Could a Credit Card Help Renters Work Toward Buying a House?
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What is the main topic discussed in this episode?
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Here's your money briefing for Wednesday, June 23rd.
What is this new renter-focused credit card and who created it?
I'm Charlie Turner for The Wall Street Journal, filling in for J.R. Whalen. Even if you reliably pay your rent every month, it probably isn't helping you build up a good credit history. And it's almost certainly not helping you amass a down payment on a house. But could a new kind of credit card help?
One of the aims here is that younger people who don't have credit or who have bad credit can work on building it through having something to show for those large rent payments that they make consistently.
Coming up, our housing reporter Will Parker walks us through how this new credit card works and what the pros and cons are. That's after the break.
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How does the card let renters pay rent without landlord credit-card acceptance?
They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
How does the card avoid charging renters transaction fees for rent payments?
There's a new credit card geared toward renters. It's part of a partnership between a real estate startup called Built, MasterCard and Evolve Bank & Trust. The idea is to let renters build up reward points that could eventually be put toward a down payment on a house. Let's find out more about this new concept from our housing reporter, Will Parker. Will, thanks for coming on the show.
Thanks for having me.
Well, there's lots of landlords that already accept credit card payments for rents. So what's the advantage to using this card?
Can paying rent with this card actually build credit history for renters?
This card would let you pay your rent, but not have to pay a big fee. Right now, usually there's a transaction fee associated with paying with a credit card. And landlords tend to kick that back to the tenants. And that could be about 3% of your rent payment. And that really adds up over the course of a year.
What about as far as a renter being able to build up credit this way?
So rent is one of the largest expenses that many people have. And when you're paying with the check, that's a lost opportunity, some people think, for these payments to help you build your credit score, like other charges or purchases you would put on a card. So one of the aims here is that younger people who don't have credit or who have bad credit can work on building it through having something to show for those large rent payments that they make consistently.
Can you walk us through how this card actually works, Will? How can these companies afford to offer no fee rent payments?
right so what they're what they're purporting to do is anyone can pay rent with this card so if your landlord doesn't accept credit card payments they will mail a check to your landlord and then put the payment on your card account and they say again that they'll do this with no charges on any of the rent payments what they're betting is that people will use this card for other purchases and the fees on those purchases and the APR on any balance they may have, that's going to be the way that they make money off of this. I think that's the bet.
Okay, so this card can help a renter build up a credit score and a down payment.
How are rewards points converted into a down payment on a house?
How does the card work when they go to buy a house?
The rewards points that you get, you get some for paying rent, you get others for other purchases.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:39
2
What is this new renter-focused credit card and who created it?
0:39–1:21
3
How does the card let renters pay rent without landlord credit-card acceptance?
1:21–1:53
4
How does the card avoid charging renters transaction fees for rent payments?
1:53–2:25
5
Can paying rent with this card actually build credit history for renters?
2:25–4:01
6
How are rewards points converted into a down payment on a house?
4:01–5:39
7
How much down-payment help can a typical renter realistically expect from this card?
5:39–6:48
8
What are the risks of using a credit card to pay rent and how does the program limit debt?
6:48–7:20
Speakers
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