Bilt Rewards vs Chase
Bilt did not sponsor nor was I endorsed to make this post. I decided to write this out of my own volition.
It’s been a few months since I made my first post about the Bilt Rewards card. I want to take a step back to reflect, evaluate how Bilt has changed in only 3.5 months, and my perspective about its trajectory moving forward. For features and benefits of the card you can checkout the previous post. First, let’s clear up the elephants in the room.
In my previous post I mentioned how I couldn’t obtain value from the card because my landlord only accepts ACH rent payments. This is resolved, and now can leverage the main benefit of the card (rent points). Honestly, I love it. The card has a $0 annual fee and the points are super valuable with the transfer partners. In my opinion, it’s a way better version of the original Uber card that came out in late 2017. And I think the target demographic of cards are the exact the same — young people who live in cities.
Second, I talked about bugs and onboarding issues. In the past couple months, the friends who have joined have not experienced the same issues I went through, so I’m hoping that means things are resolved.
The mobile app itself has changed drastically in the past 3 months. They’ve partnered with Amazon to let users use Bilt points for Amazon purchases, run special promos for NYC Restaurant Week, and most importantly partnered with Expedia to launch a travel portal so users can book flights at 1.25cents/point. This is a game-changer. And it’s very clear the card is going after the Chase Sapphire Preferred (CSP).
The allure to the CSP over the past 18 months has been two promos where new applicants received elevated sign up bonuses at 100K and 80K points. This was great for getting new people into the Chase ecosystem, the ROI for the consumer was a no-brainer — $95 annual fee for $1,250 in points.
However, this is where the card becomes vulnerable and Bilt comes in. After the first year, people exhaust the sign up bonus and are slapped with a $95 annual fee — making them question what they are paying for. Yes, the CSP has a $50 hotel credit, but remember the people who applied for the CSP got it for the sign up bonus, not a $50 credit. Given that the Freedom Flex and Unlimited have similar multipliers and no annual fee it simply makes sense for CSP holders to downgrade or cancel the card altogether. I know the elevated sign up bonus is a CAC (customer acquisition cost) play to bring new money into the Chase ecosystem, but I don’t know if it’s a sure-fire way to retain new money. Let’s see what the churn numbers are in the next 12 months.
Bilt’s multipliers, 2x on travel & 3x on dining, position it to go directly against the CSP. Although they don’t have a crazy sign up bonus, its a $0 annual fee and they have an easy way to earn 50k Bilt points year-over-year from an expense everyone already has. Even if you don’t have rent payments, you’re still going to come out ahead due to the competitive multipliers and Mastercard benefits (Cell phone protection, collision damage waiver, etc). They’ve positioned it as an excellent long-term daily-driver card.
I don’t think the 3x back on online grocery or 5x back on travel booked through the Chase portal on the CSP are differentiating enough, especially with the never-ending complaints with Chase’s customer service. Now that Bilt offers an elevated 1.25 cents/point redemption and access to transfer partners (United, AA, Hyatt, etc), I’m having a hard time justifying the CSP after year 1.
Bilt is still a startup, I’m really curious to see how they grow and if their business model is sustainable. So far they’ve created an amazing product and done a great job of differentiating themselves from every other “Rent-Payment” startup. I’m sure they are working on this, but I can easily envision a high-annual fee Bilt card that comes out with a nice sign up bonus, lounge access, TSA pre-check/global entry, and 1.5 cents/point redemption (sound familiar…?).
If anyone at Bilt is reading this, one strategy to truly capture market share is groceries. To this day Chase does not have a card with a dedicated grocery multiplier; and while Amex does, using Membership Rewards is like trying to find a girlfriend.
Of all the cool things Bilt is doing, my favorite is on their careers page. They have a role called “Dream Job” where you get to describe the type of role you’d want at Bilt. Seems like a great place to be and if I was looking for a new job then I’d definitely apply.
Shameless plug, use my referral: https://bilt.page/r/UW1Y-39P6
