Rent is the single biggest expense every month for a lot of people, but in most cases, it's not helping you build credit. If a landlord does accept a credit card, they'll normally have you pay a fee as well.
A new credit card from Bilt will let you pay your rent without a fee and allow you to accumulate rewards in the process. That includes converting the points into cash to use for a down payment on a house.
“I love the idea of saving up for homeownership. I just think it's a little gimmicky to do it with a credit card, especially if there are tradeoffs, that there's delayed gratification, there's the likelihood of sacrificing rewards in other areas. There's enough fine print and caps that I think most people would be better off just keeping it simple, get that 2% no annual fee cashback card and maybe stash those rewards towards your down payment fund if you're so inclined,” said Ted Rossman, Senior Industry Analyst at CreditCards.com.
That fine print Rossman is talking about is how much you have to spend to get the full two points per dollar on rent. There's also the risk of putting rent on a credit card.
“Credit card rates are often very high, the average of 16%. That to me would be a last resort. Now, if you want to earn rewards, that I understand if you're able to pay the bill and fall before interest hits and then get rewards. I think that is appealing, but that can be a slippery slope,” said Rossman.
Bilt is trying to prevent debt issues by disabling rent payments when the person doesn't have enough cash in their bank account linked to the card.
The company says it will let renters pay through the Bilt rewards app. And then a check will be sent to their landlord on their behalf if their landlord hasn't signed up for this.
Still, Rossman warns you might be able to earn higher cash rewards on other cards and then just save that money.