Bilt Responds to Backlash, Adds Second Option for Earning Rewards on Housing Payments With No Fees

In case you didn’t hear, Bilt announced sweeping changes to its platform this week, including an entirely new lineup of credit cards, changes to how points are earned, and a new rewards currency, Bilt Cash.

However, things didn’t quite go according to plan. Backlash was swift and severe, with thousands of people taking to the internet to voice their frustrations with the new program.

While some could see genuine value in the way Bilt 2.0 is structured, the overwhelming majority of current Bilt customers felt that the new program was far too confusing and required too much spending as a proportion of a given person’s rent or mortgage payment to continue to earn points on housing costs without paying a fee.

Bilt 2.0 was officially unveiled on Wednesday, January 14. And today, January 16, the company’s CEO, Ankur Jain, sent an email to Bilt members with a mea culpa and details of further program changes, in an attempt to assuage the concerns that have reverberated across the credit card industry this week.

Will it be enough? Let’s take a look.

The Bilt 2.0 Controversy, Explained

In response to withering online backlash, Bilt 2.0 is receiving tweaks just 2 days after its announcement.

But what was the backlash all about, anyway?

The central (though not the only) controversy of Bilt 2.0, as it’s known, hinged on the claim of “fee-free” rent or mortgage payments and the introduction of a new rewards currency, Bilt Cash.

In the Bilt 2.0 program, as initially announced, the ability to earn points on rent depends entirely on a cardholder’s ability — or willingness — to spend enough on non-housing purchases using a Bilt credit card to unlock 1x points on a rent or mortgage payment.

All new Bilt Rewards credit cards earn 4% back in the form of Bilt Cash on all non-housing spending. As such, the math works out to this: Cardholders need to spend at least 75% of their rent or mortgage payment each month on non-housing purchases with their Bilt card to unlock the ability to earn 1x points on their rent or mortgage payment.

However, if you don’t charge enough non-housing spend to your Bilt credit card to meet or exceed that threshold, you’ll only earn points on the portion of your payment that can be covered by the Bilt Cash you’ve earned — and none on the rest of your payment.

Alternatively, if you want to earn 1x points on your whole mortgage or rent payment, you can elect to pay a 3% fee to enable points earning on the full amount of the transaction.

So, technically, no, you won’t be charged a fee to pay your rent or mortgage with a Bilt card. However, if you charge your housing payment to your card and don’t use the card for other purchases to earn Bilt Cash, you would forgo the ability to earn any points at all on that transaction. That was the foundational principle of Bilt at launch. That shift wasn’t lost on customers.

If you want to earn those points that you’ve grown accustomed to earning under the Bilt 1.0 program (which, famously, requires 5 total transactions on the card each month to unlock points earning), you’ll have to fork over a 3% fee on your housing payment.

Predictably, existing Bilt Rewards members were left confused after hours of back-of-the-napkin calculations and value comparisons to determine whether having a Bilt card at all was the right move for them going forward. Some decided it still fit well with their spending profile, while others decided to move on from the company entirely, feeling it was being disingenuous about its claim to fee-free housing payments. And everyone heard about it.

Instead of Walking Back Changes, Bilt Adds a Parallel Program

In response to the tidal wave of criticism of Bilt 2.0, the company has decided to add what’s effectively a parallel program. The idea is that Bilt members can interact with it however they think works best for them.

A note from Bilt CEO Ankur Jain outlines an entirely new option for earning Bilt points on housing payments, in addition to maintaining the original Bilt 2.0 system as announced on Wednesday.

And you thought the Marriott/SPG merger was confusing? Anyway … what’s new in the latest round of updates to the Bilt program?

Jain explained in his note to Bilt members today that the company received plenty of feedback after launching Bilt 2.0 on Wednesday and that the company hears its members’ frustrations. He also explained a truth that all of us accept: Bilt’s current model is not profitable, as cardholders could charge their rent and 5 other transactions of any amount (yes, even a penny), and earn 1x points per dollar spent on their housing payment. And many cardholders did exactly that, electing to put the majority of their daily spending on other, more rewarding cards.

The new, parallel program announced today is an attempt to bring the Bilt 2.0 program (at least this new offshoot of it) closer to its founding principle of fee-free housing payments while acknowledging that it needs to make money from its customers.

Now, Bilt members can choose how they want to earn rewards on housing payments, including a new option to earn up to 1.25x in rewards on those transactions.

Here’s how the new system works: Members can pay their rent or mortgage each month with a Bilt credit card, with no fee, and choose to earn rewards instead of Bilt Cash. However, the amount of rewards earned depends on how much is spent on non-housing purchases each month with a Bilt credit card.

The following breakdown is based on a housing payment of $2,000 monthly:

The Bilt mobile app will track your progress toward each earning tier each month, and if you don’t meet the minimum spending threshold for non-housing transactions, you’ll receive just 250 Bilt points — a carryover from the current system.

Remember, too, that the Bilt 2.0 program, as announced on Wednesday, remains entirely intact, and there have been no changes to any of the new credit card products unveiled earlier this week. If you think that version of the program serves you better, you’ll still be able to interact with it that way. And, you can change between the 2 systems at any time. Your change will take effect the following month.

This new setup better fulfills the promise of no fees on housing payments. However, it’s still a significant downgrade from the current system, which was easy to understand and allowed members to earn full 1x points on housing payments in a very straightforward manner.

If you’ve enjoyed interacting with Bilt over the years thanks to its simplicity, this new option more closely resembles what we’ve grown accustomed to, though you will earn significantly fewer points if you put most of your daily spending on another credit card.

On the other hand, adding what’s essentially an entirely new program to the already complex Bilt 2.0 platform may be seen as just another layer of confusion. However, as Jain notes in his letter, “[T]here have been record applications for the [new] cards,” so clearly there’s interest in whatever Bilt decides to do.

Final Thoughts

It’s great to see that Bilt is listening and acting quickly to allay its members’ concerns. There’s no doubt the new credit card products are alluring, providing solid earning potential and even welcome bonus offers that were never part of the original card.

However, time will tell whether frustrated customers will return to Bilt after it adds yet another layer to an already complicated program — a program the New York Times described as “the most complicated rewards system we’ve seen.”

The good news is that those who don’t want to bother learning the new Bilt Cash system but still want to earn at least some rewards on their housing payments — and do so without moving significant portions of their daily spend into the Bilt ecosystem — now have the option to do so.