Wells Fargo's Partnership With a Rental Reward Card Is Costing The Bank Plenty. Or Is It?

Wells Fargo and Bilt Rewards — a fintech startup with a multifamily rental reward system — launched a credit card in 2022. According to a Wall Street Journal article, the partnership is on rocky financial grounds.

But according to what both Wells Fargo and Bilt have told GlobeSt.com, there are serious errors in the Journal’s story.

Starting at the beginning of the story, Bilt and Wells Fargo partnered on a credit card with a good points reward system, according to BankRate. The card also earns points on rent payments so long as the consumer uses it enough times during the month. Aside from uses like travel, fitness, and dining, cardholders can also use points toward rent and even an eventual home purchase down payment.

“But Wells is losing as much as $10 million every month on the program as savvy customers flock to the card, according to current and former employees,” the Journal wrote. “Executives made internal projections on key revenue drivers, such as the likelihood that cardholders would carry balances, that turned out to be inaccurate.”

The paper continued, “The financial losses triggered a renegotiation of the program that has been under way for months. Wells has told Bilt that it doesn’t intend to renew the contract, which is scheduled to end in 2029, unless economics are changed in its favor.”

The Journal did note that Bilt said the reporting was “an inaccurate representation and that the company “committed to a long term partnership with Wells Fargo that benefits all parties.”

Both companies still insist that the Journal got some important things wrong.

“As with all new card launches, it takes multiple years for the initial launch to pay off and while we are in the early stages of our partnership, we look forward to continuing to work together to deliver a great value for our customers and make sure it’s a win for both Bilt and Wells Fargo,” the bank said in a prepared statement.

Bilt wrote, “This is an inaccurate representation of our strategic partnership with Wells Fargo. Following our co-brand card’s successful launch in 2022, we have been impressed by the early traction and growth and we are committed to a long term partnership with Wells Fargo that benefits all parties, most importantly – our customers.”

Bilt chief executive Ankur Jain said in a social media post, “Wells Fargo went on the record with the WSJ stating: ‘There has been no conversation among decision makers to exit the BILT agreement. To suggest otherwise is false.’ The WSJ chose not to run this.” He also wrote that 70% of Bilt cardholders were new customers to Wells Fargo with an average age of 31 and average FICO credit score of 760. Jain added that banks often spend between $1,000 and $2,000 on acquisitions costs for “premium, next gen customers.”