After a botched roll out of its change in credit card issuers, Bilt seems to have lost a lot of consumer confidence from those in the points hobby.

Bilt 1.0 was a money loser for Wells Fargo

This is probably the most important thing to remember in all of this. Wells Fargo was losing millions of dollars each month under the initial credit card setup.

Bilt’s first credit card issuer was Wells Fargo, and things were humming along well enough. Bilt gained a lot of positive notoriety for introducing an innovative product for people looking to make some extra points off their rent. With rent prices as high as they are across the country, the timing of Bilt’s introduction was beneficial for its growth.

However, the problem when you offer something good is that people will use it exactly for what it’s good for. Bilt likely expected more revolving debt, but those in the points hobby know not to run a balance or it destroys the value of the points. Bilt also expected more people to use the card for other purchases, but there was a heavy weight towards rent.

Those forces combined to drive Wells Fargo out as a partner and made Bilt find a new partner in Cardless. The losses with the old arrangement are the impetus for a change in structure. It should be reasonable to expect some deterioration in benefits to make the card work for a new issuer, right?

Bilt 2.0 has been a complete mess of a launch

The now-confusing nature of earning points on rent

Earning points on rent was simple under the Bilt 1.0 structure. Use your card five times per month and earn 1x point on rent up to $100,000/year. You didn’t need to pay your rent with your credit card (see the problem?)—in fact you can pay it via check with no fees—and you can still earn a lot of points. Just break up a purchase into five swipes and you’re done for the month. Simple, but ripe for abuse.

What’s the process like on Bilt 2.0? At launch, you’d have to accumulate some amount of “Bilt Cash” on purchases other than rent or mortgage (yes, it now includes mortgage payments), then use that Bilt Cash to unlock point earning on rent or mortgage. This comes at a rate of $30 in Bilt Cash to earn 1,000 points on housing. If you don’t use Bilt Cash, you’ll pay a fee. To earn $30 in Bilt Cash, you’ll need to spend $2,000 in non-housing purchases.

So, you move from five simple purchases per month to a whopping $2,000/month to earn a bonus 1,000 points. At that point, it’s not a rent credit card and just a smaller version of a large spending bonus.

…but then the backlash came

Initial public feedback was miserable. Naturally, when the threshold to earn points changes so significantly, the value proposition no longer is there. People gave up on it, wrote it off. The simplicity was gone.

But then Bilt 2.0 changed it after initial public feedback! Maybe we should be calling it 2.1 now?

Bilt heard the comments and introduced another option to earn rewards on rent and mortgage. There’s now a “housing-only” option to earn rewards on rent based on everyday spend. And it all relates back to how big your rent/mortgage bill is.

• Spend 25%-49% of your housing payments each month on other purchases to earn 0.5x points on your housing payment.
• Spend 50%-74% of your housing payments each month on other purchases to earn 0.75x points on your housing payment.
• Spend 75%-99% of your housing payments each month on other purchases to earn 1x points on your housing payment.
• Spend at least 100% of your housing payments each month on other purchases to earn 1.25x points on your housing payment.

Confused yet? It all boils down to what your housing payment is. If you have a large rent or mortgage bill, you’re going to have a heck of a time earning points. Let’s say the most you can realistically spend on the card per month is $3,000. If your rent bill is $3,000, then you’re fine and can earn 3,750 points/month on rent. But if your rent bill is $4,000? Your earnings will fall to 3,000 points/month. Complicated, isn’t it?

On top of that, billing cycles make this kind of weird. What gets compared is your purchases during the same billing cycle that the housing payment takes place.

Bilt Cash wasn’t defined at product launch?

How can you have a core component of your offering be not defined? Well, that’s what Bilt did with its Bilt Cash feature. You see, they said you’ll get 4% in Bilt Cash on top of the Bilt points you earn. But there were no firm details on what you could do with it at launch other than it could vaguely be used on rent and a handful of other things.

• Unlock one-time transfer bonus improvements
• Use Bilt Cash “dollar-for-dollar” in the Bilt network (Lyft, hotel spend, fitness classes, mobile dining, Bilt Collection items, GoPuff deliveries, and more)

Wow, dollar-for-dollar spend for Bilt Cash towards a variety of purchases? That has to make Bilt Cash very valuable! Sure, there were no details beyond that vague description, but it sure sounds useful.

