Because Wells Fargo only issues credit cards to customers with pre-existent banking or other relationships, we haven’t heard too much from their customers and spend little time covering their credit card or balance transfer offers. However, on the same day Bank of America declared that they would halt interest rate hikes (a few months too late, in our opinion) Wells Fargo announced that it would raise interest rates by 3% on most of its credit cards.
Wells Fargo’s decision to raise rates by 3% comes just before Federally mandated rules to curb these practices take effect-and many, many months after most of their competitors raised rates by significantly more. Back in the early spring, consumers were being hit by double digit interest rate increases as banks scrambled to adjust risk before the passage of the Credit Card Act. Had Wells Fargo raised rates while the rest of their peers were embarking on a rate hike binge, the relatively small 3% increase would have gone unnoticed, or at least escaped scrutiny. After all, compare to the 10% plus increase passed to consumers by other banks, a 3% interest rate increase seems pretty tame.
Unfortunately for Wells Fargo, they picked a bad time to increase interest rates. During the past two months, we’ve seen a dramatic decrease in credit card complaints as the nation’s largest credit card issuers stopped squeezing consumers with rate hikes. And, for the most part, this positive trend appears to be continuing with the noted exception of Wells Fargo.
Thus, while we are sympathetic to the millions of people who will likely see their interest rates increased by 3% in the very near future, Wells Fargo consumers should consider themselves lucky. In fact, they should feel very lucky, as tens of millions of other consumers endured significantly higher rate increases this year.
Hopefully, the Wells Fargo rate increase will be the last major credit card shakedown for some time to come. Hopefully.
Related Posts
- Citibank Raises Credit Card Cash Advance Fees
Citibank recently raised the fee it charges credit card users for cash advance transactions to 5% with a minimum fee of $10. This move is not surprising, as banks have been raising cash advance and balance transfer fees since the start of the Great Recession. The 1 percentage point increase by Citibank puts its cash advance [...]...
- New Credit Card Rules and Interest Rate Reductions
On August 22nd, the second phase of the CARD Act was enacted. Unlike the first set of new credit card rules that took effect in February, the newest credit card rules won’t have a huge impact on the wallets of most people. One rule limiting penalty fees will help those who accidentally (or habitually) make [...]...
- Small Business Credit Card Rate Increases
While consumers don’t have to worry about credit card rate increases, small businesses still need to closely monitor their credit card statements. Why? Because small business credit cards aren’t covered by the CARD Act, credit card companies can increase interest rates at any time, for any reason. I recently found a rate increase notice on [...]...
- How to Stop Credit Card Debt and Interest from Affecting Your Wealth
Do you have significant credit card debt? If you’re like most Americans, you do. Even if you seem to have your payments under control, do you know how much you’re really paying in interest? Over the life of your credit card debt, interest can accrue at incredible rates and influence your savings more than you [...]...
October 12th, 2009 at 12:02 pm
Are you kidding! Well’s Fargo decreased my credit limit by half. Doubled my interest rate. I’m paying $100.00 in finance fees now. compared to $40.00. The government helped them and they will do nothing for the consumer. I for one have had it with the credit card sharks. And will close my accounts and pay them off. Yeah, I feel real lucky. NOT.
October 13th, 2009 at 10:35 am
The credit card act sucks.. Banks are trying to increase APRs on as many cards as possible before the credit card rules kicks in.. Whose dumb Idea was to give 8 months to banks before they have to follow the new rules. Such rules should be implemented with 2 weeks notice.
I own 5 credit cards and in last 2 weeks 2 of them has increased my APR by 5-6 %, Eventhough my credit score is over 800 and I dont carry any balance.
October 13th, 2009 at 11:47 am
I agree. The credit card act was a big mistake, and I blame the massive rate increases that have been levied on consumers more on these rules than on the banks. The credit card act essentially changed the business model of the credit card industry and the short term results have done nothing but hurt the consumers the law was supposed to protect. In the long run, the banks will find new ways to make profits and that money will likely come from the pockets of consumers with good credit, since those without good credit stand little chance of getting access to credit.
