Wells Fargo & Co (NYSE:WFC) seeks to go far with credit card business
The 4th largest bank in the United States, Wells Fargo & Co (NYSE:WFC), is in expansion mode with its considerably small credit card business with a pretty unlikely strategy. It has struck a chord with customers’ dislike for debt. In 2007, the bank had launched the Home Rebate Card. This card offers a rebate of 1% that
is automatically channelized towards the principal payment on a home loan from Wells Fargo.
Changing the consumer space
This is just the first effort in line. Over the next few months, WFC is planning on rolling-out cards that offer customers with student loans, similar benefits. People who have any other kind of consumer debt such as car loans will also be eligible for such rebates. WFC’s executive vice-president for its consumer credit solutions division said that
the one thing that consumers want to pay-down are their home loans.
This was the thread of thought that the bank is working on with this particular launch. And what’s to stop the bank from launching similar services for all the other products that it has on offer?
The debt scare
We live in times where consumers are online casino deutschland wary of taking on any form of debt and the bank feels that offering card rewards such as these is a sure-shot way of promoting its credit-card business. Fed data shows that over the last 3 years, outstanding balances on credit-cards as well as other forms of revolving-credit in the U.S has stagnated.
Currently, only around 1/3rd of WFC
customers carry its credit cards. This is a paltry number for a bank that controls around 10% of all American deposits and also touts itself as one that had numerous product offerings for its customers. The time was ripe for change and Wells Fargo & Co (NYSE:WFC) is now trying to cash-in.