Bilt Credit Card: too good to be true?

Bilt Credit Card: too good to be true? It actually is, and it has been way too good to be true. But now we know why. Quick context on how the Bilt credit card works: you use it to pay your rent, you earn one Bilt point per dollar of rent. So if your rent is $2,000, you would earn 24,000 points per year, all with no annual fee. And you get to bypass the typical 3% fee that most rental websites take for paying your rent with a credit card. And yeah, that does sound too good to be true, but now we know why. And that's because Wells Fargo made a bet on the Bilt credit card, that the people that would start using this card would also use it for all their other transactions, hope that you would carry a balance and be in credit card debt, and they would make money on the interest that you're paying Wells Fargo for carrying that balance. And unfortunately, that bet just didn't play out. They're losing as much as $10 million every month on the program as savvy customers flock to the card, according to current and former employees. Executives made internal projections on key revenue drivers, such as the likelihood that cardholders would carry balances, that turned out to be inaccurate. The financial losses triggered a renegotiation of the program that has been under way for months. Wells has told Bilt that it doesn't intend to renew the contract, which is scheduled to end in 2029, unless economics are changed in its favor. A Wells spokeswoman said co-brands are a "modest piece" of the bank's credit-card strategy. "As with all new card launches, it takes multiple years for the initial launch to pay off," the spokeswoman said. "We are committed to continuing to work together to create a win for both Bilt and Wells Fargo." A Bilt spokesman said the Wall Street Journal's reporting "is an inaccurate representation" of the partnership and that the company is committed to a long term partnership that is a win for all parties. The credit-card program had a valuation to $3.1 billion in late 2022. Ken Chenault, the former longtime American Express chief executive officer, joined Bilt's board this year. Wells itself has invested at least $20 million in Bilt. Should you still get the card? I think so. Their current deal doesn't expire until 2029. So, at least for the next five years or so, you can take advantage of this bad deal that Wells made with Bilt, unless they have any renegotiations that change the plans sooner than that.