Wells Fargo is shutting down personal lines of credit, what does that mean for you?

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Do you have a Wells Fargo line of credit and you’re paying on the line of credit each month and also drawing or taking money from it. It looks like Wells Fargo is no longer offering the product (line of credit). Though in all likelihood, they’re not going to be letting customers borrow from their line of credit, they will surely expect that payments be made on those lines of credit. Wells Fargo sets a precedence by no longer offering lines of credit, and this may mean that times are changing and  that other financial institutions may close their lines of credit. 

 

For most individuals, they’ll continue to make those payments on those line of credit monthly. For others who may also have other debt or are using money from that line of credit to pay on the debt that they did have, this will pose a problem. Wells Fargo isn’t the only bank with this problem. Financial institutions or anyone offering lines of credit, credit cards marketed towards consolidating debt, debt consolidation, or making your debt more streamlined to a more manageable monthly payment will have this problem.

 

Lines of credit were marketed in a way to consolidate the debt that you have. This seems like a good idea if you had multiple credit cards and you used this line of credit to pay down all that debt or pay it off, so you only have one creditor with (at the time) a manageable monthly payment. It’s a bad idea if this means that it’s given you one big amount to pay back (and the interest that’s tacked on) when you may have been better off with multiple cards (with interest), but a smaller amount owed on each card. Your overall balance consolidated will be high, and even though your interest rate is low, over time and with the possibility of missed payments, this may snowball into a higher payment that you are less likely able to afford. This may have been Wells Fargos’ problem, hence their shuttering of this product. This isn’t just a Wells Fargo problem, but it’s also your problem if you’ve worked hard to consolidate your debt, but through time of making those payments, it’s been a struggle and difficult to meet those monthly payments.

 

If you’re in the Pacific Northwest and struggling with your debt and now the closing of the line of credit has made it difficult for you to afford those monthly payments, or you just want to know your options, please contact me at (425) 559-0636 and we can go over your options (whether that be bankruptcy, debt settlement, or continue to make those payments because you are on the right path and the light is just at the end of the tunnel).

 

https://www.cnbc.com/2021/07/08/wells-fargo-is-shutting-down-all-personal-line-of-credit-accounts-.html

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