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Wells Fargo cardholder practices may be key in keeping solvent

Julie Sherrier

To stay on top, you’re likely to make some people angry along the way. One bank is even willing to risk offending its own customers if it means protecting itself from potential future losses.

Jim Jubak of recently ranked Wells Fargo as one of the “5 big winners in the banking crisis,” stating that the bank’s “relatively modest losses” this year make it a shining example for other financial institutions that are not faring as well. According to Jubak, “The bank is now reaping the rewards of keeping its powder dry.”

However, some Wells Fargo credit cardholders are experiencing the consequences of the financial institution’s efforts to abate future losses. According to an article in the San Francisco Business Times, Wells Fargo is notifying some of its “at-risk” credit card customers by mail that the bank is kindly offering to help mitigate possible delinquencies by setting up automatic payment plans, creating repayment plans or recommending consumer credit counseling.

Some customers are taking offense at the “we’re here to help” approach, saying that they thought they were cardholders in good standing. Wells Fargo isn’t saying how it decided which cardholders get the letters and which ones don’t, but “the bank’s computers might be assessing card balances, credit limits and credit scores to see whether even those customers current on their accounts may be headed for trouble,” says the Times.

“But Wells may be willing to offend a few customers if it can head off problems long before they trigger losses. Many on Wall Street are watching the performance of the bank’s consumer credit portfolio to see whether mortgage woes spill over into other areas of lending,” says the Times.

The bank does have an advantage in assessing credit risk as many of its cardholders are bank customers, allowing access and observation of customer checking account information, as stated by Wells Fargo Chairman Dick Kovacevich.

As a Wells Fargo customer and cardholder for almost a decade now, I can personally testify to the fact that the bank keeps a close eye on their account holders. To my surprise, I recently received a letter actually increasing my credit card balance, which is so contrary to what a lot of other people are experiencing. But then, I’ve been paying down my debt, am lucky enough to be living in a city not hard hit by the subprime mess (knock on wood), bought my house with a traditional fixed rate, 30-year loan with a hefty down payment. I realize that all could change at a moment’s notice, however, and will therefore keep my fingers crossed.

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  • Reena

    Yes, Wells Fargo has an exceptional approach towards customer service. I have been happily banking with them for over 10 years also.
    They have been great help moving an old 401K
    into an IRA without a glitch, don’t hesitate to call and verify large card transactions and if they are wise enough to reach out and try to help before a customer is getting in over their head with credit card debt, more power to them.