Wall Street Journal has an interesting article on the Wells Fargo & Bilt partnership. According to their reporting the Bilt card is losing Wells Fargo as much as $10 million per month with the card as revenue driver projections made by Wells Fargo were inaccurate. Some key notes:
- Wells Fargo is paying Bilt $200 for every card approved
- Wells expected that around half to three-fourths of dollars charged to the card would carry over from month to month, generating interest charges. The reality ranges between around 15% and 25%
- The bank assumed around 65% of card-purchase volume would be nonrent, generating interchange-fee revenue. The reality is inverted.
- Wells Fargo pays Bilt 0.8% on each rent transactions and doesn’t earn interchange fees on these transactions
Wells Fargo & Bilt are currently renegotiating the contract and have been for months. I’m not surprised that this isn’t generating as much revenue as expected as it’s largely been pushed in the savvy points and miles community. I assume this is partly why Bilt announced changes. It’s hard to know if it’s worth speculatively transferring as Bilt has offered larger transfer bonuses in the past but I don’t expect a lot of positive changes ahead for Bilt.
