Wachovia Reenters Credit Card Market with Promise of Fewer Penalties, Generous Rewards
Wachovia Corp. is set to return as a major credit card issuer next week, and the company is promising lower rates, fewer penalties and generous rewards to compete for space in consumers’ wallets.
Among the perks: automatic waivers of one late fee and one over-limit fee each year, the combining of credit and debit transactions in one rewards program, and the promise of less aggressive repricing for accounts that have minor breaches of the cards’ terms and conditions. Wachovia will offer three new credit card products–Wachovia Classic, Wachovia Platinum and Wachovia Signature.
Wachovia is attempting to position its new offerings as more consumer-friendly than other issuers’ cards, some of which have received bad press for aggressively penalizing cardholders for relatively minor infractions. Complaints from consumers have included late fees for payments that arrive on the due date but after the time-of-day deadline and interest rates that drastically increase after a single late card payment, or even for late payments on bills completely unrelated to the credit card itself.
Wachovia says it will not reprice an interest rate unless a customer has two consecutive payments past due three times or three consecutive payments past due in a 12-month-period. Wachovia’s Possibilities Rewards program sounds relatively unique for most cardholders. It allows cardholders to choose between debit and credit card transactions, while still receiving all the reward points in a single account.
Wachovia chose to re-enter the credit card issuing market after its previous partner, MBNA, was acquired by Bank of America. MBNA had been issuing Wachovia-branded credit cards since 2000. Bank of America will continue to own the customers who signed up for those cards, but Wachovia hopes that they will have the desire to stick with the brand they put their initial trust in and will thus choose one of Wachovia’s new offerings.
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