Bilt, a company that has gained recognition for its innovative way of earning rewards on everyday purchases, has recently launched three new credit cards. Although the launch of the new credit cards has brought joy to many customers, it has also caused frustration, particularly in terms of the points-earning system. One of the most shocking aspects of the new credit cards is that you cannot earn points on tax payments using Bilt credit cards.

In this guide, we’ll walk you through what this means for cardholders, why it’s frustrating, and what you should consider before applying for one of Bilt’s new cards.

The New Bilt Credit Cards at a Glance

Bilt has diversified its products to include three different cards:

1. Bilt Blue Card - No annual fee
2. Bilt Obsidian Card – $95 annual fee
3. Bilt Palladium Card - $495 annual fee

Every card has its own set of benefits, structures for bonuses, and reward earning capabilities. Bilt promotes these cards as a means of earning points not only on rent payments but also on other daily transactions.

However, the terms and conditions also include certain exclusions that may not be expected by many users. One of the most significant of these is that tax payments are not eligible for points.

What Constitutes “Eligible Purch

To understand why the payment of taxes is excluded, it is necessary to understand how Bilt defines qualifying transactions. As stated in the terms of the credit card:

“Eligible Purchases” are transactions for goods or services, minus returns, refunds, or credits. The following are excluded from Eligible Purchases: balance transfers, cash advances, gift cards, person-to-person payments (such as Venmo or PayPal), cryptocurrency purchases, and tax payments, among others.

This means that if you normally pay your quarterly taxes using a credit card, you won’t be able to earn points with Bilt, even if other major credit card companies, such as American Express or Chase, allow you to earn points for such transactions.

Why This Matters for Certain Users

The limitation on tax payments mostly applies to self-employed individuals or freelancers who are responsible for their own taxes. Many of these individuals use credit cards to earn points on their tax payments, which may involve a small service fee of about 2% for using a credit card for IRS payments.

For those who are used to earning rewards for their spending that is tax-related, this new development is considered limiting. Unlike other credit cards, Bilt makes it a point to specifically exempt tax payments from earning rewards.

The Wider Frustration with Bilt Changes

The tax payment exemption is merely one example of this larger trend that has been frustrating users: Bilt’s move from a simple reward system to a more complex, conditional-based system.

First, Bilt started gaining popularity for rewarding users for paying rent without any charges, which was a great value for money. The company focused on keeping things simple.

However, with the introduction of the new cards, members feel that the system has become too complicated:

• Certain categories of expenditures are exempted
• Earning potential is no longer as universal as advertised
• Restrictions are perceived as “gotchas” by users who are expecting flexibility.

The valuation of Bilt has risen to above $10 billion, but despite the company’s vision being more than just credit cards, according to its executives, users are primarily concerned with the rewards program itself. The exclusion of the tax payment rule, for instance, is one of the factors that make users feel that the company’s promise of rewards is not as broad as it seems.

The Bilt Palladium Card: Rewards versus Limitations

The Bilt Palladium Card is promoted as one of the most rewarding ways to spend money, with 2x points on eligible purchases. This is a great benefit for fans who enjoy maximizing points.

However, when you go through the fine print, exceptions such as taxes, person-to-person transactions, and online marketplaces restrict the earning capacity. This is where the gap exists between the promised use and the usability of the card.

Other points of consideration for Palladium cardholders are:

• $495 annual fee: Can it be justified if many spending categories are excluded?
• Hotel credits: Credits of up to $400 per year, which require multiple stays to earn
• Priority Pass membership: The incremental value of Priority Pass membership could be considered low for frequent travelers

These considerations mean that cardholders must determine whether the rewards are sufficient to offset the costs, particularly in light of the special conditions such as the tax payment exemption.

How Bilt’s Approach Differs from Other Credit Cards

In contrast to its competitors, such as American Express, Chase, Capital One, or Citi, which tend to permit points for credit card tax payments, Bilt adopts a tough stance. It is the first major credit card issuer to exclude tax payments as a rewards-eligible category.

Consumers who are used to making high-value transactions using leveraging points may find this limiting. After all, using cards to pay taxes has long been a valid way to accumulate points for spending on other things.

The question that comes to mind is: why does Bilt choose to exclude this category when they are still taking standard interchange fees for these transactions? It has been hypothesized that this is a way of managing profitability, while others believe that it is a mismatch between the rewards program that is being marketed and what is actually being offered.

Evaluating Whether a Bilt Card Is Right for You

However, Bilt’s new cards still have some advantages despite the above limitations:

• Rewards on everyday spending (with caveats)
• Unique benefits such as rewards for renting
• Possible welcome bonuses for new cardholders

However, the following should be carefully considered by potential users:

• Spending habits: Are your typical expenses categorized as eligible spending?
• Annual fees: Are the benefits and rewards worth the annual fee?
• Alternative cards: Would other credit cards offer more points for the same categories, including taxes?

However, if you are a freelancer or someone who pays a lot of taxes on a quarterly basis, the loss of the ability to earn rewards on taxes might be more significant than the other benefits, especially if you were maximizing rewards in this category before.

Conclusion:

Bilt’s launch of three new credit cards is a sign of ambition and innovation, but it also reflects the conflict between marketing and usability. Although the Bilt Palladium, Obsidian, and Blue cards all have their own benefits, consumers should be aware of some important exclusions, especially with regard to tax payments.

This means that Bilt is not as universally rewarding as it claims to be and poses problems for consumers looking for a flexible rewards card. In other words, Bilt may still be a good option for daily spending, but for some, the limitations, particularly the tax payment exemption, may be a deal-breaker. As with any credit card, it is important to read the fine print before making a decision.