A Threat from Wells Fargo

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Back in February 2008, I helped Mr. A apply for a bank secured credit card so he could start building credit since he had dealt in cash for most of his life.  About one year later the card was graduated to an unsecured card and the spending limit raised from $600 to $1100.  The annual percentage rate was lowered from 24.99% to 16.99%.   We decided to use the card to buy gasoline, but somewhere along the way I decided to stop using it because it is too easy to forget we bought $100 worth of gas which didn’t come straight out of the checking account.  And the $100 in the checking account that should have been used to pay that gasoline on the credit card gets used for other things.  Those credit cards have a way of creeping up, so it’s just better not to use them at all, I’m finding.  Especially when money is tight.   We’d stopped using the card but about one year later they raised the credit line to $1600 and slightly lowered the annual percentage rate to 16.60%.

A few days ago, Mr. A received a letter from Wells Fargo in regards to this credit card.   They offered him something great, and threatened him all at once.  Here’s what it says:

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Dear Mr. Accountability:

We’ve noticed that you haven’t used your Wells Fargo Credit Card lately, so we’d like to earn your business back with this exclusive offer beginning May 1:

  1. Simply use your card
  2. Beginning May 1, 2012, use your card by June 15, 2012 and pay no interest on new purchases from May 1 to November 1, 2012.

If this offer doesn’t persuade you to use your card by June 15, 2012, we will assume that you want to keep your account open (Gee thanks).  (Here’s the kicker…) Your credit will be lowered to $1,000 and the special 0% APR offer will not apply.

If you do use your card – and we hope you will – then after November 1, 2012, any remaining balances under the special APR will revert back to your standard APR for purchases (currently 16.60%).

Remember, only one purchase is needed to keep your current credit line. Simply use your card in place of cash, checks, or other credit cards.

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Obviously this is a form letter, and they merge in the dates, amounts and phrases.  For example, “…we will assume that you want to keep your account open” versus “…we will assume you do not want to keep your account open.”  One little word changes the whole letter.

I’m tempted to buy a song from Amazon using the card for 99 cents.  It’s not like we are going to use this card, but it just irks me that they are going to decrease the credit line if we don’t use the card.

Such a weird way to do business.

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12 comments to A Threat from Wells Fargo

  • Banks are trying to generate fee income. When the card is used, the bank earns fees. I think the bank is just trying to generate more fees.

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    Mrs. Accountability Reply:

    Krants, do you think I should go ahead and buy one song for 99 cents to keep them happy? ;-)

    [Reply]

  • I didn’t even get a notice that my Wal-Mart credit card was closed due to inactivity. No letter, nothing… was a surprise to me when I checked my account the other week.

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    Mrs. Accountability Reply:

    That’s just plain rude! What are these companies thinking?

    [Reply]

  • A couple of years ago, I realized this might be a problem and I started charging small amounts to cards I normally don’t use just to keep them open. (I think I had read somewhere that credit card companies were closing cards due to inactivity and this had worried me). However, I pay off the cards before they ever accrue interest. ;)

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  • I’m not surprised by this, and I agree with Krantcents, they are trying to generate fees because less people are paying with credit cards, among other factors. I don’t have a Wells Fargo credit card, but we do have a (short term) auto loan with them, and they have an odd way of applying the extra money we send. We only have 3 months left, and I will be glad to be rid of them. I don’t particularly care for them as a bank, so I completely understand your response to the letter. I think charging a 99cents song idea is great, just out of principle! Another option is to go to Steak-n-Shake during their drink happy hour from 2-4p.m. and get a $1 sweet tea for 50cents and charge it on the card :)

    [Reply]

  • Buy the itunes song and maybe a pack of chewing gums!

    [Reply]

    Mrs. Accountability Reply:

    LOL, I should tell my husband to use the card to buy a package of his favorite Little Debbie snack. :-)

    [Reply]

  • Wow talk about a rock and a hard place. Have you thought about challenging that letter? Threatening to leave? If you are kind of stuck I agree with a few of the comments above buy something small like an iTunes purchase and stick it to the company by keeping your preferred rates and balance. Through Financially Digital I help small businesses try to build credit all the time so I know all about the crazy rates they assign to risky credit holders and new businesses, lol. Thanks for sharing!

    [Reply]

  • That’s exactly what you should do: run up a 99-cent charge and then immediately go online and pay it.

    They give you a card with the assumption that you’ll mire yourself in debt like a critter in the La Brea Tar Pits. That graceful strategy is their business plan. They asked you to charge something. So go ahead and charge something: the very minimum you possibly can get anyone to charge.

    [Reply]

    Mrs. Accountability Reply:

    Funny, I need to find that card so I can do that. LOL. Thanks for visiting and commenting!

    [Reply]

  • Definitely go the 99 cent route. In general I believe in treating all business equally, but if you charge the $1 at a corner store, chances are they have to pay some sort of basic transaction fee, plus a %. I’d bet that the rates Amazon gets on transactions are much better.

    [Reply]

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