What $795, Rent, & Bitcoin Have in Common
Happy Wednesday, Fintech Nerds!
And greetings from Washington, D.C.!
The weather is vacillating between extremely hot and thunderstorm-y. Crypto week is proving surprisingly dramatic. And the Federal Reserve’s headquarters is indeed in the middle of a big renovation (but I didn’t see anything sinister).
Thank you to everyone who took the time to meet with me in person this week. Truly, it’s one of the best parts of this job.
Now let’s get into it.
— Alex
SPONSORED BY TRUSTAGECopy anchor linkCopied
Lenders: what if loans could pay for themselves?
In a sea of lookalike lending products, TruStageTM Payment Guard Insurance isn’t just another feature; it’s a real differentiator.
TruStage could help lenders stand out by helping to protect borrowers when life throws curveballs (job loss, illness, the unexpected) and lenders’ bottom line.
The impact? A 20% drop in charge-off costs*. More borrowers. This could bring more borrowers and a stronger, more resilient portfolio.
So lenders, what if your loans could pay for themselves?
Download TruStage’s free report to see how embedded loan insurance could make a real impact for all.
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3 BIG IDEAS FROM THE PODCAST
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In this week’s episode of the Fintech Takes podcast, I sat down with entrepreneur Matthew Goldman — payments nerd, fintech builder, and (mostly) unapologetic credit card man about town (who’s juggling 30 active cards).
We talked about why the airport lounge is full, how Bilt pulled off its unicorn-to-decacorn leap, and why AmEx is cozying up to the crypto industry.
Tune in for the full conversation here
And read below for my three big ideas...
#1: Chase Doesn’t Want You in the LoungeCopy anchor linkCopied
The Chase Sapphire Reserve annual fee jumped to $795, and the knee-jerk reaction from many in the industry was that Chase is just being greedy.
The truth, as usual, is more complex.
This isn’t just about further monetizing cardholders. It’s also about having fewer of the wrong ones, because if the product feels too rich, it probably is.
This is the hidden tension in premium cards: many of the most attractive perks (airport lounges, 24/7 concierge, priority support) degrade with every new customer.
Chase’s goal is to retain the profitable segment that views $795 as worthwhile: high-income households who carry multiple Chase products, as they utilize enough of the benefits without optimizing every dollar of card spend.
This is the credit card version of Disneyland pricing: not meant to exclude everyone, but enough to make the experience feel exclusive again.
#2: The Most Valuable Distribution Strategy in B2C Fintech May Be Rent Copy anchor linkCopied
Perhaps the hardest thing in fintech is distribution. Most wedge products never wedge, and most two-sided networks never get off the ground.
But Bilt pulled off both, based on a single, very valuable insight — millions of Americans weren’t getting rewarded for their single biggest monthly expense.
So they struck a deal with Wells Fargo to absorb the interchange fees for rental payments made on the Bilt co-brand card. That once-in-a-generation deal gave them leverage with landlords, which led to a network density (today they claim to cover 25% of U.S. apartments and have relationships with 70 of the top 100 property managers), which in turn gave them the necessary leverage to build out a broader loyalty and rewards ecosystem with local and national merchants.
Bilt harnessed their wedge to create a modern loyalty platform centered around local geography and everyday behavior. If cards are becoming embedded subscription bundles, Bilt’s real innovation is anchoring that bundle away from travel and into physical space and daily life.
Now, Bilt is expanding into mortgage servicing, working with United Wholesale Mortgage, and revamping its co-brand card strategy with Cardless (not Wells Fargo). They’ve announced a $250M raise at a $10.75 billion valuation and hinted at a $495 premium card.
#3: Crypto Cards: Retention Over RewardsCopy anchor linkCopied
Credit card rewards have been stuck in the same loop for decades: cash back, points, or miles. But the next shift is already underway, and it looks very different.
Coinbase is rolling out a new AmEx card that offers up to 4% back in bitcoin.
Sounds niche? That’s the point.
If you love bitcoin, a crypto card isn’t a gimmick; it’s how you invest with every swipe.
And it’s part of a broader move by Coinbase (and Robinhood) to turn fintech products into full-stack subscription ecosystems.
The next generation of cards isn’t competing on category bonuses. They’re competing on behavioral yield, so to speak. And the broader trend is what’s interesting here.
These companies are expanding from single-product “we do one thing” apps (e.g., only trading, only crypto, etc.) into full financial partners. Coinbase has a debit card, now a credit card, plus crypto investing and trading. Robinhood has private banking, retirement accounts, a credit card, and stock and crypto investing.
In this context, the next wave of cards isn’t trying to beat AmEx at its own game. They’re playing a different one, rewards aren’t the end goal; they’re the mechanism for building a long-term, user-centered financial operating system.
🎬 DIRECTOR'S COMMENTARY
Here’s a question that I made Matthew prepare for, but didn’t ask him (because we ran out of time): How many payment cards does PayPal offer?
The answer will surprise you.
I’ll need to have Matthew come back on the podcast so that we can indulge ourselves in a longer conversation about PayPal.
Lending Tip of the Month
For Americans living paycheck to paycheck, ability to pay is everything.
In Q3 2024, U.S. household debt reached a staggering $17.94 trillion, up $147B, per the NY Fed. Delinquencies are rising too, with 3.5% of debt now past due. (1)
Financial services has long innovated around willingness to pay—but not around protecting ability to pay.
TruStage is on the case. TruStage™ Payment Guard Insurance helps borrowers navigate financial hardship caused by job loss or disability—whether it’s peer-to-peer, personal loans, or credit cards. As for lenders, embedding Payment Guard in every loan could lower default rates and increase net interest income, too.
(1) Federal Reserve Bank of New York, Household Debt and Credit Report, October 2024
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WHAT I'M LISTENING TO
#1: Why US Banks Are Trying to Turn Themselves Into Super Apps (Odd Lots) 🎧 Copy anchor linkCopied
It’s always worth listening to interviews with former Director Chopra, although I will admit to being a bit confused by how much of this interview focused on SVB and Operation Chokepoint 2.0.
But whatever. Still worth a listen!
#2: The Superman Movie Rankings (The Big Picture) 🎧Copy anchor linkCopied
There is absolutely no connection to fintech with this recommendation. I just really like The Big Picture podcast. And I enjoyed the new Superman movie quite a bit more than I thought I would (James Gunn nailed the vibe and aesthetics of Superman, which had been sorely missing in earlier versions).
Thanks for the read! Let me know what you thought by replying back to this email.
— Alex
