Now that Bilt has “fixed” its overly complicated Bilt 2.0 rewards program by introducing a slightly less complex option (see details here), I decided to take a quick look at which option is better. The answer? It’s complicated.
Option 1 vs. 2
As a reminder, at the time of this writing, Bilt is planning to offer two options for Bilt 2.0 cardholders to earn points from housing payments (rent or mortgage):
- Option 1:
- Cards do not earn Bilt Cash from spend
- Housing payments earn points based on your everyday spend as a % of monthly rent/mortgage:
- <25%: Earn 250 points
- 25%: Earn 0.5x points
- 50%: Earn 0.75x points
- 75%: Earn 1x points
- 100%: Earn 1.25x points
- Option 2:
- Cards earn points + 4% back in Bilt Cash
- Bilt Cash unlocks points on housing payments
- Every $3 of Bilt Cash unlocks 100 Bilt points
Modeling $1K Housing Payments
I created a spreadsheet to analyse the two options. I started with the assumption that a person has $1,000 in monthly housing payments. The following chart shows the number of points earned from housing payments with each option (left, vertical axis) based on monthly credit card spend for non-housing stuff. The blue line shows the points earned for housing payments with Option 1, and the red line shows the points earned for housing payments with Option 2. The yellow line shows the amount of Bilt Cash left over with Option 2, and available for other uses.
Note: The following charts do not include points earned from credit card spend. They only show points earned from making housing payments through Bilt. By doing it this way, this shows the difference in earning between options 1 and 2: it doesn’t matter which Bilt card you have.
Findings:
- When monthly spend is less than 75% of housing payments, neither option is clearly superior. Option 1 looks like steps because it is best right when you reach a target (e.g. when everyday spend reaches 25% or 50% of housing spend.
- When monthly spend exceeds housing payments, Option 1 is consistently 25% better than Option 2, but only if you don’t value left-over Bilt Cash.
- If you do value left-over Bilt Cash, it doesn’t take long for the value of that Bilt Cash to exceed the extra points earned with Option 1. For example, if you value Bilt Cash at 20% face value, and Bilt points at 1.5cpp, then 250 Bilt points = $3.75. So, at 20% of face value, you would value $20 Bilt Cash (20%=$4) more than the 250 Bilt points. You get $20 of Bilt Cash when your everyday spend exceeds your housing payments by 25%.
Modeling $10K Housing Payments
When I first modelled $1K in housing payments, I figured that the pattern would be the same for larger payments. That’s not true at the low-end of spend, though. Option 1 offers a minimum of 250 points each month. With my first analysis, that 250 point minimum had a large effect and made Option 1 look like a better option for those whose everyday spend is a tiny fraction of their housing spend. With $10K in housing payments, though, the 250K minimum is far less meaningful, and Option 2 looks better starting out of the gate. From this, we can add one more conclusion:
- If your housing payments are very high, and your everyday spend is low, Option 2 is a clear winner.
Conclusion
The good news is that it would be hard to make a catastrophically bad choice between Options 1 and 2. The worst mistake will, at most, cost you 25% your housing spend amount. For example, if your housing spend is $2,000, then picking the wrong option will, at most, cost you 500 Bilt points.
The one thing that the above analysis really clarifies for me is the decision to be made when your monthly everyday spend greatly exceeds your housing spend. In that case, you need to choose between earning more points (Option 1) or more leftover Bilt Cash (Option 2). Hopefully, we’ll get some clarity in the near future about how to value Bilt Cash, and then we’ll be able to analyse that choice better.
Spreadsheet
If you’re interested in checking out the Google Docs spreadsheet I used for this analysis, you’ll find it here. Let me know if I got any formulas wrong! Once you open the spreadsheet, you can optionally copy it to your own Google account by selecting File… Make a Copy.
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So have there been any clarification if the rent/mortgage payment has to be in full? For example, if my rent/mortgage is $2k and I only pay 50% ($1k) and my spending is more than $1k, will I get 1.25 points on the 1k points?
Gemini AI confirmed that my calculation below is accurate. So for non-bonus / non-SUB spend 4X is a winner
Going with Greg’s 10K monthly housing example. With Option 1 Palladium card- if my everyday spend is 2.5K monthly, does this mean I will get 10K points back? 5K from everyday X 2 and another 5K from housing X 0.5? So it’s effectively 4X my everyday spend? If so sounds like very decent everyday spend deal given I’m getting nothing from housing today. Is my math right? I don’t have phd nor an elec engr degree…
Yes: Versus C1V: 5k regular spend + 20k housing minus 10k in housing fee (unreimbursed) = 15/2.5 = 6x regular spend (and annual fee $95 vs. $495). So 4x is a loser!
