Bilt answers bipartisan call for lower credit card rates with new 10% cap

The promotion comes at a time of heightened political rhetoric around the cost of credit cards, with President Donald Trump announcing last week that he also is seeking a one-year cap on credit card interest rates of 10%.
New York-based Bilt, which originally built its business model around earning rewards on rent and other routine purchases, has been branching out into other financial products as it has grown. The Silicon Valley-backed startup was valued last year at $10.75 billion and has been expanding its partnerships with landlords, and is now starting to build in rewards programs for other routine transactions, like a customer’s mortgage payment. The company says roughly 1 in 4 landlords now accept Bilt.
In an interview, Bilt CEO Ankur Jain said Bilt was deciding to cap its interest rates on credit cards for one year to meet the “bipartisan call for a solution” on the issues of affordability that he says many of his customers are facing. Candidly, Jain also said it could be a chance to lure in new customers.
“If [a credit card rate cap] is going to happen, we’d rather be at the forefront,” Jain said.
The 10% rate applies as an introductory annual percentage rate (APR) on new eligible purchases for the first 12 months for cardholders approved for one of Bilt’s three new cards. After that, purchases, balance transfers, and cash advances carry APRs that can run well above 20%, similar to other rewards cards.
The credit card industry has long pushed back against any caps on interest rates on its products, with the average credit card interest rate hovering around 21%. They have faced their most serious challenge yet with Trump, who has embraced the populist idea of capping credit card interest rates for one year. Researchers at Vanderbilt University estimated that Trump’s proposal would cost the credit card industry $100 billion. Left-leaning politicians like Rep. Alexandra Ocasio-Cortez of New York and Vermont Sen. Bernie Sanders have long embraced capping credit card rates.