My wife received a mailer today from Wells Fargo, which was pitching its newer “Cash Wise Visa Card” to her. So I decided to take a look at what this credit card offers and if it’s worth applying for.
My first thought was why anyone would accept a cash back rate of 1.5% when there are other cards that offer 2% cash back or more.
Seems like a no-brainer to pass, right?
Wells Fargo Cash Wise Card Offers $200 Sign-Up Bonus
Her particular offer, which appears to be public, comes with a $200 sign-up bonus when she spends $1,000 in the first three months. That’s a pretty low spend for a decent bonus.
Most folks can muster $1,000 over three months, meaning they can get $200 plus the cash back amount ($15). Okay, great, $215. We’re off to a good start here.
Especially since there’s no annual fee on the Wells Fargo Cash Wise Visa Card. And it comes with 0% APR on both purchases and balance transfers for the first 15 months. You also get the cell phone protection. Seems like an easy win.
But then there’s the issue of redemption, which some credit card issuers are still making difficult.
Wells Fargo Redemption Options Are Plentiful, But Minimums Required
You see, Wells Fargo will only let you cash out your rewards in $20 or $25 increments. This has always been a pet peeve of mine.
I get it, you’re trying to make the cardholder spend more so they can earn more, and then tap into their rewards.
But it’s also a bit misleading to say, here’s the money you earned that you can’t actually have unless you earn enough to hit a redemption threshold.
And such a policy will always leave a small remainder that can’t be touched, which when multiplied by millions of accounts can amount to a lot of money.
It also means the redemption rate isn’t truly what it seems if you can’t get all the money out.
Anyway, you can take out $20 if you use a Wells Fargo debit or ATM card to redeem for cash at Wells Fargo ATMs.
If you want to redeem your cash via phone or online, it is redeemable in $25 increments only. In other words, $25, $50, $75, $100, and so on.
Assuming you have $19 in rewards, you’re out of luck until you hit that magical $20 mark. This irks me.
The one coolish feature Wells Fargo does offer is the ability to apply your cash back to your Wells Fargo mortgage principal. But it only really sounds cool on the surface.
Ultimately, you could just cash out to your bank account and move that money to your mortgage. One extra step I suppose, and not a hard one.
At the end of the day, these minimums make the Wells Fargo Cash Wise Card less attractive.
This is the reason why Discover began allowing any redemption amount, even pennies. Chase has the same policy with their Ultimate Rewards.
American Express and Bank of America have policies that align with Wells Fargo, meaning they’re also behind the curve.
Wells Fargo Cash Wise Offers 1.8% Cash Back During First 12 Months
During the first 12 months, you’ll also earn a promotional cash back rate of 1.8% if you make Android Pay or Apple Pay mobile wallet purchases. It’s a 20% bump over the standard cash back rate.
There doesn’t appear to be any limit, but you do have to use your phone to make the purchases…or iPad I suppose.
In any case, the cash back rate of 1.8% still lags the readily available 2% cash back options that currently exist, which begs the original question, why settle for less?
To answer the question, you shouldn’t settle, especially if you can’t get all your cash back. That ultimately lowers your true cash back rate.
You could go with Discover it Miles, which offers 1.5% on all purchases with no minimum redemption, and double miles your first year (3% cash back rate). Or Citi Double Cash, which offers 2% cash back all the time.
Seems like those cards are the better option, right? Well, not so fast. The difference maker is that $200 sign-up bonus, which those other cards lack.
In fact, neither offers a sign-up bonus whatsoever.
At a cash back rate of 3% with Discover it Miles, it would require over $6,666 in spending to earn $200.
At a cash back rate of 2% with Citi Double Cash, it would require $10,000 in spending to earn $200.
In other words, the Wells Fargo Cash Wise Visa Card is going to earn you more cash back, despite the lower cash back rate, thanks to the $200 head start you get from the sign-up bonus.
It’s not a card I would apply for personally, but if you’re looking at a pure cash back credit card and comparing the cards mentioned, this one actually comes out ahead, at least early on.
The Chase Freedom Unlimited card isn’t far off, with a 1.5% cash back rate and a $150 sign-up bonus for spending just $500.