October 13th, 2009 at 11:54 am
Linda,
This is the first such complaint I have heard. Of the major bank’s, Wells Fargo has generated very little consumer feedback (positive or negative). I was unaware of the fact that Wells Fargo was raising credit card rates more than the 3% interest rate announced. I hope others have not had similar experiences.
Note to Readers: If Wells Fargo raised your interest rate or slashed your credit limit, please share your stories so others can know what to expect from this bank.
October 13th, 2009 at 5:40 pm
Today I received a notice from Wells Fargo that raised my APR from 9.9% to a whopping 17.85%. This is utterly scandelous. I cannot pay off the full amount before November when the changes go into effect, but I will do my best to not give them one damn dime of the percent increase. Has this happened to anyone else?
October 13th, 2009 at 7:56 pm
Wells Fargo is increasing my APR by 3%, according to a letter I received today.
And it specifically says the rate increase is “not a reflection of how you have managed your account with us or your credit score.”
Jerks.
October 14th, 2009 at 9:33 am
Cynthia,
Your report definitely conflicts with the official story that came from Wells Fargo stating that there would be broad 3% rate increases. (see source article Wells Fargo Raises Credit Card Interest Rates).
Unfortunately, your complaint is the second to come in about significantly higher rate increases. In fact, these increases look similar to those enacted by most credit card companies earlier in the year.
If you were given an opt out choice, you may want to strongly consider closing the account to preserve the original rate. If you choose not to close the account, you should consider transferring your balance to a new credit card that offers a 0% apr on balance transfers. This will save you in excess of $150 for every $1000 you transfer from the 17.85% rate. You can review offers and apply for balance transfer credit cards in the main section of our website by using the navigation to your left or clicking here.
October 14th, 2009 at 9:34 am
NOTE TO READERS: If you recieve a notice in the mail informing you that Wells Fargo is increasing your interest rate, pay careful attention to any language that provides an opt out. With an opt out, you can elect to close your credit card and pay off the balance at the original interest rate. Generally, you will have 45-90 days to do so before the new rates take effect.
October 15th, 2009 at 9:49 pm
I am still steaming over a HUGE interest increase by Wells Fargo that showed up last month. I was happily using promotional aprs to pay down debt for 2 or more years on an account I have held since 1978, with I think a previous base rate of 14% when suddenly my interest shot from 6% to 17.7%!! I must have missed the notice of increase because I would certainly have declined this. I am just livid and now am looking for another home. I think credit unions are now the way to go, the commercial sector is a collection of predators who should have been sent to the depths rather than bailed out. Please do not suggest for one minute that I be grateful for this black-hearted company’s shenanigans. My revenge till transfer is going to be sending them extra $10 payments weekly to force them to spend more money processing my account than they are extracting from me by this robbery.
October 20th, 2009 at 11:04 am
Just received the letter about my Wells Fargo visa interest rate going up. I think we were at a 13% apr. They gave a range of increase which would max out at 28.95% (the top was up there, I am guessing) and we would fall in there according to our credit and experience. I think a minimum apr we could expect would be 18% which is 5% increase and hugely disappointing. They made a lot of money off us at 13% and we do carry a balance. I have been paying it down but now it will be closed. Banks make money when the card is used at the store and they make money again when customers carry a balance or incur a fee. They are looking to reduce exposure and make up for losses incurred in their investment side by killing good customers.
October 20th, 2009 at 11:05 am
Tim,
Did Wells Fargo specify your exact interest rate? This is the first interest rate increase that included a range that I’ve heard about.
October 20th, 2009 at 1:14 pm
To the author: apparently there is a groundswell of complaints coming…. just yesterday we received a form letter from Wells Fargo, on a card we’ve had for 20+ years and paid faithfully, stating that a scheduled increase was not due to anything we’ve done or not done. The rate quoted is a MINIMUM 14.65% VARIABLE. Not the “3%” quoted by the drones at the publicity office for Wells Fargo.
I immediately called and spoke to the clearly tired and peeved customer service rep, who not-so-nicely explained that ALL rates would now be variable. When I said, “how is it that our 4.90% fixed rate now goes up to 14.65% variable,” she told me “oh, your rate is actually 11%.” I replied “what are you talking about? We’ve had a low rate for years.” She told me that was merely a promotional rate, one which we’ve renewed over and over for years, due to our extremely good credit, and that our last statement, which we haven’t even received yet, contained the notice of the increase to 11% which would in turn shortly become 14.65%.
