Wednesday, August 7, 2013

Wells Fargo, American Express announce credit card deal

Wells Fargo will issue credit cards accepted by American Express' merchant network, the San Francisco-based bank said Wednesday.

The companies did not disclose the terms of the deal.

Wells Fargo plans to start piloting the cards in the U.S. this year, with a full launch starting in the middle of next year. Wells Fargo spokesman Josh Dunn said the bank is not disclosing the pilot markets.

The move comes as Wells Fargo has been working to grow its credit card business.

“We are trying to broaden our card offerings,” Wells Fargo CEO John Stumpf said last month in an interview with The Wall Street Journal. “We should double our share.”

The newspaper reported that 35 percent of the bank's customers are using a Wells credit card. That's up from 31 percent a year ago. But, as the newspaper points out, Wells Fargo, which "has the largest branch network of a U.S. bank and is the country’s biggest home lender ... has a small credit-card portfolio for a bank of its size."

Wednesday's announcement follows reports that Wells Fargo is planning to introduce credit cards that help borrowers reduce different types of debt, such as student and auto loans, they owe the bank.

In announcing the American Express deal, the companies pointed to their "joint history." According to a press release from American Express and the bank, Henry Wells, William Fargo and John Butterfield established the American Express Co. in 1850 to transport packages, valuables and goods. Two years later, Wells and Fargo formed Wells Fargo & Co.