If you use Flex or Livble to break your rent into two or four payments, you’re paying up to $50 a month for the privilege of paying a bill you already owed. On a $1,000 rent that’s a 5% surcharge every cycle, and $600 a year that used to sit in your account.
That’s a bad deal. Rep. Maxwell Frost, a Democrat from Florida, sent Consumer Financial Protection Bureau Acting Director Russell Vought a letter on July 1 asking the bureau to look at rent-now-pay-later companies, which he says “more closely resemble repackaged payday loans” than the “innovative” products the industry markets (AP via Washington Times). The CFPB, being wound down under the current administration, didn’t immediately respond.
You don’t need a federal agency to score this one for you. Here’s what the product actually does.
A rent-now-pay-later app pays your landlord the full rent on the first. You then pay the app back over the month, in two chunks of $500 or four chunks of $250 on a $1,000 rent. The app charges you for the service. The Associated Press reported earlier this year that users pay as much as $50 a month for it. Two named products in the space are Flex and Livble. Affirm has run limited bimonthly rent experiments. Bilt is a separate rewards card, not this product.
Do the math the way a lender would. A $50 fee to borrow $500 for two weeks works out to about a 10% cost over two weeks. Annualized, that’s well into triple digits. Payday lenders charge that kind of rate and get called payday lenders. Rent-splitting apps charge that kind of rate and get called fintech.
Translation: you’re borrowing at a payday rate to pay a bill you were always going to pay. Dumb math.
Do this today. Cancel the auto-schedule inside the app so you don’t get billed for another cycle. Then call or email your landlord and ask for a written grace period to the 5th or the 10th of the month. Most landlords will grant it to a tenant who pays. It costs nothing and it solves the same timing problem.
If you actually need bridge credit, use a real credit product with a real disclosure. A 0% APR intro credit card gives you 12 to 21 months at zero interest on purchases, one time, not every rent cycle. We track the current picks on our best 0% APR cards page. If you’re in genuine hardship, a HUD-approved housing counselor is free and can talk to the landlord for you.
File this away for the CFPB question. Even in the unlikely case that the bureau opens an investigation and later forces refunds, that money is years out. The $50 fee is on you this month. Cancel now.
How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.