And then came the reality: it’s just yet another coupon book. In a way only Bilt can do it, they made something that all modern credit card holders loathe (a coupon book) and somehow made it worse with more complications. Here’s what it includes (in alphabetical order):

• Bilt Comedy Experiences: $50/month
• Bilt Design Collection: $10/month
• Bilt Dining (at “select” partners): $25/month
• Bilt Dining Experiences: $50/month
• Bilt Home Away from Home benefits: $95 Bilt Cash
• Bilt Neighbourhood Parking: $5/month
• Bilt Travel hotel stays (two-night minimum required): $50/month for Blue/Silver members and $100/month for Gold/Platinum members
• Blacklane: $50/year for Blue/Silver members, $100/year for Gold members, $150/year for Platinum members
• Blade Helicopter bookings ($350 credit per booking, 2 bookings/year)
• Fitness classes through the Bilt App: $40/month
• GoPuff: $5/month
• GrubHub: $10/month
• Housing payment boost (described above)
• Lyft: $10/month
• Points accelerator (extra 1x) on everyday spend for cardholders (costs $200 Bilt Cash, can be activated 5x annually, each activation has a $5,000 spend limit)
• Priority Pass (extra guest credits): $70/month
• Transfer bonus boost (unknown cost in Bilt Cash)
• Walgreens: $10/month

You see, people fill in the blanks with what they want when something is promised without details. Understandably, the lack of expectations makes people upset when the truth is revealed. Most of these options are not going to be helpful for many. The monthly limitations–on top of daily, monthly, and annual limitations on how much Bilt Cash you can use–makes many choices meaningless.

They know those Bilt holders are savvy because they all bought five packs of gum per month to unlock lots of points. And that leads them to introduce so many restrictions to stop someone from taking advantage of their generosity. It’s a way overcorrection to the point where the average user won’t get any material value from most items.

Throw out most of these and just focus on the following:

• Housing payment boost
• Points accelerators
• Transfer bonus boosts

While the Blade Helicopter credit might be useful to some, it’s only relevant if you’re in New York City and only if you earn enough Bilt Cash.

Oh, and Bilt Cash expires at the end of the year except for at most $100 that can be carried over. Don’t use this card during Black Friday unless of course you’re earning enough for your rent benefits. This is a huge letdown for most.

Easy-to-forget limitations on what counts as everyday spend

Lost in the mix of all this everyday spend is actually counts as everyday spend. There are some usual culprits on what doesn’t count, like person-to-person payments. But there are some unique limitations in this card (emphasis mine):

“Eligible Purchases” or “Purchases” means transactions for goods or services made with your Bilt Card, minus returns, refunds, or credits. Purchases that do not earn Bilt Points or Bilt Cash: Balance transfers, Special Transfers, cash advances, travelers checks, money orders, wire transfers or similar cash-like transactions, prepaid cards, gift cards, person-to-person payments (such as Venmo, PayPal, Cash App, or Zelle), tax payments, online resale marketplaces (such as eBay or Facebook Marketplace), cryptocurrency or other digital currency purchases, fees or interest posted to your Account (including annual fees, late fees, and returned payment fees), lottery tickets, casino gaming chips, race track wagers or similar betting transactions, and checks that access your Account

Let’s break these down individually:

• Gift cards. Those of us used to Amex limitations might not be surprised to see gift cards, but Amex’s limitations are just for the sign-up bonus. You’d still earn regular points on those purchases with your credit card. Here, Bilt is more restrictive than Amex. But what happens when you pick up a gift card to give as a gift on your grocery shopping trip? Or is it only at merchants that exclusively sell gift cards?
  
