit card
The key to unlocking the value in the program is the Bilt MasterCard. Members who pay their rent with the card earn half a point per dollar if they also spend at least $ 250 on other things with 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 $ 1,000, the earning rate on rent payments drops to 1 point / dollar. At $ 2,000 it reaches 1.5 points and at $ 3,500 it reaches 2 points / dollar.
Rental income capped at 4000 points / month, so for some more expensive apartments, spending extra to increase the multiplier may be unnecessary.
To avoid the risk of going into debt with a credit card to pay the rent, the card can be configured to withdraw payment directly from a checking account. This is not required, but when activated it also means that the rent payment does not reach the available credit line on the card.
A credit increase
Bilt Loyalty Director Dave Canty (with a history at JetBlue and IHG, among others) is, of course, focused on the loyalty aspect of the offering, but he’s also keen on the possibility of changing the way credit scoring works for tenants. Using the Bilt ecosystem, payments will be reported to credit bureaus, allowing tenants to establish and improve their score. As Canty explains, “Our goal is to ensure that the younger generation can build up credit for homeownership… Bilt takes you from first rent to homeownership and everything in between. “
A focus on travel redemption
What can Bilt members do with all the points they collect? The company offers three key repayment options: Travel, Lifestyle, and Rent / Mortgage.
Lifestyle options include gym memberships and home decor offerings. The company plans to rotate the available selections through an organized collections approach, with potential for exclusive products as well.
Travel wise, points can transfer 1: 1 to
- American Airlines AAdvantage
- Emirates Skywards
- Air France / KLM Flying Blue
- Turkish miles and smiles
- Virgin Atlantic Flying Club
- Hawaiian Airlines
- The world of Hyatt
The range of partners – with the relationships facilitated by Points.com – is impressive, opening up travel opportunities across the three major global alliances as well as additional airlines.
Considering the potential winning rate, however, it’s unclear whether either is the ideal choice for members redeeming points. The monthly rental point cap and potential bonus categories of other cards make this program a good earning option for travel rewards, but not a great one.
It could, however, be a great program to focus on long-term homeownership.
The ability to convert points into part of a down payment (admittedly not at a dramatic rate, but still an easy option in the long run) is huge. And the company is talking about using the data it collects both to help underwrite mortgages down the line, as well as potentially adding rewards for those payments, just like rent.
Canty understands the value of trading transactions in the conduct of activity in a program. “I want people to achieve redemption. I want them to feel the value of this program. If I can get people to redeem points, they’ll want more. Balancing that with the larger gain from a down payment on the house which takes a lot longer to accumulate could be a challenge.
But is it loyalty?
It’s a rewards program. Or maybe a points program. And it’s a great opportunity for people to earn points on a spending segment that historically didn’t have that option.
But will it really build loyalty? Landlords are certainly hoping that this will happen, which will give them an edge in attracting tenants or securing renewals. I’m a little skeptical, but very, very interested in seeing this evolve.
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