BILT card is a money loser for WF

[RedKhaos]

I know most people here are probably more settled in their finances so this card doesn't pop up often, but the Bilt card bought by Wells Fargo has definitely been one of the flashier credit products. Here are the results according to the Wall Street Journal.

1) WF pays Bilt $200 for every new account

2) WF eats not only the 2-3% interchange fee for rent payments as expected but also pays an additional 0.8% to Bilt

3) WF was expecting 50% of customers to be revolvers and only got less than half of that

4) Bilt Rewards is costing WF $10 million a month

https://www.wsj.com/finance/banking/wells-fargo-credit-card-rent-rewards-8e380852

So another fintech project bites the dust... or is on track toward that. If you're renting, get your bonuses and points while you still can.

I think everyone knew this was a loss leader project and the losses seem even mild compared to the billions Goldman Sachs lost for the Apple Card. I was surprised by how much WF gave up though with all those payments to Bilt. Someone mentioned it's like a reverse cobranded card. And projecting 50% revolvers for their customers was ridiculous. That's the national average when counting the legions of subprime and predatory credit cards. WF has always been way more conservative in underwriting credit. There was no way for that math to work out. I'm guessing heads will roll if they haven't already.

[Bockrocker]

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@RedKhaos wrote:

2) WF eats not only the 2-3% interchange fee for rent payments as expected but also pays an additional 0.8% to Bilt

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WF was just cutting checks to landlords and moving balance onto the card.  Could do it a lot cheaper than 2-3% although it sounds like they have a third party involved so who knows.

Bilt card has poor redemptions for cash back, the airline/hotel points crowd is probably more adept at gaming the system so another bad move on WF part.

[pizzadude]

Interesting numbers and we'll see what happens if / when they renegotiate the terms of the deal.

Also probably worth mentioning here is they're capturing data on rent / landlords / tenants, no doubt they're monetizing this in some way as well. 

[xenon3030]

In their official webpage, they mentioned that it is the winner of TPG reader's choice award . Their webpage link is below. Not sure whether TPG was among the official places to score credit cards and whether the readers are biased or not. To create a good CC portfolio that can create revenue while attractive to the customers, more works are needed and WF needs to spend much more efforts on their CC products. 

I assume that the CL that WF would provide on this card should be slightly higher than the rent that each user pays. So, the majority of users need to do PIF each month to avoid tanking the Fico8 score. At the end of the day, limited number of users would be remained to pay interest and it would translate to a net loss for WF.

https://creditcards.wellsfargo.com/bilt-rewards-credit-card/

[Gregory1776]

Paying rent with a CC and not paying it off every month just as you do rent - you'd be a idiot.

[PullingMeSoftly]

Even though the card might see revisions, the BILT program itself would hopefully still continue as is. They've got some clutch partners, but I'm a bit bummed that the benefit of using the Alaska Visa through the BILT app is not applicable to mailing rent checks, only to landlords that have a portal (for using the routing/account #'s BILT provides).

[IsambardPrince]

Wells Fargo is known to look for people it thinks won't be revolvers and deny them whatever their credit rating is, especially on their new Attune card.

It's easier to get in Wells Fargo with a bankruptcy than with an 800 FICO and lots of income and assets because they know that you're probably not going to pull in any interest. They clearly want their cards to be a huge debt trap. High income outstanding credit is not their target audience.

[NoMoreE46]

Here is an 8 minute video that touches on this, WMT/C1 and  Apple/GS.

https://www.msn.com/en-us/video/travel/why-co-branded-cards-can-be-high-risk-high-reward-for-banks/v...

[urbex]

Guess I can abandon all hope of ever seeing BILT opening up to mortgage payments, lol.