• Tax payments. No one limits earning on tax payments except for Bilt. Their definitions seem to pick up both federal, state, and county payments, including property tax. So if your mortgage includes property tax, you could earn points on property tax. But if it’s carved out, you earn nothing on it. Is paying your tax considered gaming the system? I’d argue no–the bank gets swipe fees for the purchase but they’re not giving you any rewards in return. If anything, this seems unfair by that metric,
  
• Online resale marketplaces. The worst categories are those that are ill-defined, such as this one. They give two examples of what doesn’t earn points (eBay and Facebook). What about the others, like Etsy or Amazon? Surely they can’t exclude Amazon, the largest online e-commerce site, but it is full of re-sellers. And how absurd it is to tack on this restriction in the fine print when no other credit card has a similar restriction? They’re worried about someone buying and selling their own goods in some points scheme but ticking off the majority of users making valid purchases with a hidden “gotcha”. This alone will erode confidence in Bilt.

Those who had Bilt 1.0 were supposed to have an easier move to Bilt 2.0, but…

If you had the original Bilt card from Wells Fargo, you were supposed to migrate over to Bilt 2.0 with Cardless with relative ease. You weren’t supposed to get a credit pull, you had a choice of which of Bilt’s three new cards you want, and your credit limit was meant to stay the same. Except that’s not how it worked for some.

• There were reports that people got credit pulls anyways, which matters more to some people than others
• Credit limits changed (lowered) for some customers
• Some 1.0 customers were outright rejected for Bilt 2.0
• The new card with Cardless counts as another strike in their 5/24 count with Chase

Again, this all stacks up to a loss of trust with Bilt. And with all the negative experience issues associated with this launch, they don’t need another reason to upset people.

So, is that it for Bilt? Not really…

With all this outrage over the Bilt 2.0 launch, they lost some customers, but when the dust settles, the card has a value proposition. But oddly, I think the new cards are best for people who don’t use it for rent or mortgage payments. There are three Bilt cards, and I’ll summarize them succinctly below (links are not sponsored):

• Bilt Blue
  • 1x Bilt points + 4$ Bilt Cash on everyday purchases
  • No annual fee
• Bilt Obsidian
  • 3x Bilt points on dining or grocery (1x elsewhere) + 4% Bilt Cash on everyday purchases
  • $95 annual fee
• Bilt Palladium
  • 2x Bilt points + 4% Bilt Cash on everyday purchases
  • $200 Bilt Cash annually
  • $495 annual fee

All have features that will make earning on housing payments possible. When you make housing payments, you have a lot of things to worry about (having enough Bilt Cash to cover the fees or the ratio of your everyday spend to your housing payments).

But I think the cards are better for those who don’t worry about rent.

The Bilt Obsidian is better than the competition for grocery stores

Look, everyone has the American Express Gold card not for the coupon book experience but for the 4x earning at grocery stores. But that card now has a $350 annual fee. It’s an absurdly-priced midrange card that’s now creeping into expensive territory. Wouldn’t it be nice to have an alternative?

That’s where the Bilt Obsidian comes in with its $95 annual fee. You can earn 3x points right off the bat with the card, which is fine enough on its own. But you can also boost points earning by an extra 1x to make it 4x by spending $200 in Bilt Cash, and you can do that 5 times a year.

Whether you like the Amex transfer partners (like ANA or Singapore) or Bilt transfer partners (like Alaska, JAL, or Hyatt) more is a personal decision. But the cheaper annual fee is nice to have, pending if you can earn points off gift cards at grocery stores of course.

The Palladium card is great for everyday spend

Everyone has a 2x card (well, except for Chase, which has a 1.5x card). But what Bilt did is create an avenue to making a 3x card. You can somewhat think of it as a 3x card for the first $25k in spend per year and a 2x card elsewhere. And if you think of it that way, it was a lot of purchasing power in your collection.

Sure, it won’t work for tax payments, so just keep that in mind.

Yes, it seems strange that Bilt’s new cards seem better for those not caring about housing. The 1.0 card was meant for renters. But the 2.0 cards? They honestly now seem meant for everyone else. Stop thinking of this as a card for housing and just use it for its non-housing features. You’ll be a lot happier.

Suggested reading:

• Rakuten is a Great Points Generator (Now Including Bilt)
• Everyone Gets Free Point.Me And You Might Not Know It
• Uh Oh: Transferable Points Currency Mesa Shuts Down