Renters Could Collect Home Down-Payment Points With Credit Card

A new credit-card concept would allow cardholders to pay and build credit on their largest monthly expense: rent.

Bilt Technologies Inc., a real-estate startup, is joining with Evolve Bank & Trust and Mastercard Inc. to launch a credit card designed for renters. Users can accumulate rewards points through rent and other spending, with no fees charged to the tenant or the landlord when paying rent on the card, according to Bilt.

Rewards points can then be put toward rent and other purchases, even toward a down payment on a house. “We believe paying rent should build your credit score because it’s your single largest liability,” said Ankur Jain, founder of Bilt.

Many landlords already accept credit cards, but they typically pass on processing fees to renters, often totaling about 3%. For landlords that don’t accept plastic, Bilt says it will mail landlords paper checks on behalf of the tenant, then charge the renter’s credit-card account, with no fee.

The partnership can afford to offer no-fee rent payments because of the fees that Evolve and Mastercard will collect from all other types of spending on the card, according to Bilt. The card program also attempts to incentivize non-rent spending by increasing the rewards for rent when cardholders spend more on everything else. Mastercard declined to elaborate further on how it will profit from the card without fees on rent payments.