Wells Fargo, making a stronger push into the credit cards business, has introduced one of the most compelling flat-rate credit cards on the market. The Wells Fargo Active Cash Card offers 2% cash back on all purchases, with an annual fee of $0, a generous sign-up bonus and a 0% APR offer.

The card’s bonus and simplicity separate it from other cards offering 2% cash back or more on all purchases, making it a near-ideal foundational card for the wallets of consumers who pursue credit card rewards.

The card will be available starting in July. Wells Fargo also teased another new card, with a low interest rate, to fit into a portfolio of upcoming new Visa credit card releases from the megabank.

Wells Fargo Active Cash Card details

  • Annual fee: $0.

  • Rewards: Unlimited 2% cash rewards on purchases.

  • Sign-up bonus: Earn a $200 cash rewards bonus when you spend $1,000 in purchases in the first three months.

  • Interest rate: Variable APR of 14.99% to 24.99%.

  • Perk: Cell phone protection when customers pay their monthly cell phone bill with their Active Cash Card. (Protection is secondary to your other insurance that might apply, such as homeowners or auto insurance.)

  • Foreign transaction fee: 3%.

  • Intro 0% APR offer: 0% APR on purchases and qualifying balance transfers for the first 15 months from account opening.

  • Balance transfer fee: A balance transfer request must be made within 120 days from account opening to qualify for the introductory APR. A balance transfer fee applies: either $5 or 3% of each balance transfer, whichever is greater, for 120 days from account opening. After that, a different fee applies: up to 5% for each balance transfer, with a minimum of $5.

Beginning July 1, 2021, applications for the card will be available.

A spokeswoman declined to identify the credit rating needed for approval, but said the bank considers a variety of factors “not limited to the customer’s credit score and income.”

How to get your cash rewards

Cash reward redemption options include:

  • Statement credit.

  • Wells Fargo ATMs in $20 increments using a Wells Fargo debit or ATM card.

  • Direct deposit into a Wells Fargo savings or checking account.

  • Mailed paper check.

Quick take: Active Cash Card vs. competitors

Some premium credit cards offer higher bonuses, more perks and better rewards rates on some types of spending. But among direct competitors offering flat-rate cash-back rewards for no annual fee, the new Wells Fargo Active Cash Card is a serious contender. Here’s why.

The most direct competitor and a longtime leader in the class is the Citi® Double Cash Card – 18 month BT offer. It also offers the equivalent of 2% back: 1% when you purchase and 1% when you pay it off. However, it lacks a sign-up bonus. The $200 sign-up bonus of the Wells Fargo Active Cash Card is equivalent to 2% rewards on $10,000 in spending — a significant value boost.

Also unlike the Citi Double Cash, the Wells Fargo card has cell phone insurance and a 0% APR offer on purchases for 15 months. (The Citi card has a slightly longer 0% APR offer on balance transfers, but none for purchases.)

The Apple Card has a 2% cash back component, but only on purchases made via Apple Pay mobile payment on iPhone.

A minor knock on the new Wells Fargo Active Cash Card is that it carries a foreign transaction fee of 3% of the purchase price. That makes it a poor choice for making purchases abroad. However, several of its direct competitors also charge a foreign transaction fee.

Why this card is a big deal

A good flat-rate card is a primary component of a multicard strategy that many savvy customers use with rewards credit cards.

Flat-rate 2% cash-back cards are ideal for pairing with a card that features bonus categories — areas of spending that offer more than 2% cash back. Examples are spending at restaurants, supermarkets, gas stations and travel or entertainment vendors.

The idea is you would use the cards in tandem: Use the bonus-category card for its categories and the 2% card for everything else.

Alternatively, people who want to keep it simple might use a 2% cash-back card for everything.

New Wells Fargo lineup of cards

Wells Fargo said the new Wells Fargo Active Cash Card is just the first in a new lineup of Visa cards it will be offering.

Later this year, it will offer a low-APR card, called Reflect, the bank said. A new rewards card line will come in 2022.

Like the Wells Fargo Active Cash Card, the new cards will try to keep it simple.

“One thing the pandemic laid bare was that the credit card rewards ecosystem has become so complicated and even irrelevant as people’s lives and spending habits changed on a dime,” said Krista Phillips — head of marketing, product, loyalty and digital for Wells Fargo Credit Cards — in a statement.

“Customers aren’t interested in complex rewards programs, and while each of our new cards offers something different, the thread that will tie them together is simplicity.”

A spokeswoman wouldn’t comment on which current Wells Fargo credit cards might be discontinued. “We’re currently evaluating our existing consumer credit card offerings and have paused acceptance of new applications for some cards on certain channels,” she said.

New emphasis for Wells Fargo

Wells Fargo has not been among the top-tier credit card issuers, a step behind the likes of Chase, American Express and Citi. Wells Fargo rated below many competitors in the J.D. Power 2020 U.S. Credit Card Satisfaction Study.

“The fact is, our card propositions are not (as) competitive (as) what is available today in the marketplace or where people are going,” Wells Fargo CEO Charles Scharf conceded during the bank’s quarterly earnings report in April.

The new portfolio of credit cards is a sign that the new management at Wells Fargo aims to change that.

Mike Weinbach, Wells Fargo’s CEO of consumer lending, said the new cards “lay the foundation for Wells Fargo’s arrival as a cards competitor to watch.” He added that the bank will also make a push into co-branded credit cards, similar to the 2020 release of a Hotels.com credit card.

Information related to the Wells Fargo Active Cash Card has been collected by NerdWallet and has not been reviewed by the issuer or provider of this product or service.

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