New Wells Fargo Credit Cards to Help to Customers Cut Debt
Wells Fargo is the fourth largest bank in the United States, but it has a relatively small credit card business under its umbrella. In an effort to change that, Wells Fargo has come up with an innovative credit card that appeals to consumers’ desires to cut their debts.
Back in 2007, Wells Fargo launched the Home Rebate card, which offers a 1% rebate that goes toward the principal of a Wells Fargo home loan. Now, the bank is talking about starting similar programs for both student and automobile loans.
“The real thing customers wanted was to pay down their mortgage. That created a thought process where we asked, ‘Why don’t we offer that service for all our products?'” said Tom Wolfe, Wells Fargo’s executive vice president for consumer credit solutions.
Approximately one-third of the bank’s customers carry Wells Fargo credit cards, which is rather low for a company that boasts about selling multiple products to their customers. Wells Fargo credit cards carried a purchase volume of $66 billion in 2012, compared to top-ranked American Express at $566 billion.
The success of the new program is still to be determined. Wells Fargo estimates that a customer with a $150,000 home loan who spends $1,500 a month on his or her Home Rebate card could shave a full year off his or her loan repayment. Imagine what that could do for other loans in the future.