Credit Cards

How to Request a Credit Limit Increase With Wells Fargo

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Wells Fargo Bank

If you want to continue to increase the amount of credit available to you without constantly applying for more credit cards or loans, requesting a credit limit increase is a reasonable solution. However, like most things in life, there are pros and cons to requesting a credit limit increase.

The pros of requesting a credit limit increase:

There are at least two reasons why requesting a credit limit increase may be a good idea for you. First, since you have already proven yourself as a valued customer, it can be easier and faster to request and receive an increased credit line as opposed to applying for a brand new line of credit. Second, if approved, it can increase the total amount of credit available to you, which can potentially improve your credit score. That’s because your utilization rate — how much credit you’re using vs. how much credit you have access to — makes up 30% of your credit score.

The cons of requesting a credit limit increase:

There are also some downsides to requesting a credit limit increase. First, the request will likely trigger a hard check on your credit, which can lower your credit score by a few points. Second, if you are requesting the increase so that you can spend more each month, the advantage of lowering your credit utilization to improve your credit score would disappear. Additionally, it becomes a slippery slope; the more you spend, the harder it can become to pay off the credit card each month, which could lead to credit card debt.

How a credit limit increase can help raise your credit score even if it initially dips

Any hard checks on your credit will likely result in your credit score dropping a few points temporarily. However, the benefit of an increased credit limit and its impact on your credit score will make up for the few points it dropped from the hard credit check.

The number of hard credit checks on your account is not a huge factor in determining your credit score. What is a huge factor in determining your credit score? Credit utilization. In other words, how much of the credit available to you are you using? Ideally, you want to keep your credit utilization under 20%. An increase in your credit limit will immediately lower your credit utilization percentage. However, this will only be the case if you don’t increase your spending with the increased credit line.

Since your credit utilization has a larger impact on your credit score than the number of hard checks, requesting the credit limit increase is likely to help raise your credit score. As improving your credit utilization will do more to improve your credit score than the hard check would lower your credit score, it’s worth it to ask for a credit limit increase.

How to request a credit limit increase with Wells Fargo

Before asking for a credit limit increase with Wells Fargo, you should make sure you meet the minimum requirements of having an account that is at least a year old. If you don’t satisfy these requirements, then your request is likely to be denied. If they do a hard check on your credit and ultimately deny your request, you will still see the negative impact of a few points from having the hard credit check without the benefit of increasing your credit utilization.

Unfortunately, unlike many other banks these days, Wells Fargo does not have a simple online process to request a credit limit increase. According to the Wells Fargo FAQ, if you want to ask for a credit limit increase, you will need to call 1-800-642-4720. As with any request for a credit limit increase, be prepared to have them run a hard check on your credit and to answer questions regarding your current income level.

You can find the information on the Wells Fargo website by going to the “Loans and Credit” section and then clicking “Credit Cards.”

Then click “See credit card FAQs.”

 

The information on how to increase your credit limit by calling the number mentioned above is listed toward the bottom.

How to improve your chances of getting the credit limit you want

 

While ultimately the decision to increase your credit limit is up to the bank, there are a few things you can do to improve your chances. According to credit card expert Jason Steele, banks like Wells Fargo will “look at your reported income, which would demonstrate your ability to repay the loan. They would also look at the length of your relationship with Wells Fargo, and how long your account has been opened. Finally, they might also look at your payment record, and of course, your current credit utilization.” So by ensuring you have an excellent repayment record and a good relationship with the bank and the accounts you have with them, you can give yourself a better chance of being approved.

When looking at those who received the credit line increase they wanted and those who didn’t, the biggest difference appeared to be how active a customer was with Wells Fargo. Meaning they regularly used their credit card and paid it off, and they also often had another type of account with Wells Fargo, such as a mortgage.

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Credit Cards, Featured, Pay Down My Debt

Guide to Credit Counseling: 7 Key Questions to Ask

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Guide to Credit Counseling: 7 Key Questions to Ask

It’s no secret that financial education is sorely lacking in the U.S. However, this does not mean that you can’t seek financial education from reputable sources. If you have little to no knowledge on the topic of personal finance and are struggling with your finances, then you may consider credit counseling.

Credit counseling can involve a variety of services including educational materials and real-world application to your finances. Credit counselors can help you to set a budget and advise you on how to manage debt and your money in general.

According to the Federal Trade Commission (FTC), reputable credit counseling organizations have certified counselors who are trained in consumer credit, money and debt management, and budgeting. Credit counselors will work with you to come up with an individualized plan to address the money issues you are facing.

Seeking credit counseling is typically voluntary but can be required when filing for bankruptcy. In this guide, we’ll answer some key questions you might have about credit counseling and whether it’s right for you.

How Do You Find a Credit Counselor?

Before settling on a credit counseling organization, do your homework to make sure they are not only reputable but will also be the most helpful for your particular financial circumstances. Check with your state’s attorney general and the consumer protection agency present in your state to see if there have been any complaints filed.

