Wells Fargo Home Rebate Card Review

A great idea, but how long are you willing to wait for your rebate?

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The rewards on this card are credited to your mortgage. That may not be immediate enough for many people.

 

Who the Wells Fargo Home Rebate Card is For

 

  • People with a Wells Fargo home mortgage who want to pay the loan off early.

Credit Rating Required

  • Fair and up (660+).

 

About the Wells Fargo Home Rebate Card

 

Pros

  • Generous rewards.

Cons

  • Very long gratification period.
  • Somewhat complicated.
  • You must have a Wells Fargo mortgage to qualify.
  • You may lose your reward if Wells sells your mortgage.

Rewards

  • 1% back on spending, credited to your Wells Fargo mortgage loan.

APRs

  • 0% on purchases for first six months, then 12.15 to 22.15% depending on your credit history.
  • 3.9% on balance transfers for first six months, then the purchase rate.

Fees

  • No annual fee.
  • Balance transfer fee: 3% of balance during the introductory period, otherwise 5%.
  • Late payment fee: Up to $35.
  • Returned check fee: Up to $35.

 

Wells Fargo Home Rebate Card Review

 

The concept behind the Wells Fargo Home Rebate Card is a good one. You earn a 1% rebate on your spending, which is used to pay down the principal amount on your mortgage. That can turn into some serious money over time - actually more than twice the reward you would get on a conventional 1% cash-back card.

Here's an example from the calculator on Wells' website: Let's assume you have a $200,000, 30-year mortgage with a 5% interest rate.

If you charged $1,000 a month on this card for 30 years, you would reduce your mortgage payments, including principal and interest, by more than $8,000. By comparison, if you did the same amount of spending on a 1% cash-back rewards card, you would earn only $3,600, a difference of more than $4,400.

Wells credits your mortgage principal amount every time you reach $2,500 in net purchases. There's no limit on the rebates you can earn.

So what's the problem? First, you're delaying gratification until you pay off your mortgage. For most people, that date is so far in the future it almost loses its meaning. Most people would rather get a rebate or statement credit every few months.

But there's a more serious problem. Only mortgage loans held in Wells Fargo's name are eligible. More importantly, if Wells ever sells your mortgage - something beyond your control - you stand to lose your entire rebate. You wouldn't know this unless you read the fine print. Banks sell their mortgages to other companies all the time. That's a gamble you can't afford to take.

 

Recommendation

 

The idea behind this card is excellent. I can't recommend this card because you stand to lose your entire rebate if Wells sells your mortgage. That can mean a lot of money lost to you if that happens somewhere down the road.

If you're interested in using your credit card rewards to pay down your mortgage, the Bank of America Power Rewards Visa Card and the Bank of America Cash Rewards Visa Card both allow you to redeem your rebates to pay down your mortgage, even if it isn't a BofA mortgage.

 

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