I told her we would be paying off our balance in cash, and likely closing the account, and I wished her company good luck with retaining only the customers who regularly defaulted on their obligations. In retrospect, we will pay off the balance, but will probably leave the account open and make a couple of $50 purchases every so often, as we do not wish the irresponsibility of Wells Fargo to be visited on our credit score if we close the account.
How much do you want to bet that we’ll get another form letter in the next 6 months from Wells Fargo telling us that since we don’t use our card very often, they’ll be reducing our credit limit?
And so the extermination of the middle class begins….
October 20th, 2009 at 2:04 pm
Your final statement is haunting, but it sure does feel that way. I’ve personally never heard of a special low rate a bank automatically renewed you for every year. Generally, a low rate lasts a year and its gone. Apparently, Wells Fargo really liked you, and then decided they didn’t. What a joke. You’d think they’d at least acknowledge the fact they converted your fixed rate to a variable one and not tell you a nonsense story. But what can you expect these days.
As to keeping your account open, I think that is an excellent idea. Closing the account could hurt your credit score so keeping the account active with no balance is the smart thing to do…until they decide to slap on an annual fee a few months from now.
October 20th, 2009 at 4:07 pm
Just for clarification, WF did not truly “automatically” give us a lower rate every year; we did have to call. However, we simply asked for it and got it. Because, yes, they did like us. We usually carried a balance, made them some money, but were never late and always paid more than the minimum monthly payment. Every few years, we’d pay the balance off entirely, just to be fiscally prudent. What is pathetic is how much money they will be losing overall. I’m sure we are one of thousands of families receiving the same letter. While not everyone can afford to pay off their balance and thus avoid the new rates, I’ll bet that consumers will continue to pay down debt and not incur new debt, and where on earth will WF (and their ilk) be in a year? Who are they going to make money off of? The people who charge $2k (or $20k) and can’t afford it, so they then declare bk?
And, finally, since the rate increase is tied into an index (can’t recall which one), what happens when that index goes up? How many of us could afford 30% or 40% interest on debt? WF is dooming itself into irrelevancy, at this pace.
Thanks for the info and the sympathy!
October 20th, 2009 at 4:35 pm
Teri,
It sounds like Wells Fargo used to be a good bank that treated its customers well. And now they’re starting to sound like everyone else.
You really make a good point about the variable rates. Most cards are tied to the Prime Rate, which is abnormally low right now. If, for example, the Federal Funds Rate goes up to 4%, average credit card rates will jump to around 18%. And for many, a 4% increase will bring their rates into the low to mid twenties (unless they have a Citi card, which will have 30% interest rates).
It really is a shame to hear stories like yours. I think we all put too much faith in our relationships with banks, only to rudely discover that they’re willing to bleed us dry to pay for their mistakes.
October 20th, 2009 at 5:59 pm
My girlfriend has a Wells Fargo cc, only because it was a decent balance transfer offer a couple of years ago, but the recent notice that the interest rate will go over 14% has made it time to move along. Wells is trying to keep her with an equity line of credit, at something like 7.5%, even though they have a balance transfer offer out (for new debt, I guess) of 0% for 6-9 mos., 10.65% thereafter for good credit.
Any suggestions on tactical moves to reverse the screwing?!
October 20th, 2009 at 6:52 pm
Styve,
If your girlfriend can benefit from a 0% rate for a year and reduce the debt substantially during that timeframe, then she may want to transfer the balance to a new card (you can view balance transfer offers here). However, make sure she does not transfer the balance until after her application is approved and the card arrives in the mail, as you will not know the long term APR until after that. If the long term APR is close to 14% or lower, then by all means do a balance transfer.
As to a home equity line, I wouldn’t feel confident advising on that matter. Credit card debt is unsecured. With a home equity line, she is putting her house up as collateral and there may be origination fees and other factors that could outweigh the benefits of the rate reduction.
October 21st, 2009 at 12:00 pm
Thanks for the info, BT Helper!
October 21st, 2009 at 5:37 pm
To follow up on the query and exchange above…
BT Helper makes it seem SOP that banks offering BT rates tend to make it up after the BT period with high interest. Am I reading that right?
