Wells Fargo shutting down personal line of credit product -- here's what to do instead
Wells Fargo announced to its customers that it is shuttering its personal line of credit product. (iStock)
Wells Fargo Bank will reportedly no longer offer personal lines of credit to customers, not accepting new applications and closing down the accounts of those who already had a line of credit open with the bank.
"In an effort to simplify our product offerings, we’ve made the decision to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products," the bank said in a statement.
Revolving credit lines through Wells Fargo typically offer borrowers from $3,000 up to large loan amounts of $100,000 with a variable interest rate. Many use these lines of credit to pay for major purchases like home improvement, debt consolidation, seasonal cash flow or medical expenses.
Personal loans are another way to pay for these expenses. They usually have a lower, fixed interest rate and a set repayment period and can be used for some of the same things like debt consolidation or home renovations. Head to Credible to view several personal loan lenders that offer quick loans. You can compare rates and lenders and find a timeline that works for you.
The move is Wells Fargo's latest in a series of lending products closures. Last year, the bank announced it would no longer offer home equity lines of credit (HELOC). It also announced in 2020 that it would stop giving auto loans to most independent car dealerships.
That could be because, in part, it has been hard for the bank to make enough money to keep these areas going since the Federal Reserve placed penalties and growth limits on the bank due to its fake accounts scandal that affected millions of its customers’ checking and savings accounts.
But while Wells Fargo may no longer be offering personal lines of credit, many smaller banks and credit unions still have them available. Personal loans and credit cards can also be a good alternative. Credible can help you compare and contrast multiple credit card types so you can compare rewards and fees from various creditors and find the perfect fit.
The bank also gave customers a 60-day warning of the "inconvenient" credit line closures, adding that it would work with them to find an eventual credit solution.
If you're concerned that this move by Wells Fargo or similar moves by other banks could be affecting your credit score, consider using a credit monitoring service. With it, you can get instant alerts on late payments, fraudulent activities, credit score changes and more. Check out some of Credible's partners here.
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