May 6 Wells Fargo & Co, trying to
increase its credit card market position, said it is issuing two
new credit cards through a partnership with American Express Co
in its latest effort to woo more wealthy customers.
The new cards, called Propel 365 and Propel World, offer
rewards to consumers who are either big everyday spenders or
frequent fliers and who also have another account with Wells
Fargo. Cardholders can get up to an extra 50 percent increase in
their reward points each year depending on the size of their
other accounts at Wells Fargo.
Wells Fargo is looking to bulk up its credit card business,
where the bank believes it punches below its weight. It is one
of the largest U.S. mortgage and auto lenders, but has a weaker
market position in credit cards.
The San Francisco-based bank currently captures only a
sliver of affluent consumers' spending. A Wells Fargo executive
said in a November investor presentation that around 3 percent
of consumers who charge over $100,000 annually on their credit
cards do it through a Wells Fargo product.
"We know we're underpenetrated in this customer base, and
we're looking to build our share," Beverly Anderson, the head of
Wells Fargo's consumer financial services group, told Reuters in
It's a customer segment where Wells Fargo has some catching
up to do. The head of JPMorgan Chase & Co 's credit card
business, Eileen Serra, said at the bank's February investor day
that over half of affluent consumers in the market for a new
credit card would consider going with Chase primarily. Wells
Fargo did not appear on a slide in an accompanying presentation
comparing Chase's popularity against rival issuers.
Wells Fargo announced its agreement with American Express in
August 2013. Since the third quarter, the company had been
testing its new offerings in five pilot markets around the
In another bid to boost its credit-card business, Wells
Fargo said in April it would issue and service credit cards for
department store Dillard's Inc.
(Reporting by Peter Rudegeair; Editing by Bernard Orr)