A card I wrongly ignored

60

I don’t know how I missed this.  Last weekend I was at the “West Coast DO,” which was a meet-up primarily for people interested in manufacturing spend.  At the DO, there was naturally a lot of talk about the semi-demise of the old Amex Blue Cash card (see “Amex shuts down “old” Blue Cash accounts”).  During one of many enlightening conversations, one person told me that his Wells Fargo Visa Signature card gets 1.75 cents per point value towards airfare rather than the advertised 1.5 cents per point.

Wait… 

What?!

First some background: Wells Fargo offers two cards that get 5X rewards for gas, grocery, and drugstore purchases for 6 months.  One is the cash back card, the other is the Visa Signature card which earns points instead of cash.  Up until now, I’ve mostly ignored the points-based version of the card.  I had thought that points were worth, at most, 1 cent each.  If that was true, then there was no reason to prefer points over cash back.

I was wrong…

WellsFargoVisaSignature

The Wells Fargo landing page for this card, clearly shows the enhanced benefit for airfare.  They write:

  • Receive 50% more value when you redeem for airfare through mywellsfargorewards.com.2
  • 30,000 points is currently a $450 value toward airfare redemption or a $300 value toward cash redemption options.

And, the footnote says:

2. Flights must be redeemed through the Wells Fargo Rewards Program. For airline ticket redemptions, the number of Points required to be redeemed is equivalent to the ticket costs divided by .015, rounded up to the nearest whole Point. For airfare redemptions, a separate $24 per airline ticket processing fee will apply. Certain restrictions and limitations apply. See the Summary of the Wells Fargo Rewards Program Terms and Conditions and Addendum to the Wells Fargo Rewards Program Terms and Conditions for the Wells Fargo® Visa Signature® Card for further details.

Wow. This means that, for 6 months, the effective return for purchases at gas, grocery, and drug stores is approximately 7.5%.  Keep in mind, though, there is a separate $24 processing fee per airline ticket.  So, these points aren’t as great for extremely cheap tickets, but for moderate to expensive tickets, they’re apparently pretty awesome. 

Let’s look at two examples:

$150 flight

In the case of a cheap flight, the $24 processing fee is a pretty big percentage:

  • Points required: $150 / .015 = 10,000
  • Value of points = ($150 – $22) / 10,000 = 1.28 cents per point (still better than cash back!)

 

$600 flight

At the $600 price point, the $24 processing fee becomes less significant and the points approach their top 1.5 cent per point value:

  • Points required: $600 / .015 = 40,000
  • Value of points = ($600 – $22) / 40,000 = 1.45 cents per point

 

1.75 cents per point?

The person I talked with at the DO last weekend didn’t seem to know why he was receiving a better than advertised 1.75 cents per point value from his points, but of course he was thrilled to get it.  Regardless of how he lucked into this extra bonus, for the first 6 months of card ownership he is able to earn the equivalent of up to 8.75%, towards airfare, through gas, grocery, and drugstore purchases!

Regardless of whether points can be redeemed for 50% more value or 75% more value towards airfare, this is a sweet deal.  This card has suddenly moved high on my list of “must get” cards even though my Blue Cash card is still alive and kicking.

Applying for the card

It turns out that this isn’t something you can just apply for on a whim.  They’ll only approve your application if you already have an existing relationship with Wells Fargo.  And, if you open an account now (such as a checking account), I’ve been told that you have to wait at least 30 days after opening the account to apply for a card.  Also, they say that they’ll look for “continued deposits” to that new account, so make sure to make regular deposits to your new account.

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