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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: supersizer/E+/Getty Images July 02, 2021 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Antonio Ruiz-Camacho is senior director of content for and . He has more than 20 years of international experience leading content teams, focused on consumer advice, technology and immigration. Bankrate logo

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At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo

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Shuttering the Propel card was confusing at first

In early June, the bank’s credit card strategy became clearer when it announced the Wells Fargo Active Cash Card. It gives 2 percent cash rewards on purchases, a $200 cash rewards bonus after new cardholders spend $1,000 in their first three months, a 15-month 0 percent introductory APR on purchases from account opening and qualifying balance transfers from account opening (a variable APR of 16.49 percent, 21.49 percent, or 26.49 percent applies after that) and cellphone protection when cardholders pay their monthly phone bills with their Active Cash card. The same news release promised a low-APR card called Reflect, which will be introduced later this year, and a new rewards card line coming in 2022. “One thing the pandemic laid bare was that the credit card rewards ecosystem has become so complicated and even irrelevant as people’s lives and spending habits changed on a dime,” Krista Phillips, head of marketing, product, loyalty and digital for Wells Fargo credit cards, said in a prepared statement. “Customers aren’t interested in complex rewards programs, and while each of our new cards offers something different, the thread that will tie them together is simplicity.”

I appreciate the Main Street sensibility

I believe in any credit card rewards strategy. But Phillips’ comments suggest that Wells Fargo isn’t looking to go toe to toe with Chase and Amex. Those two focus their credit card rewards programs around transferable points, with travel at the core. They also have lucrative co-branded card partnerships with some of the largest airlines and hotel chains. It’s possible to get a cash back card from Chase or Amex (although not one that pays as much as 2 percent on all transactions), but travel is their sweet spot. I agree with Phillips that these programs can be complicated, however, they’re hardly irrelevant. “The reports of the death of airline miles rewards cards have been greatly exaggerated,” . Consumers continued to rack up travel rewards even as the COVID-19 pandemic curtailed travel in 2020, and now that travel is bouncing back, these programs are even more appealing. Still, while free flights, hotel stays, airport lounge access and other experiential perks get more headlines, . It’s simpler and more universal. Who couldn’t use more cash, right? And not everyone loves to travel or has the flexibility and the patience to research the best deals.

Where Wells Fargo can shine

It may not get your blood pumping like a first-class flight upgrade, but cash back has mass appeal. I think there’s an opportunity for Wells Fargo to carve out a niche as a provider of credit cards that offer a solid, straightforward return on everyday purchases. I’m interested in their forthcoming low-interest card as well. We credit card fanatics get so enamored with rewards that we sometimes don’t spend enough time acknowledging that most active credit cardholders (53 percent) carry a balance from month to month, . The average credit card , so if you have credit card debt, you should prioritize your interest rate rather than rewards. This is another instance when the best advice may not be as sexy as a free stay in an overwater bungalow, but it’s really important. Please don’t pay 16 percent interest just to earn a small fraction of that back in rewards. There’s a massive market for low-interest credit cards and Wells Fargo is in a position to deliver. They can even afford to treat this as a loss-leader for some customers, given the ample cross-selling opportunities with their other products and services.

The bottom line

I’m intrigued by Wells Fargo’s new credit card strategy. Rather than trying to compete on travel rewards and other experiential perks—the Champagne and caviar of the credit card world—Wells Fargo seems to be offering a hearty mix of meat and potatoes. And a lot of people like meat and potatoes (in this case, a 2 percent cash back card with no annual fee and a low-interest card). It will take time, but this strategy could pay off for them, particularly if success is measured more holistically. They’re not going to be the number one credit card issuer anytime soon, but if they can use credit cards to amplify their larger mortgage and banking businesses, that would make a lot of sense. Have a question about credit cards? Email me at [email protected] and I’d be happy to help. SHARE: Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Antonio Ruiz-Camacho is senior director of content for and . He has more than 20 years of international experience leading content teams, focused on consumer advice, technology and immigration.

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