Rent is the biggest expense every month for a lot of people, but in most cases it doesn’t help you build credit. If a landlord accepts a credit card, they’ll normally charge you a fee as well.
A new Bilt credit card will allow you to pay your rent free of charge and allow you to accumulate rewards in the process. This includes converting points into cash to be used for a down payment on a house.
âI like the idea of ââsaving for home ownership. I just think it’s a bit of a gimmick to do it with a credit card, especially if there are tradeoffs, there is deferred gratification, there is the likelihood of sacrificing rewards in others. areas. There are enough fine print and caps that I think most people better keep it simple, get that 2% no annual fee cash back card and maybe put those rewards in your fund. down payment if you wish, âsaid Ted Rossman, senior industry analyst at CreditCards.com.
The fine print Rossman talks about is how much you have to spend to get the colon per dollar of rent. There is also the risk of putting the rent on a credit card.
âCredit card rates are often very high, averaging 16%. It would be a last resort for me. Now if you want to earn rewards I understand if you are able to foot the bill and fall before the interest hits and then get rewards. I think it’s attractive, but it can be a slippery slope, âRossman said.
Bilt tries to avoid debt problems by turning off rent payments when the person doesn’t have enough money in their bank account linked to the card.
The company said it will let renters pay through the Bilt rewards app. And then a check will be sent to their owner on their behalf if the owner has not signed for it.
Still, Rossman warns that you could earn higher cash rewards on other cards and then just save that money.