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When many of us think of charge card rewards programs, we consider earning cash back, or building up miles that can be used for travel. However what if your charge card benefits went toward paying off some of your other debts? What if you could make credit card benefits that’d be used toward paying down your home mortgage or your auto loan?
That’s the concept behind the current benefits program presented by Wells Fargo. According to Reuters, Wells Fargo is rolling out brand-new credit card programs that’ll allow customers to earn charge card benefits that can be applied to the balances of their various other loans.
Back 2007, according to the Reuters article, Wells Fargo presented a charge card that offers a 1 % refund that’s used immediately to a home loan held at the bank. The excellence of that program has actually prompted Wells Fargo to expand that program to include particular customer loans as well. The brand-new credit card rewards program is made to consist of rebates towards automobile loans and pupil loans.
Keeping It All at Wells Fargo
With information from the Federal Reserve showing that charge card financial obligation has remained flat the last three years, this is a method to enhance charge card company, reports Reuters.
However, it could also serve another function. Considering that the loans eligible for the refund have to be held at Wells Fargo, it also motivates customers to keep more of their debt with Wells Fargo on top of opening a charge card account that helps them pay down their various other debts.
Banks that adopt a policy like this might reward. Not only do they encourage consumers to open brand-new credit card accounts with the guarantee of incentives that’ll help them pay off their loans, however it likewise motivates customers to consolidate their financial obligation with one institution. That can mean even more profits in interest costs for the banks.
What do you think? Would you sign up for a charge card that provided a refund on an additional loan?