October 22nd, 2009 at 11:29 am
Styve,
The rate always increases, usually in a range of 1 to 2 points (plus or minus) your current rate. For people that were hit with the Citi interest rate increase to 29.99%, just about any rate after the balance transfer period would be lower. But basically, banks won’t reveal the post 0% rate until after they’ve processed your application, which is why I strongly advise people to wait until their card arrives in the mail before transferring balances.
Hope this resolves your question.
October 22nd, 2009 at 5:43 pm
I received my letter yesterday. Wells Fargo of whom I have had 4 home loans one construction loan and my current home loan decided to raise my credit card rate from 11.9% which they said was a promotional rate to 21.88%. They gave me 15 days notice. My previous balance was 0.00 as of May 2009. Wells Fargo contacted me and told me they would give me a 7 month rate of 2.9% if I would use my card which I have had for 8 years. I redid my basement and placed almost $10,000 on my card assuming I would have this awesome 2.9% rate. Thank you Arvest Bank of Arkansas! Arvest loaned me $10,000 for three years for $1119.00 dollars and wrote the check directly to Wells Fargo telling them to Stick It! I am also applying for a mortgage with Arvest to replace Wells Fargo for my home loan! I have sent many of my customers to Wells Fargo in the past 20 years and will never do it again. I may post my letter at a later date after I calm down. PS. My credit score is 710.
October 23rd, 2009 at 1:24 pm
I got the letter saying they increased my APR as well. I called them to dispute it, and they said they couldn’t do anything about it. I then asked why? The rep said that it is due to increased business expense. Yeah right! They just reported record profits. Greedy SOB’s…
October 26th, 2009 at 2:10 pm
Mark,
Technically, the credit card business is a big money loser. However, you’re damn right to be angry at them, as they are turning out record profits using the free money they got from the TARP, not to mention the free money the Fed gives them everyday that should be used to stimulate lending.
October 26th, 2009 at 5:46 pm
I too received a letter and have not read it closely yet but am very disturbed by the
fact that within the last month I received Wells offers to TRANSFER other balances
to this credit card. Seems to be a bait and switch tactic which Congress ought to
outlaw and issue penalties for, making these offers so close to the increase date.
October 26th, 2009 at 6:29 pm
Citicard just raised 100% (so they say) of their cc holders to a default 29.99% no matter how good the credit score. I transferred my Wells Fargo balance to Citi because WF raised my %rate based on my history with another bank, not on payment history. At the time, I thought I was ditching the ba$tards, but now I carry over 9K in debt and I am being charged 30 points! I pay my bills! This kind of greed ought to be illegal.
October 27th, 2009 at 8:45 am
Hung Out,
You should have until November 31st to opt out of the rate increase, so if you don’t have the letter available, be sure to call them.
October 27th, 2009 at 8:47 am
Karen,
I’ve actually heard stories of people who were offered 0% balance transfers on the EXACT SAME DAY they got the opt out notices. In this instance, I think this is more of an issue of disconnect between the marketing department and the credit management department. If it weren’t, it would truly be scandalous.
October 29th, 2009 at 1:22 pm
USA should do what President Carter did and ROLL BACK
prices.
Wallmart got the idea and still ROLLS BACK PRICES
October 31st, 2009 at 12:04 am
I just received a notice stating that my interest would increase on November 30th from 5.9% to 11.65%, unless I opt out. It also has this statement: “These changes are not a reflection of how you have managed your account with us or your credit score.”
I have excellent credit, but had just recently put a large purchase that I plan on paying off over a three month period on this card rather than my other card, which is at 8.4% interest. Looks like I should have put the purchase on the other card. I am going to call Wells Fargo and request that they keep the interest at the same level. If they cannot work with me, I am going to opt out of the interest increase.
Something else of note for all of you thinking about opting out. It’s not always the best choice, but opting out does not necessarily mean closing your account. It simply means you are choosing not to use the card again. The credit grantor may or may not choose to close your account permanently. Most often they do, but this is a special circumstance, mass opting out. Maybe they will leave it open and then after the credit act has passed, those who have opted out will be able to call them and ask that the account be re-opened at the pre-Nov 30 rate.
