@@verafiedairman yes so the card will have 3x on dining, 2x on travel, 2x on other purchases. No more rent day stuff. If they add another 3x on the grocery store and change the travel to 4x then it'll be even better. They have to turn bilt into a daily card instead of rent day card
@@mukeedcoforstuff I see what you’re saying, it’s a 2x, catch all, card. Plus 3x dining. The whole premise is BILT on paying rent, so in other solutions would be to reduce to 1x for all purchases with the incentive to use for rent w/o fees. Giving 2x could be more costly. They 2x categories for only one day to incentivize you to use, doesn’t mean you will. I would be taking more advantage if we had 2x. I would get more value, and I mostly miss the rent day double points if it doesn’t land on the weekend. In reality, Wells Fargo just added this new rewards program a few years ago. I don’t know their books, where the losses are stemming from. Their strategy seems to be adding new line up of cards to acquire new customers, which reasonably comes at a cost. They have till 2029 to become profitable. I’m sure they’ll figure it out.
Good news for the LT stability? Love you guys and followed you for years, but in business when one party is losing out big they are incentivized to end the agreement. Usually these types of details get leaked by the disgruntled party for negotiation reasons, and I guarantee you WF has a termination clause (likely at a >$100M amount). Bilt is dead without WF. Bilt also has a right to terminate the points program for any reason in the T&C with a 30 day notice. Bilt's survivability is dependent on WF. No VC is going to pump more money into this.
Yeah, I'm not sure what happened there but it recorded that way and I couldn't go back and make zoom unfreeze it, so I had to run with it. The audio thankfully didn't freeze. -Nick
I will comment on this in my next post this Friday. I wonder how many signed up for this card since the WSJ story broke and of course after Bit's CEO found the time to reply, I mean, keep the PR going....Heck, at $200 a pop and 0.8% payments coming from WF for every app and rent payment, I mean, I would keep this "shocking" deal in the face of everyone, milk it baby. As Bilt has done brilliantly taking WF to the clearners...at $120 million/year LOL. This is not a CSR card type you guys. I just wish Bilt gave up some of the loot and gave it back to us via SUB bonuses. But then again, wining and dining bloggers on private islands is way cheaper for Bilt 🙂
No, Bilt is not earning money with rent payments. The points they give cost at least 1cpp, and they are getting 0.8%, that means they are losing 0.2% at least.
The vast majority of points are likely redeemed for rent an Amazon purchases (same as most Amex points are likely redeemed for Amazon, etc), and those are (I believe) at 0.6cpp, so Bilt is coming out ahead when people redeem in those ways. There is no way to get 1cpp except by transferring to partners and I am not aware of any transferable currency where the majority of points used are transferred to partners. Those of us who learn how to use points well are in the minority of any system -- if we were in the majority, the economics wouldn't work for any bank. So the point we were making there is that Bilt is getting 0.8% from Wells even on rent payments and then when people use points toward rent (which, as we said in the show, is a poor use of points but nonetheless a common one), Bilt is coming out ahead. -Nick
Did you listen to the episode? I wouldn't say that Wells Fargo "screwed up" here. I think some of the forecasts don't make much sense, but at the same time as I said on the show this seems like a pretty reasonable cost to offer what they are offering (and certainly a far lower cost than other banks incur for new cardmember acquisition). -Nick
@@frequent-miler Nick, they did screw up per the article. They used historical models for average cardholders carrying balances. They didn't consider that people would only use this card for rent and use other cards for regular spend, and the target market is younger.
@@frequent-miler tbf u would not be happy if forecasts are wildly off and no 1 can show u where/how the $10M/mo loss is actually cash profit (elsewhere). Pretty much the definition of “screwup”
Im not dumping Bilt. Nor am I going to to transfer out my points just because of a WSJ article.
Just waiting for Bilt to add mortgage
Lmao. Don’t hold your breath. And did u read the article or even the financials?
The CSR lost 200mil in Q4 of 2016. Losing 10m a month sounds like a bargain.
Keeping BILT card, It's fantastic. However, transferring all points asap to Hyatt as they accrue.
Hmmm...this reminds me of a documentary I'm watching right now on HBO...Movie Pass -> Movie Crash, except I'm invested w/ BILT with Platinum Status. 😓
Thanks for the info + breakdown + video!
