A few months ago, LaQueshia Clemons and her husband were looking for ways to earn more points on their credit cards. After poking around, they decided to give Bilt Mastercard * a go.
The Bilt Mastercard is a unique housing credit card designed to help you earn rent payment rewards. Later this year, according to a letter to members on its website, Bilt will also offer points for mortgage payments. Another housing credit card, the recently released Mesa Homeowners Visa® Preferred Signature Credit Card*, allows homeowners to earn credit card points for mortgage payments, though its terms and conditions are a bit more restrictive. dark.
Clemons, a 35-year-old financial therapist at Connecticut-based Freedom Life Therapy, now uses the Bilt card to pay monthly rent, electricity, cell phone, car insurance premiums and streaming subscriptions. She and her husband put about $2,500 a month into the Bilt card, racking up a ton of rewards points in the process.
Since housing is the largest expense for most American households, it can make sense to use a credit card for large, ongoing expenses like rent or mortgage payments. But is using a housing credit card worth the risk? Let’s take a closer look.
Is it a good idea to pay for accommodation with a credit card?
Paying for anything with a credit card, including housing, can be worthwhile, but it always depends on your budget and spending patterns. If you’re financially strapped due to a recent job loss or have unpaid medical bills, you don’t want your housing expenses to accrue interest and put you further in the red.
However, if you feel confident that you can use the card conscientiously — meaning you can pay off the balance promptly when it’s due each month — using a credit card can be a good way to accumulate points.
Clemons, for example, pays off her balance every week. A portion of each weekly payment goes toward credit card payments, and it never accrues interest. Because her cards are paid off in full each month, she can earn points without getting hit with fees or heavy interest charges.
“I can build up enough points to take the money off the rent,” she said. Although it may only be a few extra dollars each month, the extra money can be spent on something, like coffee on the way to work.
Beau Wirick, a 38-year-old wealth advisor at California-based Morton Wealth, has been using the Bilt card to pay his rent for the past few years.
“Getting rental points is a game changer, so I recommend the Bilt card for that purpose,” said Wirick. Wirick gets the best redemption value by transferring points and redeeming them through Bilt’s travel partners, which can be used on flights, car rentals, hotels and activities.
What are the pitfalls of paying for housing with a credit card?
The downside to paying off your home with a credit card is accumulating more debt if you don’t have the cash to cover your balance each month. It’s often safer to pay for housing the traditional way, that is, by transferring funds via ACH from your bank account, writing a check or money order.
It’s also important to check with your landlord or property manager about fees. While the Bilt and Mesa cards have no annual fees (and the Bilt card has no transaction fees for rental payments), your landlord may impose a processing fee if you pay with a credit card.
One way to avoid this with Bilt is to choose BiltProtect, which allows you to pay rent and earn points without dipping into your credit line. With this feature, funds are withdrawn directly from your linked bank account. If you choose not to use this feature, your rental will be charged directly to your Bilt Mastercard, just like any other charge on your credit card.
Do housing credit cards have requirements?
Credit cards that specialize in paying off your accommodation do not have unique requirements. To qualify for the Bilt Mastercard, you must be at least 18 years old and a resident of the US or its territories. There is technically no minimum credit score to be approved, but a good to excellent score (670 to 850) is recommended.
To earn points on the Bilt card, you’ll need to make at least five transactions each billing cycle. To make sure you never miss that threshold, try setting your Bilt card as the default method for recurring spending.
For the Mesa card, anyone with an eligible device (iPhone only) can join the waiting list directly, according to a company representative. Once you’ve been invited to apply, you’ll be asked to provide additional information to make a credit decision on your application, similar to other unsecured consumer credit cards.
What can you earn with a housing specific credit card?
Bilt Mastercard
Bilt offers 1x points per rental dollar, up to 100,000 points per year. To earn points, you’ll need to use the card at least five times in each monthly statement period. You can earn higher points when you spend on travel and restaurants. As a Bilt cardholder, you can get special benefits at partner restaurants, fitness studios and ride-sharing apps.
You can transfer points through Bilt’s travel portal and collect additional points when you book trips through the portal.
In addition to improving your credit score if you make monthly payments on time, Bilt has an added feature that allows you to choose to report your rent payments to the three credit bureaus, which can also boost your score.
Mesa Signature Preferred Credit Card for Homeowners
Currently, you’ll need to get on a waiting list to sign up for the Mesa Visa card, which is only available at the Apple Store.
The Mesa Credit Card has different rewards rates depending on your purchase: 1x points per dollar on your monthly mortgage payments; 2x points for everyday essentials (eg, groceries, gas); 3x points on home-related transactions such as utilities, maintenance, decorating and home improvement projects; and 1x points for everything else.
You can also take advantage of other perks like Sam’s Club memberships and credit with Mesa brand partners like Thumbtack and Wag! Points earned can be redeemed towards a credit statement, gift cards, travel and mortgage payments.
What protections are there with Bilt or Mesa?
Sharing sensitive information with another party can always bring risks, so it’s important to keep your account information secure.
Bilt and Mesa credit cards come with standard zero liability protection to help secure your sensitive personal and financial information from fraudulent activity. Because Bilt is a co-branded Mastercard with Wells Fargo, it comes with 24/7 ID theft protection.
“You’ll want to make sure they have safeguards in place for transmitting your payment information to your landlord, property manager or mortgage company,” said Jovan Johnson, a CFP and co-founder of Piece of Wealth Planning. “Look for other card features, such as fraud alerts or virtual card numbers, which can add an extra layer of protection.”
Are Home Loan Credit Cards Worth The Ads?
Each credit card has specific benefits and bonuses, so it’s best to research the pros and cons before applying. Bilt is more established and should expand its reach soon. Mesa is still quite limited in its reach, so it’s worth doing more research on the terms and conditions.
Financial experts say you should only use a credit card when you can afford to pay off your statement in full and not carry a balance. Otherwise, it’s easy to fall into debt from high interest charges.
“Credit card programs are designed to get you to spend more money,” Wirick said. “As long as you can keep yourself from falling into bad habits, go ahead.”
*All information about Bilt Mastercard and Mesa Preferred Homeowner Signature Credit Card was independently collected by CNET and has not been reviewed by the issuer.