That’s my plan anyway.
October 31st, 2009 at 5:37 am
Can BOA change my fixed interest rate to a variable one on an unsecured line of credit and NOT give me an opt-out option? I called last night and they said they didn’t have to give me one, and there was no “opt out” language in the letter they sent me. This was supposed to be a fixed payment loan for the term of the loan. But I guess I shouldn’t be surprised- they never sent me any paperwork on the original loan, even though I asked MANY times. But then I got complacent…
November 1st, 2009 at 1:48 pm
Unfortunately, they can if they built a loophole into the contract. This type of action is extremely unfair, but usually the legal department clears these things, which is why they are doing these things. If they raise your rate too high, consider doing a balance transfer and work on paying down the debt asap.
November 1st, 2009 at 1:51 pm
Robert,
If it makes you feel better, you still have a great interest rate. Many people in your situation are getting offered rates in the high teens. And lest we forget Citi customers who are getting offered 29.99%!
I think you make a good point. An opt out can hurt credit scores and poses a problem for people with just one card. But in a few months or a year, the companies that burned us will be asking us for our business back. And after everything they’ve done, they’ll need to offer better rates than before.
November 1st, 2009 at 1:54 pm
Choppper,
Not a huge fan of Walmart or Jimmy Carter, but credit card rates really should be rolling back and not up to their highest legal limits.
November 6th, 2009 at 6:01 pm
Mine is only going up 1.5%
I haven’t the slightest idea why the numbers on this thread are so different…
November 9th, 2009 at 12:01 pm
In all likelihood its a result of risk based pricing. Credit card companies use models to determine the likelihood of default and base this on numerous factors. You’re one of the fortunate few that seems to have escaped the large increases.
November 10th, 2009 at 12:31 am
I have been a Wells Fargo customer for a very long time. I never miss a payment, am never late, and always pay more than the payment due. They more than doubled my rate from 5.9 percent to 12.9. I asked why and they said it was so they would not fail as other banks have. I am closing the account and am trying to find what is the best type loan to take to pay it back. I am looking for another bank. I love the people at my bank as they are helpful and very efficient, but I obviously do not want to take such abuse as this rate scam from the corporate offices. The employees at the bank told me their interest rate was higher than mine. I think that is disgraceful!
November 10th, 2009 at 11:55 am
Linda,
Unfortunately, 12.9% is a good rate these days, though obviously a joke compared to 5.9%. If you are carrying a high balance, consider a card that offers a 0% balance transfer deal for a year and use that time to pay your debts down as quickly as possible. If you don’t owe a bank money, you don’t have to worry what your interest rate is. You can compare balance transfer offers in the main section of Smart Balance Transfers.
November 12th, 2009 at 3:07 pm
You wrote, in response to Christa, that her small rate increase is likely the result of “risk based pricing.” Yet, as I pointed out in my earlier posts, we have nearly perfect credit scores, own our own home, have almost no debt (a car loan at 0% because Toyota at least recognizes we’re good risk), a very large savings account, and longstanding employment. And still WF sent us the form letter stating our rate would increase from 4.90% fixed to 14.65% variable, as I noted above.
So how do you reconcile your responses to me and to Christa? You don’t even know what Christa’s rate started at- she could’ve been at 9% or 10% already…. so now all of a sudden the rest of us posting here are credit risks?
I don’t think it has anything to do with traditional “risk based pricing.” If it did, we’d still have our 4.90% rate, as there is zero chance of us defaulting. The day after I last posted here, WF posted record gains. The rate increases are because the good (or great) customers need to be squeezed harder to pay for the irresponsibility of those now receiving a bailout (or who are defaulting).
So I respectfully disagree with your statement to Christa.
November 13th, 2009 at 10:01 am
Teri,
You are right to pose an objection, as I re-read my response and noticed I was unclear. The term risk-based pricing is tossed around by banks as an excuse to raise rates and covers everything from individual risk to interest rate risk. In cases where people have pristine credit, the bank is mitigating against the risk that comes from the fact that they cannot raise rates arbitrarily after February. Thus, the risk has less to do with the person than with the lending environment.
I also don’t want to give the impression I agree with this. Its just become an unfortunate post finanancial meltdown reality.
