Wells Fargo’s ‘Rewards for Rent’ Card Shows Further Evolution of Points as Currency

The macro headwinds mount as inflation pushes all manner of expenses tied to daily life higher.

That includes rental payments, which have been soaring double-digit percentage points in the United States, as measured year over year.

For many individuals and families, juggling finances and keeping the roof over one’s head in place is becoming an increasingly daunting task.

To that end, a credit card on debut from Wells Fargo will let consumers earn rewards tied to timely rent payments.

The banking giant is working in tandem with Bilt Rewards to let cardholders earn points, without transaction fees on any rental property in the U.S., according to a Monday (March 28) press release.

The linking of rewards, cards and rental programs comes as we are seeing a continuous move by loyalty programs to be flexible, certainly in terms of spending the rewards. Call it a form of rewards ubiquity, or liquidity.

The rewards with Wells Fargo acting as issuer for the Bilt Mastercard, “can be redeemed toward travel around the world, access to their favorite fitness classes, and even credit toward a down payment on a home,” the release stated.

Tackling a Significant Expense

The companies also noted in the release that rent is among the single largest expense for the “vast majority” of renters.

In terms of the mechanics of the card, as tied to rent, holders earn 1x points on rent, up to 50,000 points annually. The rental payments themselves will come from a linked bank account (and not a credit line that is drawn down at the bank).

Bilt Rewards said it will also be the first program to let members redeem points toward a down payment on a home through Fannie Mae and the Federal Housing Administration. Bilt, in turn, works with a range of property members, including AvalonBay and Cushman & Wakefield. For landlords that do not accept credit cards, Bilt will send checks to landlords.

The joint efforts between Bilt and Wells Fargo come, as Mastercard is introducing two new payment solutions to lower risks while improving costs. The new smart payment decisioning tools — Payment Success Indicator and Payment Routing Optimizer — are part of Finicity’s open banking suite of services. The Payment Success Indicator uses permissioned real-time account information to enable the payment originator to access a person’s balance and history for every transaction.

Read more: Mastercard Rolls out New Payment Tools to Reduce Friction

Among the first FinTech partners that will be using the Payment Success Indicator will be Bilt Rewards Alliance, which has 2 million rental homes nationwide.

Beyond the flexibility of the points-for-rent model, it’s important to note, too, that the linking of the cards to a bank account — rather than acting as a traditional revolving line of credit — can help do a few things. It ostensibly prevents them from becoming too over-leveraged, spending funds on hand, rather than money they do not have.

Recall that about 64% of the population lives paycheck to paycheck, as PYMNTS data found recently. As the points accrue, they can help offset other expenses (say, on travel) down the line.

See more: Nearly Half of High-Income Earners Now Live Paycheck to Paycheck

But it’s also the case that more lenders are taking rental payments into account, which can boost credit scores as those timely payments are reported to bureaus such as Equifax. The positive ripple effects of having points tied to new avenues of spending may accumulate across the economy at large.