Who are they?

In 2001, the Wachovia Corporation was born through the merger of Wachovia and First Union banks. Today, the company operates over 3300 offices in 23 states. Wachovia offices can even be found in Nassau, London, Georgetown and the Grand Cayman. With 15 million customers and $450 billion in deposits, Wachovia ranks as the fourth largest holding company. Its unique name is a derivative of Wachau, which was the name given to a group of early North Carolina settlers.

Earlier this month, Robert Steele, a University of Chicago graduate and former U.S. Department of Treasury under secretary, was brought on to take over the role of CEO. The position was vacated by Ken Thompson, who retired in the beginning of June.

In the news

Wachovia has been experiencing some financial instability in recent quarters. One year ago, Wachovia (WB) shares were trading for $50 each. On July 15^th of this year, shares were barely selling for $10. However, as a sign of good faith, CEO Robert Steele invested over $16 million of his own money in Wachovia one million shares of stock. You can chalk this up to either insiders’ knowledge or optimism about good things to come. Despite Mr. Steele’s hopefulness, Wachovia stock is still on many do not buy lists.

On the same day Mr. Steele purchased the shares, Wachovia announced the elimination of at least 10,000 positions. In the same announcement, the company reported that it will be reducing dividend payments to 5 cents per share.

In other news:

Wachovia’s will soon be in search of a new CFO. Tom Wurtz, the current CFO, is expected to resign from the position soon.

The state of New York filed a suit against UBS amidst accusations of fraud and deceptive marketing practices. Wachovia may soon find itself in the same predicament. Missouri’s Secretary of State office searched Wachovia offices looking for evidence resulting from similar allegations.

And aside from its financial troubles, Wachovia can also be a dangerous place to work. In the past month there has been story, after story, after story, after story (and many more) of armed heists at branch locations.

The card

The basics

• For new accounts, an introductory APR of 0% on balance transfers for twelve months
• Depending on the level of the credit card account (classic, platinum, etc.), APRs range from as little as 6.99% to 16.99%
• Annual fee – depending on the card the annual fee is either zero or $29
• 25 day grace periods
• Tier structured late fee of $15, $29 or $39 depending on the card balance
• $20 over the limit fee
• 1% currency exchange fee

The extras

• Membership in the Wachovia Possibilities Rewards program
• One late fee and over the limit fee will be automatically waived every 12 month period
• Can be link to your Wachovia checking account for free overdraft protection
• A one percent reduction in APR for Wachovia employees

My take

As far as credit cards go… I like Wachovia. The terms are reasonable and the perks are nice. There are three things that really stand out about the card. First… the tiered late fee structure. Most credit card companies sock you with a $39 fee even if your card balance is $1. Secondly, the over the limit fee is one of the lowest I’ve see. The norm is somewhere between $29 and $39.

And finally, automatic fee forgiveness every 12 months is an attractive deal. Most companies will waive the fee every so often if they see that this is not your typical m.o. However, you have to call and ask for the waiver. The rep has to put you on hold to discuss the situation with the manager. The manager has to lecture you about being late or over the limit. Then they may or may not ok it. In other words, it can sometimes be a hassle to get the fee waived. But Wachovia does it automatically.

My take: I would be hesistant about recommending that you buy $16 million worth of Wachovia stock, but their credit card is a good bet.