Wells Fargo & Co. Chief Executive Officer Charlie Scharf is embarking on his biggest push to expand a major business line since taking over, launching a roster of credit cards aimed at competing with popular products from larger rivals.The first volley is the Active Cash card, offering a flat 2% cash-back rate on all spending for no annual fee, a challenge to Citigroup Inc.’s Double Cash product and a card offered jointly by Synchrony Financial and PayPal Holdings Inc. Wells Fargo will introduce a low-interest-rate card in coming months and a new rewards card line next year.Scharf, who previously led Visa Inc. and JPMorgan Chase & Co.’s retail-banking arm, is focusing on a business he knows best as he tries to reinvigorate the embattled San Francisco-based bank. Wells Fargo should have an advantage with its expansive branch network, but its customers have long picked up credit cards from more formidable issuers, such as JPMorgan, Citigroup and American Express Co. The first part of Scharf’s new card lineup is notable for its simplicity — and for stripping the bank’s stagecoach logo from its front.
“For a long time we were punching below our weight in the credit-card space,” Krista Phillips, whom the bank lured from Citigroup last year to lead marketing, product, loyalty and digital for its credit-card business, said Tuesday in a Bloomberg TV interview. “We’re focusing on not just reestablishing our brand but giving customers products of value that they can’t find anywhere else.”The firm is unusually lopsided among U.S. card issuers. It ranks No. 2 in debit cards but languishes at No. 8 in credit cards, even after revamping its Propel card in recent years, according to the Nilson Report.“Our card propositions are not competitive,” Scharf said of its credit cards in April. “Every step of the way, we think we have opportunities to make material improvements.”Wells Fargo’s cash-back card offers 2% back on all purchases. Citigroup’s offers 1% back after purchases and an additional 1% when they are paid off.Wells Fargo’s shares slipped less than 1% as of 1:34 p.m. in New York, in line with the KBW Bank Index of 24 major U.S. lenders. The stock is up 55% this year.