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Aug 7, 2013<br />
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AMERICAN EXPRESS CREDIT CARDS WELLS FARGO<br />
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By Andrew R. Johnson<br />
Wells Fargo WFC +0.19% & Co. has a new pitch for customers: American Express Co.<br />
AXP +0.07% credit cards.<br />
<strong>The</strong> nation’s fourth-largest bank by assets is<br />
joining forces with AmEx to market a portfolio<br />
of credit cards to its consumers as both<br />
companies look to expand their businesses.<br />
Wells Fargo plans to issue the new cards,<br />
which will be accepted at AmEx merchants, to<br />
the San Francisco bank’s 70 million<br />
customers, only a third of whom has a Wells<br />
Fargo credit card.<br />
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— Reuters<br />
“We have a huge amount of opportunity for<br />
growth,” said Beverly Anderson, head of<br />
consumer financial services for Wells Fargo. Anderson, a former American Express<br />
executive, joined Wells Fargo in 2012.<br />
<strong>The</strong> new deal won’t replace Wells Fargo’s relationship with Visa V +0.12% , Anderson said.<br />
Wells Fargo is trying to boost its credit-card business at a time when the industry’s loan<br />
losses are near historic lows thanks to borrowers’ good payment behavior. Chief Executive<br />
John Stumpf last month said the bank planned to expand its credit-card offerings this<br />
year in a bid to double its market share.<br />
While Wells Fargo has the largest branch network of a U.S. bank and is the country’s<br />
biggest home lender, it has a small credit-card portfolio for a bank of its size. <strong>The</strong> lender<br />
was the seventh-largest issuer of general-purpose credit cards in the U.S. with $33.6 billion<br />
in outstanding loans last year, according to the <strong>Nilson</strong> <strong>Report</strong>, a payments-industry<br />
newsletter.<br />
J.P. Morgan Chase & Co. had a credit-card portfolio of $126.5 billion last year, making it the<br />
biggest issuer in the country.<br />
“I think there’s definitely an upside for Wells,” said David Robertson, publisher of the <strong>Nilson</strong><br />
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<strong>Report</strong>. “Wells has a strong, loyal customer base so they can come in and bring a product<br />
that’s regarded as being upscale.”<br />
Wells Fargo plans to test the AmEx-branded cards in the current quarter and make them<br />
available more broadly by the middle of next year.<br />
For AmEx, the deal is a win for its business that partners with other banks to issue credit<br />
cards. While the New York company primarily issues its own cards, it has tried in recent<br />
years to get other banks to issue cards carrying its logo.<br />
In such arrangements, the outside bank issues and lends to consumers but transactions are<br />
processed over AmEx’s payments network instead of Visa’s or MasterCard Inc.’s.<br />
About 10 banks issue AmEx-branded cards in the U.S., including Citigroup Inc. and Bank of<br />
America Corp.<br />
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Comments (5 of 14) View all Comments »<br />
3:54 pm August 7, 2013<br />
JK wrote:<br />
I agree with CommodityTrader regarding Wells’ lack of any real perks that consumers can get from<br />
other card offerings. Tough to get something for nothing.<br />
In terms of some of the “commentary” on Wells as a bank in general, I say check and see what the<br />
market says.<br />
3:23 pm August 7, 2013<br />
RYANLYNCH OF ANCHORAGE,ALASKA wrote:<br />
TO;EO AND BRAE. YOU BOTH 100% RIGHT.I USE TO BANK WITH WELLS FARGO AND CARRY A<br />
CREDIT CARD FROM WELLS FARGO BUT ANYMORE.<br />
1:57 pm August 7, 2013<br />
Anonymous wrote:<br />
For me at least, it’s all about the APR and the benefits. I don’t care if it’s Mastercard, Visa, Amex or<br />
Discover. Amex and discover are sure fire no cause its not accepted everywhere.<br />
12:48 pm August 7, 2013<br />
Henry Juhala wrote:<br />
It should be the other way around. In reality, very few businesses (particularly the smaller ones)<br />
accept use of AmEx. <strong>The</strong>re is also no indication that Amex cards are now usable at all Wells Fargo<br />
branches without extra fees, though that would seem logical now. But, it still does not allow them<br />
into most of the smaller commercial establishments that don’t process Amex cards because of<br />
onerous Amex fees and policies.<br />
12:27 pm August 7, 2013<br />
EO wrote:<br />
Wells Fargo is trying to boost its credit-card business at a time when the industry’s loan losses are<br />
near historic lows thanks to borrowers’ good payment behavior. Chief Executive John Stumpf last<br />
month said the bank planned to expand its credit-card offerings this year in a bid to double its<br />
market share.<br />
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Translation: <strong>The</strong> economy scared everyone into paying down their debt and now we aren’t making<br />
any money. Time to issue some credit cards to people who really can’t afford them so we can tack<br />
on fees, charges and interest to increase our bottom line.<br />
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