Wells Fargo unveils credit card that rewards rent payments

Wells Fargo says its new credit card is the first to allow the country’s 109 million tenants to pay their landlords every month while earning points and miles.

Wells has partnered with Bilt Rewards with a Mastercard that can be used to make payments on any rental property in the U.S. without incurring transaction fees, the San Francisco-based lender said Monday. Buildings that do not accept credit or digital card payments will receive a check after the cardholder uses the Bilt app to pay the rent.

Bilt is a tenant loyalty program started last year by a group of large property managers and landlords, including Blackstone and Camden, Cushman & Wakefield, who oversee more than 2 million apartment units. Card rental payments would come from a linked bank account.

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“It’s a no-commission card that allows anyone to pay their rent without a transaction fee, so that’s important,” Ted Rossman of CreditCards.com told CBS MoneyWatch. “This card has an interest rate and you can bring a balance, but not for rent.”

According to the bank, Wells Fargo card users receive one point for every dollar spent on rent, as well as rewards for other purchases. Points can be exchanged with partners, including airlines and hotel chains, or they can be applied to a down payment when buying a home with a mortgage from Fannie Mae or the Federal Housing Administration.

“Wells Fargo can now help tenants with the card take on their biggest expense and make it a rewarding experience, including helping them build a path to home ownership,” said Dan Dougherty. executive vice president of Wells, head of associations and branch cards, to a statement.

The card makes sense for people who spend $ 3,000 or $ 4,000 a month on rent, as it could generate up to $ 750 a year for a future down payment, Rossman said. “Renting is the key differentiator: eating and traveling, which you can do with other cards,” he said.

The average income in the US reached one record high of $ 1,792 last month, according to Realtor.com: a jump of 17% over the previous year and the tenth consecutive month rents had increased in double digits. In 14 U.S. cities, typical rent is no longer affordable, far exceeding the 30% of income recommended by personal finance experts.

Rossman said there could be hiccups for some, as many small homeowners expect checks on their doors each month, and that a third party payer could add "a little friction to the process."

However, the chance to get rewards for paying the rent could be "a game changer in the credit card space," Matt Schulz, LendingTree's chief credit card analyst, said in an email.

“Housing is the biggest expense of most people every month, so the possibility of getting something back to pay the rent every month is a big thing,” he said.

However, Americans who regularly carry a balance should not pursue credit card rewards, as math generally does not work in their favor, he advised.