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.
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.