Executive Summary -
This is Wells Fargo's cash back offering in their portfolio line up. It is a great improvement over their previous version. At it's core, it offers a base rate of 1% cash back for all purchases (which really does not compare well with the better cards in the market).
The Wells Fargo Cash Back Visa has changed its cash back formula. It now pays 1% rebates for cardholders. This is a huge improvement over their old rebate formula. Back a couple of years ago, this card was perhaps the worst cash back credit card that I have reviewed. It has a tiered rebate formula that requires you to spend above $450 within a billing cycle before you can even earn 1% rebates. But even with this new improvement, is this enough to earn our recommendations?
Rebate Formula - The Well Fargo Cash Back Card pays a 1% rebates for all net purchases that you make on the card. You can earn unlimited rebates with this card. This is an improvement over the old rebate formula (which I've kept here for archiving sake!).
Old Rebate Formula - The Wells Fargo Cash Back Visa previously had a tiered rebate formula which summarized in the table below.
for first $150 in purchases during billing cycle
for next $150 in purchases ($151-$300) during billing cycle
for next $150 in purchases ($301-450) during billing cycle
for purchases beyond $450 that has been charged during billing cycle
As the table above shows, the old rebate system let's you earn up to 1% cash rebate once your monthly purchases in a billing cycle exceeds $450. The first $450 purchases will earn a lower cash rebate percentage. You can earn up to $500 in cash rebates in a calendar year. You can redeem your cash rebate once you have earned $20 (in $20 increments).
Fees and Rates - There is no annual fee for the Wells Fargo Cash Back Card.
Wells Fargo Cash Back Visa Peer Comparison
The most important question really, is how does this card stack up in the competitive world of cash back credit cards. The answer, unfortunately, is not very well. Simply paying 1% is pretty average. It puts itself among other similar cards like the the Citizens Bank CashBack Platinum MasterCard, Bank Americard Cash Rewards Visa Signature and USB Flex Perk Cash Rewards. Below are some of the better cards in the market and you'll see from the comparison where this card lags.
Among the better cash back cards out there, there are really two types of cards. The first type pays more rebates (5%) on certain categories that change every three months. We call them rotating categories cash back credit cards. The second type of cards are those that simply have a couple of categories that pay more than 1%. Let's have a look at some of these cards.
Wells Fargo Cash Back Visa vs Chase Freedom - The Chase Freedom is one of those rotating categories card that offer 5% rebates on categories. It also has an online shoppint mall where you can earn anywhere between 2% and 20% rebates when you shop with their merchant partners. The Chase Freedom also pays 1% rebates on all regular purchases. The Wells Fargo Visa pales in comparison with this card.
Wells Fargo Cash Back Visa vs Discover More - The Discover More Card is just like the Chase Freedom, which means it is another "rotating category" card. It's categories is slightly different from Chase. It's shopdiscover.com online shopping portal pays betwwen 5% and 20% cash back when you shop with their merchants. Once again, the Wells Fargo Cash Back card loses out to Discover.
Wells Fargo Cash Back Visa vs Citi Dividend Card - The Citi Dividend Platinum Select Card is just like the Chase Freedom and Discover More Card. It has 5% rebate quarterly rotating categories and an online shopping mall called Citi Bonus Cash Center. Like the previous tow cards mentioned, the Citi Dividend is clearly superior to Wells Fargo.
We are now going to compare the Wells Fargo with non-rotating category cards.
Wells Fargo Cash Back Visa vs Capital One No Hassle Cash Rewards - The Capital One No Hassle Cash rewards also pay 1% rebates on all purchases. But they have gasoline as a category that pays 2%. Therefore, it is slightly better than the Wells Fargo.
Wells Fargo Cash Back Visa vs Blue Cash Everyday - The Blue Cash Everyday Card pays 3% rebates on groceries, 2% on gasoline and department stores. So here we have three categories that pay more than 1% versus the Well Fargo, which just pays 1% for everything.
Wells Fargo Cash Back Visa vs Costco Card - The TrueEarnings Costco credit card pays 3% rebates on gasoline, 2% on dining and travel. Once again, like the Blue Cash Everyday Card, you get three categories which pays more than 1% rebates. You obviously have to be a Costco member for this card to make sense though.
Wells Fargo Cash Rewards Visa - 1% Isn't Good Enough?
Verdict - Prior to this card changing their rebate formula, this is the worst cash back credit card that I have come across. Having a tiered formula where the best rebate you will get once you spend above the threshold is just 1% is unbelievable considering that even the most basic cash back card 1% rebates on all purchases, regardless of spending levels.
But even after they have changed the formula to a straight 1%, it really falls short of the numerous cash back credit cards which offers either more categories that earn more than 1% or rotating category cards with online shopping malls. I would avoid this card and consider the other cards mentioned in this review instead. Any one of them would be a better alternative.