I recently published an analysis of the new Bilt 2.0, and how I felt that the whole reason to pursue Bilt disappeared with the changes that were made. Briefly, whereas Bilt was rather a no-brainer in order to easily earn points on your rent, with Bilt 2.0 there isn’t a good reason to pursue that anymore for most of us. Well, it seems a lot of the internet had similar thoughts, to the point where Bilt is backtracking somewhat. Let’s have a look at the new changes that were made to Bilt 2.0…

1. Quick recap: what changes in Bilt 2.0, and what makes that so negative?
2. Here’s the newest change, following the criticism
3. This changes the value propostion of Bilt 2.0 for the better
4. Summary

Quick recap: what changes in Bilt 2.0, and what makes that so negative?

What exactly was the big problem with Bilt 2.0? It’s not about the new credit cards or their individual value proposition. Instead, it’s about the way you’d earn points from rent. In effect, in the Bilt 2.0 system, you’d not really earn points from rent. Instead, every non-rent purchase would provide you a 4% return on ‘Bilt Cash’. This Bilt cash can then be redeemed against rent charged to your account, at a rate of $3 Bilt Cash for 100 Bilt points. Practically, this means that you’d need to spend 75% of the dollar value of your rent on non-rent purchases in order to earn a 1x points rate on your rent. For exmaple, if your rent is $2000 per month, you’d need to spend $1500 on non-rent purchases to earn 1x points on the rent. Otherwise, the earning ratye would be below 1x.

The real issue here is that, unfortunately, none of the Bilt cards have compelling enough earning categories that would justify putting that kind of spend on the Bilt cards instead of other cards you may already have. It means that there is a potentially massive opportunity cost to spending with Bilt: you’d probably earn more points overall by spending on other cards, so that using Bilt just isn’t really worth the effort.

Here’s the newest change, following the criticism

Well, it seems that the CEO of Bilt has listened to all the comments, and in particular the criticism that this model has received. So, a few days later he published an ’email’, announcing that besides the Bilt Cash earning system, a second, simpler system would be made available. See below his announcement:

Over the past few days, I’ve spent a lot of time reading our members’ emails, DMs, and notes. Many were thoughtful and passionate. Some were frustrated. All were fair.

I feel incredibly lucky to lead a company with members who care this deeply.

On one hand, there have been record applications for the cards, and I’m excited for members to get them. However, I’ve also seen real and reasonable confusion about the new value proposition—especially around rent and mortgage points. That’s on me, and we’re fixing it.

Let me be clear and upfront: Bilt cardholders will never be charged a fee to earn rewards on housing payments.

There’s also an important reality behind how we deliver the richest rewards possible. The more members use the card for everyday spend, the more unique value we can sustainably provide across the Bilt ecosystem. It is probably not a surprise to any of you, but if members only purchase four bananas and earn free rent points, it doesn’t allow us to sustain such a rich value proposition for everyone.

With all that in mind, we are introducing a new, simpler option to earn fee-free rewards on rent and mortgage: now up to 1.25X on each payment.

You will now be able to choose one of the two options for how you want to be rewarded on housing payments with the new Bilt Card 2.0. The core benefits of each card are not changing. This is only an update to how you earn rewards on housing payments.

Option 1:

A simple, fee-free way to earn rewards on housing.

• Pay your full rent or mortgage every month with no transaction fee
• Earn points on housing automatically in lieu of earning Bilt Cash
• While everyday spend will not earn Bilt Cash*, you will still get your annual or welcome Bilt Cash credits with the card
• The more you use your card for everyday spend, the higher your points multiplier on housing, now up to 1.25x:

Points on Housing	Minimum everyday spend as a % of monthly rent / mortgage (Example of $2,000 rent)
0.5x points	Spend at least 25% of monthly rent ($500)
0.75x points	Spend at least 50% of monthly rent ($1,000)
1x points	Spend at least 75% of monthly rent ($1,500)
1.25x points	Spend the same or more as your monthly rent ($2,000)

You’ll see your progress to each tier clearly in the app each month.

Just like today, if you don’t hit the minimum spend requirement, you still earn 250 points per month. Bilt Card 2.0 also removes the 100,000 rent point cap that existed with Card 1.0, so you can now earn unlimited points on housing payments.

