Renters Could Collect Home Down-Payment Points With Credit Card - WSJ

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.

I’m guessing it will have something to do with the advertised APR range of 15-22.5%, with top rates for subprime borrowers at 30%.

Unlike homeowners, who build equity with every monthly mortgage payment, renters get no long-term benefits from their monthly payments. Paying by credit card gives renters some additional value that could help them buy a house, Bilt says.

The additional value, of course, will be muted by the large credit card balances that ironically will put homeownership further out of reach for the renters “helped” by this credit card.

For the typical card user spending $1,500 on monthly rent for 10 years, Bilt estimates the accumulated points savings for a down payment would equal about $6,000.