CHARLOTTE, N.C. (FOX 46 CHARLOTTE) – Wells Fargo is ending personal lines of credit from $3,000-$10,000.
The company said it made the decision a year ago and believes it can better meet the needs of borrowing customers through credit cards and personal loans.
“Personal lines of credit can be used for a lot of different things. It can be used for home improvement. It can be used for backing up your checking account in case you overdraft or whatever, so there is a lot of people that have it,” financial adviser with Carroll Financial Brett Boner said.
In a statement, Wells Fargo said, “We realize change can be inconvenient, especially when customer credit may be impacted.”
“If you think about it, a credit card is going to have a much higher interest rate. It might have an initial 0% 12-month plan going, but long-term a credit card is going to have a higher interest rate than a personal line of credit,” Boner said.
He said impact to credit scores should not be drastic. He estimates a 3–5 point deduction.
“People don’t want that right? If you are trying to open up a home loan or get a new mortgage, they check everything so closely these days, that anything they see like that, that is an activity like that is going to throw up a red flag for the under-writers,” Boner said.
Wells Fargo said the move does not impact commercial accounts.
It will be giving customers a 60-day notice with a series of reminders before the closer and will help customers find a credit solution.
Disclaimer: Carroll Financial and Cetera Advisor Networks are not affiliated.