You know there are still improvements to be made in the channel when the fourth largest bank in the country doesn’t accept online credit card applications from non-customers. (Update, 3 Dec.: Apparently, this is a long-standing Wells Fargo policy, not a reaction to the recent credit market; see second comment.)

Consumers applying for a credit card at the Wells Fargo website are first asked if they are current Wells or Wachovia customers (see first screenshot). If the answer is “no,” then they are out of luck. The bank won’t allow an application online (note 1). They won’t even take a secured card application.

And the bank expends little effort trying to convert these would-be applicants into deposit customers. There is no link to the online checking account app, just a small text link to the bank’s location page where customers are encouraged to look for a branch to try their luck at the new-accounts desk. 

Analysis: I understand that it’s costly to process applications when only a small portion are approved. And customer ill-will generated by credit declines is also bad for the brand (something that I’ve recently had first-hand experience with).

But surely there are better alternatives than simply slamming the door on non-customers. For example, Capital One and Discover allow applicants to find out if they are on a “preapproved” list before applying (previous post). That, plus educational messages, could help slow the flood of unqualified applicants.  

Wells Fargo’s credit card application screens applicants by asking if they are current customers (link; 2 Dec. 2010 from Seattle ISP, Firefox 3.6.12)

Non-customers are uninvited to apply 
Note: Highlights are ours

 

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Note:
1. A friend in Texas told me about this earlier this week and sent me a screenshot to prove it. I thought it might be a regional thing, but I got the same message when I tried to apply from my Washington IP address. And I am a Wells Fargo customer, so they must not be consulting cookies when delivering this message.