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Advancing into the credit cards business, Wells Fargo & Company WFC has announced a range of new Visa cards, with the first one in its new consumer credit card portfolio, the Active Cash Card, poised to launch next month. The company will also roll out a low-APR card — Reflect — later this year and a new line of reward cards next year.
Amid the complex card reward ecosystem, Well Fargo’s Active Cash Card will offer a flat rate of 2% cash rewards on purchases for no annual fees, without any minor catches. With this, the company aims to simplify its products and services offered to customers.
While the other three banking giants — JPMorgan Chase & Co. JPM, Bank of America BAC and Citigroup C — have a decent presence in the consumer business, the move indicates Wells Fargo’s renewed focus on credit cards, which is likely to play a key role in the bank’s transformation.
Per management, “we are pleased to mark a new era in Wells Fargo Credit Cards with the arrival of the Active Cash Card, the first in our new portfolio of Visa cards.”
In fact, consumer credit card offerings aside, Wells Fargo is cementing its foothold in the co-branded credit card space. Last fall, the company issued and serviced Hotels.com’s first-ever credit card — the Hotels.com Rewards Visa Credit Card, which offered travel rewards to customers on their spending.
Shares of this Zacks Rank #3 (Hold) company have jumped 56.9% over the past year compared with the industry's growth of 54.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Markedly, Wells Fargo has been making moves to concentrate on businesses core to its consumer and corporate client base, while divesting stake in less attractive ones. In fact, in March, the company inked a definitive agreement to sell its Corporate Trust Services business to Australia-based Computershare Limited for $750 million. The transaction, likely to close in the second half of 2021, is subject to customary closing conditions.
Also, in February, it signed a deal to divest its asset management business to private equity firms GTCR LLC and Reverence Capital Partners, L.P. The transaction has been valued at $2.1 billion and is expected to close in the second half of 2021.
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