Use Points for Down Payment
Every once in a while, a strategy comes along that completely reframes how you think about points and miles. Not a “nice redemption.” Not a “solid value.” I’m talking about something that turns every dollar you spend into a meaningful step toward a real financial goal. If you've attended a ToP Meetup before, you've likely heard Sarah or I talk about this concept. Yes, points & miles are fantastic for traveling, traveling more frequently or luxuriously, or all of the above. But there are also real world benefits to our incredible hobby and steps you can take to extract meaningful financial freedom from credit cards. One example is when I use points for down payment on a home. I explain more below.
Target Audience
I want to say that before you use points for down payment on a home, this strategy may not be for you. Yes, the value is great for cash in your account. But there is a whole lot more value out there when using for travel. If you are not earning enough points & miles to travel as frequently and/or as luxuriously as you wish, you might not want to even consider this strategy. On the flip-side, if you're not focusing enough on financial freedom, meeting your financial goals, or earning more points & miles than you can possibly use at any given time, you should give this a shot. In the end, there is fabulous value for us all, whether you travel all over the world in first class or you use your points for a swimming pool.
Earning the Points
The backbone of my plan to use points for down payment on a home is my new Bilt Palladium card. This card earns 2X on all non-housing spend. In addition to earning points, the card earns 4% Bilt Cash, which is an internal loyalty currency. We breakdown the Bilt Cash program HERE. My favorite use so far for Bilt Cash, other than earning 1X on housing payments is to add an extra +1X on everyday purchases, up to $5,000 in spend with a “Point Accelerator.” The Point Accelerator, which is capped at 5 uses per calendar year (i.e. $25,000 in spend), means you earn a total of 3X on all non-housing spend, up to the $25,000 cap per year.
Note: each Point Accelerator “costs” $200 Bilt Cash to activate, so maxing the $25,000 annual limit costs $1,000 Bilt Cash. You can earn that amount of Bilt Cash by spending $25,000 on the card.
Turning 3X Rewards Into 4.5% Cash Rewards
If you missed it, I previously wrote about the Bilt Rewards partnership with eXp Realty. Buried in all the home ownership stuff on Bilt's website is a little mostly overlooked nugget: you can convert your Bilt Rewards into a down payment for a home at the rate of 1.5 cents each. Let that sink in for a minute. You can earn Bilt Rewards at 3X (or more) and then convert them into cash rewards at 1.5 cents each.
All that is required is for you to fill out a form on the Bilt website and you submit proof of the contract of sale and purchase date. You can see this form HERE. If it is really this simple, this is amazing. After all, a catch-all 4.5% cash return on spend card is unheard of. I was determined to test this process for myself and see how easy (or not) it really is.
My Experience
One of our side hustles is real estate investments. We've owned a rental property for much of the last decade. Since we were shopping for a new rental property, I decided to use my Bilt Rewards points for down payment on the new property. Once we were under contract, I filled out the form above. It was very simple and took only a few minutes.
Filling Out the Form
I was required to confirm/submit:
- Full name
- Email address
- Date finalizing purchase of the home
- Upload document(s) confirming purchase/sales agreement
- Confirm if I wished to convert all my Bilt Rewards at $0.015 each
The process took less than 5 minutes and I was told I would receive the payment within five (5) business days.
Bilt Response
Much to my surprise, the business day following filling out the form, I received an email confirming my redemption and my payment for $3,440.06, as I cashed in 229,337 Bilt Rewards.
The next step was to link my bank account via the email request and it promised payment to the linked bank account within 3 business days.
Payment to Bank
Sure enough, exactly 3 business days after linking my desired bank account, my points for down payment reward payment deposited into my bank account. In total, it took 6 business days from my initial request, but I did not link my bank account for 3 days while on vacation. So had I promptly linked my bank account, it would have been only 3 business days from request to payment. Incredible, if you ask me.
Use Points for Down Payment: ToP Thoughts
I absolutely love finding outside-the-box redemptions. For this redemption, I put cash in our bank account to help buy a rental property and I discovered a 4.5% catch-all card on up to $25,000 spend annually. That is a best-in-class return on spend actual cash value and let's you fund a major purchase. Again, this redemption is probably not for everyone, but when it works, IT WORKS!
Have you ever used your points as cash? Were you aware of this redemption option for Bilt Rewards? Come over to the Facebook group and let us know.