Option 2:

If you prefer the original, fee-free structure we launched Card 2.0 with, it’s still available for you:

• Earn 4% back in Bilt Cash on everyday purchases, in addition to base points. Think of Bilt Cash as “choose your own reward”.
• Pay your full rent or mortgage every month with no transaction fee
• You can use as little or as much of your Bilt Cash to increase the total points you earn on housing that month and you do not ever pay anything out of pocket.
• You can also redeem Bilt Cash dollar-for-dollar for monthly credits across the Bilt ecosystem (with monthly, merchant-specific caps), or for exclusive benefits like higher transfer bonuses and special access to experiences.

The more you use your card for everyday spend, the more Bilt Cash you earn. We’ll continue adding new ways to spend Bilt Cash as the ecosystem grows.

You choose the option that works the best for you when you activate your card. You can change at any time, and your choice will take effect the following month. And, both options come with the same rich everyday point earnings and premium card benefits you saw at Card 2.0 launch.

We move fast at Bilt. That means we won’t always get everything right the first time, but I read all of your feedback and we will adjust quickly when we miss. I know that for some of you, no explanation of change will fully replace what you loved about the card 1.0 model–I understand that. At the same time, I’m genuinely excited about what this model sustainably enables going forward: giving you the richest rewards on rent, mortgages and everything else.

I’ve also included an FAQ below to answer some of the other questions I’ve been hearing.

We’re grateful to keep building this with you. Thank you for being a Bilt Member.

Ankur

So to be clear: Bilt Cash will not be the only way to earn points for rent. With the second option, you can now go back to earning a certain amount of points directly from the rent that was charged to your account. However, you’d still need to put a non-rent spending on your Bilt in order to get any points from that. However, the spending can now potentially be more lucrative as the barrier for it is lower:

• Not only will you start earning 0.5x points when only spending 25% of the rent on non-rent purchases…
• …but you can now receive more than 1x points: now you can get up to 1.25x, which is more than what was possible under the old model. However, this does need a spend of 100% of the dollar value of the rent on non-rent purchases.

I think this is a pretty big departure from the original Bilt Cash system. It’s interesting that you’d be able to switch between these system every month, depending on what you anticipate your spending patterns to be.

This changes the value propostion of Bilt 2.0 for the better

I think with the added option to earn points on rent through Bilt other then the Bilt Cash system, I think Bilt 2.0 has a more straightforward value for most people. Getting 0.5x points at a spend of 25% the rent is not so bad. Let’s look at an example:

• With a rent of $2000, 25% spend represents $500.
• If you’d use the Palladium card, which is the Bilt 2.0 card that we chose to transition to and the one I recommend you to pick, you get 2x on all non-rent purchases.
• If you now strategically shift spending in categories that you’d otherwise get 1-2x points on to the Palladium card, you can probably pull together that $500 worth of non-rent spending without an opportunity cost.
• You’d receive 1000 Bilt points from that $500, and another 1000 point at 0.5x the rate on the rent, for 2000 points total.

It’s critical that you don’t shift spending from categories that would earn you more than 2x with other cards you may have, or that opportunity cost would likely end up being too great. then, you may end up actually getting less points from Bilt than you may get through other cards. This is why I think the 25% mark is important, because I think this is a realistic amount of money the average person can spend on a category that would otherwise earn 1-2x points.

What might categories be that you could spend on with Bilt without an opportunity cost? It depends entirely on what cards you have, but for many of us, cards like the Chase Sapphire cards, Amex Gold or Platinum, Chase Freedom family etc, do not cover purchases at large retail shops, hardware stores, for products such as clothing. On the other hand, categories that frequently are bonused at 3x and more are dining, travel and entertainment. So you wouldn’t want to put spending in these categories on your Bilt cards.

Summary

I originally covered the Bilt 2.0 cards and points-earning system on rent, and was quite negative about its value proposition. It seems I wasn’t alone in that opinion, and Bilt came out with a change to the original system. Now, you will be able to earn points directly from rent again. You will still ned to put a certain amount of non-rent spending on your Bilt card to become eligible, but the good news is that you can start earning 0.5x points when spending 25% of the dollar value of your rent on non-rent purchases. With this, I think Bilt may continue to be a good option for earning points on rent, but only if you have enough purchases in 1-2x points earning categories that could potentially be shifted to Bilt. If not, the opportunity cost could become to great again.