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A brand new rewards card from Rocket Firms incentivizes first-time homebuyers to decide on Rocket Mortgage when financing their residence, letting them earn rewards factors on bank card purchases that may be redeemed to cowl as much as $8,000 in down cost and shutting prices.

“On daily basis, shoppers faucet their bank card to refill their fuel tank, top off on groceries or pay for any variety of different purchases,” stated Rocket Cash CEO Haroon Mokhtarzada in an announcement Tuesday. “Now, these transactions can unlock the dream of homeownership for thousands and thousands of shoppers throughout the nation.”

If there’s a catch to the brand new Rocket Visa Signature Card, it’s not simply the excessive rates of interest on balances — a typical function of rewards playing cards. Based on the cardboard’s phrases, customers can pay an annual proportion fee (APR) of not less than 20.49 % in the event that they carry a steadiness and as much as 30.49 % relying on their creditworthiness.

However Rocket Visa Signature Card prospects may also discover that their rewards factors are price significantly much less in the event that they finally determine to finance their residence buy with a lender aside from Rocket Mortgage.

Based on the brand new bank card’s web site, prospects who redeem factors towards their down cost and shutting prices on a Rocket Mortgage mortgage will earn the equal of 5 % money again. In the event that they’re already making funds on a house mortgage serviced by Rocket Mortgage, rewards card prospects can earn the equal of two % money again when redeeming their factors to pay down their mortgage steadiness (having a mortgage that’s serviced by Rocket additionally relieves them from having to pay the cardboard’s $95 annual payment).

But when Rocket Visa Signature Card prospects need to use their rewards factors to pay down their bank card steadiness, they’ll obtain an announcement credit score equal to 1.25 % money again.

“The Rocket Visa Signature Card is positioned to convey extra homebuyers to Rocket and strengthen Rocket Mortgage’s already sturdy model loyalty,” the corporate stated in asserting the launch of the brand new card. Rocket Mortgage loved a 93 % shopper retention fee in 2022, the corporate stated, “a fee unmatched amongst mortgage firms.”

Rocket’s fintech technique

The brand new Rocket Visa Signature Card — which Rocket CEO Jay Farner hinted at in February on the corporate’s fourth-quarter earnings name — is a part of Rocket Firms’ technique to develop its enterprise by repositioning itself as a fintech platform able to unlocking the “lifetime worth of the shopper” by cross-marketing services.

Supply: Rocket Firms February 2023 investor presentation

Whereas offering residence loans by means of Rocket Mortgage is Rocket’s greatest enterprise, it additionally helps shoppers line up actual property companies, private loans, used automobiles and rooftop photo voltaic techniques by means of subsidiaries Rocket Properties, Rocket Loans, Rocket Auto and Rocket Photo voltaic.

On the coronary heart of the fintech technique was Rocket’s 2021 acquisition of Truebill, a private finance app based by Mokhtarzada that tracks spending and helps customers funds and increase their credit score scores.

After buying Truebill for $1.27 billion, Rocket rebranded the corporate Rocket Cash in August and linked the private finance app to the remainder of the Rocket platform, permitting Rocket to market mortgages and different companies to customers.

Final fall, Rocket launched a loyalty program, Rocket Rewards, aimed toward producing extra enterprise for Rocket Mortgage by permitting potential homebuyers to earn reward factors by studying instructional articles, watching movies, or utilizing a mortgage calculator to avoid wasting as much as $10,000 on their closing prices.

Whereas Rocket posted a $493 million fourth-quarter loss as rising rates of interest crushed its worthwhile mortgage refinancing enterprise, executives reassured buyers in February that the corporate is poised to make extra loans to homebuyers.

“Rocket Cash supplies us with a definite aggressive benefit by buying shoppers for lower than $100 per shopper,” CFO Brian Brown stated on a Feb. 28 name with funding analysts. “In distinction, the mortgage business acquires a closed shopper for 1000’s of {dollars}. We see super alternative to decrease our shopper acquisition prices by buying shoppers by means of Rocket Cash.”

On the identical name, Farner famous that by the tip of 2022, Rocket was managing 25.4 million shopper accounts with Rocket Cash driving “a big quantity” of progress. Farner stated that since launching in October, the Rocket Rewards loyalty program had enrolled greater than 1 million shoppers who had redeemed a complete of $600,000 in factors to decrease their closing prices when taking out mortgages with Rocket.

“Dan Gilbert used to say, you’ve received to hold across the hoop,” Farner stated. “We’ve received to be current with that shopper as they undergo the three to 4 to 5 months to search out the best residence. And all the applications that we’ve constructed enable us to hold across the hoop, serving to that shopper till they’re prepared to purchase.”

Whereas Rocket “actually may help somebody who must promote their residence and purchase a brand new one — and we’ve received applications coming that may even make that higher — our focus by means of Rocket Cash, particularly, is to get to the one that is the first-time homebuyer,” Farner stated.

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Electronic mail Matt Carter