Both Confortini and Lamarre post about personal finance topics on TikTok (surveys show that most Gen Z consumers turn to social media platforms like TikTok and Instagram for financial advice) and both have talked about paying rent on their credit card on the platform. Neither of them works with Bilt, although they can earn points for successful referrals. Confortini estimates she has made about 35 referrals over the last year.
Daniel Heppner, a 25-year-old software developer in Seattle, also charges his $1,700 monthly rent to his Bilt card and satisfied the minimum transaction requirement by buying multiple $1 Amazon gift cards (those purchases started to get denied, so he now uses the card at restaurants and cafes). “I honestly, overall, feel like credit card rewards are just a big scam,” he said. “We’re all paying for it with credit card fees. But I’m going to take advantage of getting as many as I can as long as this is the system that we live in.” Heppner said he has about 10 credit cards and pays them off in full. “I don’t even know how worth it it is to try to maximize all of it. What are you getting, an extra $10, $20, $30 bucks a month?” The fact that rewards are funded in part by interest from people who cannot pay their bills is “really inequitable,” he said, but the way commerce works today, credit cards are “not something that I can boycott.”
For consumers who are not trying to earn rewards or cannot pay their balances off in full, charging these expenses to a credit card can indicate a financial shortfall, “and that’s certainly going on with Gen Z as well,” said Matt Schulz, chief credit analyst at LendingTree. “It’s a scary thing, especially when you consider how quickly interest rates have risen over the last year or so.” The average credit card interest rate is now 23.55%, the highest since Schulz’s company began tracking monthly rates in 2019. In the first year of the COVID-19 pandemic, there was a sharp increase in renters who were charging rent to their credit cards as they awaited emergency relief funds, according to the Federal Reserve Bank of Philadelphia. In a separate LendingTree survey, about 45% of Gen Z adults live paycheck to paycheck and 62% of people who did not have money to pay their bills have used their credit cards to cover them.