The Wall Street Journal, June 16, 2024, Wells Fargo Bet On A Flashy Rent Credit Card. It Is Costing the Bank Dearly.
When Charlie Scharf took over as CEO of Wells Fargo WFC 0.08% increase; green up pointing triangle, one of his priorities was to expand the bank’s credit-card business. Now, a flashy partnership with a startup is complicating a high-profile part of that strategy.
In 2022, Wells launched a credit card with Bilt Technologies, a fintech startup with big-name backers including Blackstone and Mastercard. The co-branded card came with a rare perk: Users can pay for rent with it without incurring fees from their landlords while also earning rewards points. More than one million accounts were activated in the first 18 months, many by young adults.
But Wells is losing as much as $10 million every month on the program as savvy customers flock to the card, according to current and former employees. Executives made internal projections on key revenue drivers, such as the likelihood that cardholders would carry balances, that turned out to be inaccurate.