Wf should do away with rent day and make the other purchase category as 2x instead of 1x. That'd fix their monthly losses
So, catch all is 2x for 30/30 days per month rather than 2x categories 1day per month?
@@verafiedairman yes so the card will have 3x on dining, 2x on travel, 2x on other purchases. No more rent day stuff. If they add another 3x on the grocery store and change the travel to 4x then it'll be even better. They have to turn bilt into a daily card instead of rent day card
@@mukeedcoforstuff I see what you’re saying, it’s a 2x, catch all, card. Plus 3x dining.
The whole premise is BILT on paying rent, so in other solutions would be to reduce to 1x for all purchases with the incentive to use for rent w/o fees. Giving 2x could be more costly. They 2x categories for only one day to incentivize you to use, doesn’t mean you will. I would be taking more advantage if we had 2x. I would get more value, and I mostly miss the rent day double points if it doesn’t land on the weekend.
In reality, Wells Fargo just added this new rewards program a few years ago. I don’t know their books, where the losses are stemming from. Their strategy seems to be adding new line up of cards to acquire new customers, which reasonably comes at a cost. They have till 2029 to become profitable. I’m sure they’ll figure it out.
Good news for the LT stability? Love you guys and followed you for years, but in business when one party is losing out big they are incentivized to end the agreement. Usually these types of details get leaked by the disgruntled party for negotiation reasons, and I guarantee you WF has a termination clause (likely at a >$100M amount). Bilt is dead without WF. Bilt also has a right to terminate the points program for any reason in the T&C with a 30 day notice. Bilt's survivability is dependent on WF. No VC is going to pump more money into this.
Nick was freezing up lol he’s still in Morocco on the last minute travel challenge
Yeah, I'm not sure what happened there but it recorded that way and I couldn't go back and make zoom unfreeze it, so I had to run with it. The audio thankfully didn't freeze.
-Nick
I will comment on this in my next post this Friday. I wonder how many signed up for this card since the WSJ story broke and of course after Bit's CEO found the time to reply, I mean, keep the PR going....Heck, at $200 a pop and 0.8% payments coming from WF for every app and rent payment, I mean, I would keep this "shocking" deal in the face of everyone, milk it baby. As Bilt has done brilliantly taking WF to the clearners...at $120 million/year LOL. This is not a CSR card type you guys. I just wish Bilt gave up some of the loot and gave it back to us via SUB bonuses. But then again, wining and dining bloggers on private islands is way cheaper for Bilt 🙂
Wells Fargo needs to just market the card to more people who carry balances or those with lower credit scores.
Oh nooooo 😢
time to get some AAMiles at Bask
No, Bilt is not earning money with rent payments. The points they give cost at least 1cpp, and they are getting 0.8%, that means they are losing 0.2% at least.
The vast majority of points are likely redeemed for rent an Amazon purchases (same as most Amex points are likely redeemed for Amazon, etc), and those are (I believe) at 0.6cpp, so Bilt is coming out ahead when people redeem in those ways. There is no way to get 1cpp except by transferring to partners and I am not aware of any transferable currency where the majority of points used are transferred to partners. Those of us who learn how to use points well are in the minority of any system -- if we were in the majority, the economics wouldn't work for any bank. So the point we were making there is that Bilt is getting 0.8% from Wells even on rent payments and then when people use points toward rent (which, as we said in the show, is a poor use of points but nonetheless a common one), Bilt is coming out ahead.
-Nick
@@frequent-miler you can also redeem for travel at 1.25 cpp, and for house down payment at 1.5cpp
@@frequent-milerI dont doubt that is the case, but out of curiosity where can such info be found?
I'm not suprised, I am suprised that wells fargo screwed up this much when underwriting the credit card. Clearly this card needs to be changed.
Did you listen to the episode? I wouldn't say that Wells Fargo "screwed up" here. I think some of the forecasts don't make much sense, but at the same time as I said on the show this seems like a pretty reasonable cost to offer what they are offering (and certainly a far lower cost than other banks incur for new cardmember acquisition).
-Nick
@@frequent-miler Nick, they did screw up per the article. They used historical models for average cardholders carrying balances. They didn't consider that people would only use this card for rent and use other cards for regular spend, and the target market is younger.
@@frequent-miler tbf u would not be happy if forecasts are wildly off and no 1 can show u where/how the $10M/mo loss is actually cash profit (elsewhere).
Pretty much the definition of “screwup”