February 12th, 2010 at 10:02 pm
I need advise from someone please.
Wells Fargo is going to raise my interest rate from 1.9 promotional which I have had for 1 year and will expire this year. I called to get it extended and they refused. They will raise it to 22% making my payments from 330 to 780.00 which I cannot afford because I was layed of 2 months ago. My interest a month will be 500 dollars! I don’t know what to do. I have home ownership and cannot file for bankruptcy because i have my home as an asset and do not want to take out a home equity loan. Who can advise me please? I am desperate. ..
February 13th, 2010 at 4:07 pm
Rod,
Ordinarily, the best option would be to do a 0% balance transfer. With your credit score, you should be able to get a 0% for a year. This should bring your payments down and help you chip away at the debt.
If you can’t get a 0% balance transfer credit card, you should strongly look into credit counseling. Basically, they work with your banks to get your rates lowered. It might not be the ideal option, but at 22%, you’re facing an uphill battle and credit counseling may be the best way to get you out of the hole.
For credit counseling information, I would check of http://www.nfcc.org, which has information about local, non-profit credit counselors.
February 23rd, 2010 at 5:05 am
Well Wells fargo is lying. I know several people whose APR was increased a LOT more than 3%. My mother is one of them. Her’s went over double! She’s now sitting at 29.99%. When she called complaining they told her basically tough, close your account. She never was late, never had over balances, & her credit score is 670+. She’s disabled, and cannot afford to pay her balance magically off in one night. I have another friend in the same situation, the way I see it Well’s Fargo strategically hit people they felt would not be able to pay their cards off immediately, to [expletive deleted] them as much as legally possible.
March 20th, 2010 at 12:45 pm
Wells Fargo has my interest rate on my Visa credit card at 22.85%. I have called them numerous times to work with me on lowering my interest rate and the finance charges. (I pay them on time every month). They absolutely refuse and are rude as well. (I also am paying them a high interest rate on my mortage – something else they won’t work with me on lowering). They are absolutely horrible to deal with and when I told the customer rep that perhaps I need to take my checking and savings account to either another bank or a credit union, each rep said basically, “That’s your choice.” WONDERFUL customer service!!
Wells Fargo are nothing but loan sharks who could care less about their customers. This is a bank that the TAXPAYERS bailed out too! I’m fed up and I’m closing my checking and savings account with them.
March 21st, 2010 at 5:22 pm
Wells Fargo hasn’t generated as many complaints as many of the other banks, but they really seem to irk customers that they do upset. With the big bailed out banks, there really seems to be no interest in helping customers. Its a shame, but because these banks are so big, they could care less if they lose a few thousand customers.
March 21st, 2010 at 5:38 pm
In one word – BALONEY!!!
I finally contacted a non-profit consumer place yesterday (they are rated A+ by the Better Business Bureau). They were able to have Wells Fargo negotiate the interest rate from 22.75% to 6% on my Visa card and lower my monthly payment by $180.00 per month. The one hitch was that I had to close my account with them which I gladly did!!
I also am now going to transfer my checking and savings account to either a credit union or CHASE. Wells Fargo, BOA and others don’t deserve my business or anyone else’s but I guess their arrogance makes them not really care!!
March 21st, 2010 at 5:39 pm
If anyone wants the phone # and web address for that non-profit place, let me know and I’ll be glad to provide the information.
March 21st, 2010 at 5:44 pm
I also want to apologize to any of the people I recommended WELLS FARGO to. I also will NEVER do that again. My anger with them is mostly out of the rudeness of the customer service reps I dealt with. The people in my WF bank branch are really nice but that’s as far as it goes.
WF doesn’t give a damn about their individual customers when it comes to interest rates – even if these people have bank accounts with WF.
March 21st, 2010 at 5:46 pm
To whoever is on here as the Balance Transfer Helper:
Just WHO are you working for?? It’s very obvious because you haven’t “helped” alot of customers!!
March 22nd, 2010 at 1:18 pm
I beg to differ, Lydia, and am not sure why you are attacking me. I’m sorry for not responding sooner, but even bloggers take Sundays off. I also moderate all comments to prevent misinformation from being posted, so I’m sorry if you are upset and I’m confident enough in the fact that I’ve helped many thousands of visitors that I’m willing to allow you to attack me on my site.