Sorry for being dense… I’m not getting how you got “10K in housing fee” and not also understanding how you got 2.5 as a denominator. Please elaborate?
Fee on the mortgage is 3%. Total of 2% is recovered in points so 1% (10k points) still to be paid. 2.5k is your number for everyday spend.
The only reason to justify or explain this idiocy is to keep Bilt advertising money coming in. Hopefully the blog owners with integrity will be honest enough to not endorse this dumpster fire
Really? These guys have been upfront on their podcasts and have demonstrated their integrity consistently. Explanations don’t equal endorsements.
This is a 0 IQ comment, the post is critical of the issues with these cards and they’ve maintained an objective POV despite podcast endorsements.
It’s the hot topic in the credit card world which (spoiler alert) they happen to be in. Some people are getting these cards and a blog that breaks down the new earning option is completely appropriate.
If you don’t like the cards, don’t read the content, and consider if there’s grass near you that can be touched.
Apparently you didn’t read their posts.
Have you read the analysis? It comes down to creating a set of mnemonics that anyone can use without needing to understand the underlying. That is what Greg’s article was an early attempt to do.
Richard . . . may I call you Richard . . . or do people just call you Dick? I’ll bet your parents called you Dick.
Your comment is offensive. Regular readers of this blog will attest to the FM team being straight-shooters. While the new Bilt system is less than clear, the FM team is trying to show how the card can work and how to take advantage of it. Just because you can’t figure it out doesn’t mean the card is bad. It just means you don’t have the (stinkin’) brain power to figure it out.
I figured it out – it’s a card for people that intuitively understand medical insurance deductibles and co-pays.
Greg – If I opt for Palladium but cancel in February 2027, will the gold status obtained through the card still continue to end of 2027?
Yes
Also, The blue “rising segments” all have the same slope, but the slope should depend on how much you have covered the housing payment. I.e. 0.25, 0.5, etc.
I see now corrected as vertical segments for the 10k example. Not for the 1k example.
One other key consideration is spend volatility, month-to-month.
At least for someone like me — who would intermittently use a Bilt card when not working on new card spending bonuses — I think the bilt cash option is better as I can roll it over month-to-month (until the end of year). For example, a big tax payment in January could float me free rent payments for several months, with option 2. If I understand the note for Ankur, that’s not something the new option 1 offers.
So I think for lots of folks who frequent FM and are often working on new cc sign up bonuses, I think option 2 will often be superior. To me, the new option #1 is just further complicating something already overly complicated (and under-specified).
I have a phd in electrical engr and applied math, fwiw, and even I find it way too much of a mess. It’s hilarious to me (and probably to you all) that they further complicated it as part of a “fix”.
I agree with your conclusion, but note that you don’t earn rewards on tax payments with Bilt 2.0, they’re one of the excluded categories.
The conclusion doesn’t hinge on the size of the rent. It hinges on how much you put on the card. With $1,000 rent, option B is better at over $750 total other spend . At $10,000 rent, option B is superior at over $7,500 additional spend.
The only reason why there are two graphs is because of the fixed 250 Bilt point minimum for the lowest bracket of option 1. For a spend/rent ratio below 0.25, option 1 gets better for lower absolute rent.
At the extreme, you get more points spending under 25% of your rent than between 25% and 50% if your rent is $500 or below.
My comment here doen’t apply since Greg clarified that these graphs refer to housing payments.
Someday this will be a phd case study at credit card rewards university.
So this what happens to loyalty programs when AI goes Rogue. Good luck humanity
The slope of the red line is a function of the card you use. Palladium = 2x;
No, the charts don’t show points earned from credit card spend — only points from housing spend.
I got approved for the Palladium card and I will definitely be spending significantly more than the mortgage payment. Would Option 2 be best?
It depends on the answer to the question: Is the value of Bilt Cash on 25% of your mortgage payment greater than 25% of your mortgage payment.
The slope of the red line is a function of the card you use. Palladium = 2x;
Stop posting the same f-ing comment. Sheesh.
Then fix the web site! Idiot.
Your Akismet anti-spam software is making mistakes. It is treating all my comments as spam. Or, are you deleting them?
I don’t see any of your comments in the spam folder. There’s a caching issue such that comments sometimes take about 10 minutes to appear.
So 1990’s. I have Daniel the Dildo telling me (in insulting, juvenile tones) to stop posting the same comment multiple times — like I would have an incentive to do that.
Now do a post on which credit card I should get as someone without rent or mortgage, and why it is none of the Bilt cards 🙂
Possibkly Palladium, but only if Bilt Cash turns out to be very valuable.