And BTW, I am sorry about what happened to you with Wells. A lot of credit card companies are acting this way and going to a credit counselor is a really good choice. These companies have really helped out a lot of people who found themselves in situations like yours.
May 4th, 2010 at 10:22 am
hmm you guys don’t get credit cards do you variable is bases on the amount you purchase and transfer, if your balance is close to the maxium credit limit and your balance thing is high each month than yes the company of wells fargo can cut your credit limit and increase your interest rate. Variable means based on you card balance the higher you go in each of the fields the higher the rate goes. Paying the minuim balance won’t reduce your interest rate. for example I have a balance of 400 usually and I got a interest rate of 22.85% variable that means they take the about you have on your balance and the new purchases for there part. You lower your balance and your rate will decrease. Also the lower of maxium rovling credit you have from wells fargo the higher your credit line will be. That is based on how munch above your income you are spending, or below. Also balance transfer are kinda pointless because of one reason most credit card companies take extreme risk with balance transfers, they are often not covered by the low income apr so read the fine print. Also other cards you get from credit card companies can have an influence on your credit line for all your cards. The more cards you have the more of a risk you become, the less money they will be willing to risk to you. Also the worst cards that will definately hurt you is the department store cards signing up for them will imediately cause a high risk alert lower your credit score and cut your max credit line in half. Because they assume when you get a department store card that you tend to buy with it to get the sales that go through it at the same time they won’t tell you that your hearting your other credit card limits and ratings.
May 4th, 2010 at 10:42 am
Sidman,
I take offense to your opening statement: most of the people who post on Smart Balance Transfers are in fact well-informed. Nearly all have or had good credit scores (until their credit card companies cut their limits) and most make excellent observations.
You also made a good observation about department store cards, though I am not sure how immediate the impact is. Also, that is speculation, and there is no public data supporting that.
As to variable rates, you are 100% dead wrong. A variable interest rate is based on either the Prime Rate or the London Interbank Overnight or LIBOR rate. It has nothing to do with your balance or spending habits. When the Prime rate or libor rate increases or decreases, the variable interest rate adjusts accordingly.
I do appreciate your sharing and insights, though I must point out that you are misinformed about variable rates and made a very incorrect judgement of the people who share their experiences on Smart Balance Transfers.
May 4th, 2010 at 11:07 am
well I know about the vairable rate, but wells fargo has three catigories of interest that is covered in the balance. your old balance is caculated first by the rate at that time after the deduction, the new balances are caculated by the current rate at that time. Your credit limit is mostly relies on how munch over your income you go with all credit cards. as far as your overal balance and what above minium payment you pay.
sorry for not clearfing myself better. The balence for wells fargo have 3 different prime interest rate numbers.
Purchase balance interest rate balence of purchased items to caculate that rate.
next Cash Advance interest rate. from taking out cash by transfer or withdrawal.
The next interest rate is based on overdraft protection if you have that option. The 3 different rates could vary depending on what balance is what. for example my rates I can give you is this.
PURCHASES 22.85% variable $406.22 30 $7.63
CASH ADVANCES 23.99% variable $0.00 30 $0.00
OVERDRAFT ADVANCE 23.99% variable $25.12 30 $0.49
the department store cards, the reason why they cause you to become high risk expecially clothing store or hardware stores is they have sales every quarter, so no matter what time of you you get it you beome a higher risk to all your card companies as the account shows up on your credit report and is a negative for your credit score, because they assume your gonna max it out every sale or promotion they have.
I hope you understand what I am saying better now.
May 4th, 2010 at 11:12 am
Thanks for clarifying that Sid. I wan’t aware of these policies at Wells Fargo, as those are not standard with most other credit card companies.
I also think your department store card point is a very good one; people should avoid those cards anyway if they carry balances, because of the absurd interest rates. Just couldn’t find any data to verify, but I think its a very good observation.
Sorry if I came across as impolite in my first response. I’m protective of the people who post here and most really are intelligent people and smart credit card users. Thanks again for coming back to share. Hoping someone with some credit bureau inside info will stop by and clarify the department store issue.