When looking for a good credit counseling agency, first ask about what information or educational materials they provide for free. Organizations that charge for information are typically more interested in their bottom line than helping you. Also, ask about the types of services they offer. Limited services can be a red flag. The fewer services they offer, the fewer solutions they may provide you.

You do not want to be pushed into a debt management plan simply because that is their top service. And make sure you understand the organization’s fee system, not only how much services will cost but also how employees are paid. If employees make more based on the number of services you receive, look for another credit counseling organization.

MagnifyMoney has come up with a list of some of the best credit counseling options, which are a great place to start. If you are looking for credit counseling as a pre-bankruptcy measure, the U.S. Trustee Program has a list of approved credit counseling agencies that can provide pre-bankruptcy counseling.

How Much Does Credit Counseling Cost?

Credit counseling can involve both start-up and monthly maintenance costs. The Department of Justice has said that $50 per month is a reasonable fee. Further, the National Foundation for Credit Counseling (NFCC) has suggested that a start-up fee should not exceed $75 and monthly maintenance fees should not be more than $50 per month.

Credit counseling agencies may offer fee waivers or fee reductions, depending on your income levels. Where credit counseling is required, the DOJ requires that if the household income is less than 150% of the poverty line, then the client is entitled to a fee waiver or reduction. While the poverty line varies depending on household size, it ranges from $11,880 for a single person family household to $24,300 for a family of four.

Other regulations, such as when fees can be collected and circumstances that would warrant fee reduction or waiver, may also be set forth by your state.

How Long Does Credit Counseling Last?

While the length of your credit counseling session depends on the complexity of your financial problems, sessions typically last 60 minutes. After the initial session, credit counselors will then follow up to ensure you understand the actions you needed to take and that you have been able to get started on the plan they developed. Another session may be necessary if you see a significant change to your financial situation.

What Do You Accomplish with Credit Counseling?

According to the NFCC, reputable counseling involves three things. First, a review of a client’s current financial situation. You cannot move forward unless you know where you are starting. Second, an analysis of the factors that contributed to the financial situation. You don’t want bad habits to undermine your progress. Lastly, a plan to address the situation without incurring negative amortization of debt. This gives you a place to start in improving your financial situation.

What Is the Difference Between Credit Counseling and Debt Management Programs?

A debt management plan is just one solution a credit counselor may recommend based on your financial situation. Having a debt management plan is not the same as credit counseling.

A debt management plan involves the credit counseling organization acting as an intermediary between you and your creditors. Each month you will deposit an agreed upon amount of money to your credit counseling agency, which will, in turn, apply it to your debts. The credit counseling agency works with your creditors to determine how the amount will be applied each month as well as negotiates interest rates and any fee waivers. It’s important to call your creditors directly to check whether they are open to negotiating interest rates or offering waivers for fees. In some cases, a credit counseling firm may promise to negotiate those things for you but be stonewalled when they discover a creditor isn’t even open to the discussion.

Before agreeing to a debt management plan, make sure you understand any fees associated with the debt management plan and any choices you might be giving up. For example, some debt management plans may have you agree to give up opening up new lines of credit for a specified period of time. Remember that a debt management plan is just one of many solutions a credit counselor may advise you to consider.

How Does Credit Counseling Impact Your Credit Score?

Not directly. While the fact you are in credit counseling may show up on a credit report, that fact does not affect your score. The actions you take as a result of credit counseling can impact your score. For example, if you don’t choose a reputable credit counseling agency, the agency may submit the payment on your behalf late to your creditors, which can damage your credit score. So even though you submitted your payment on time to the credit counseling agency, it is possible that the credit counseling agency will issue a late payment on your behalf. This is why it is important to make sure you use a reputable credit counseling agency.

Who Should Consider Credit Counseling and When?

While credit counseling is sometimes required, like in instances of bankruptcy, you always have an ability to seek credit counseling. Bankruptcy attorney Julie Franklin, based in Boston, Mass., explains, “For bankruptcy purposes, there are two course requirements — a debtor must complete the first credit counseling course prior to filing and obtain a certificate that is filed with the court in their initial bankruptcy petition documents. Post bankruptcy filing, the debtor is required to take a second course, and upon completion, the certificate that is issued must be filed with the court in order for the debtor to obtain an order of discharge.”

Anyone struggling with personal finance should consider credit counseling as a viable option so long as they use a reputable credit counseling agency. Franklin also notes that “the first credit counseling course is a tool for debtors as it compels the individual taking the course to closely examine the household assets, income, liabilities, and spending habits to determine if there’s a way to ‘save’ the debtor from having to file bankruptcy.” If you are considering bankruptcy, you will have to attend some credit counseling anyway, but it could also help you to avoid filing for bankruptcy.

Voluntary credit counseling might not help if you are already being sued to have a debt collected. However, you may be able to negotiate terms with the debt collector that result in a withdrawal of the suit if you agree to enroll in credit counseling and possibly a debt management program. Not all creditors will agree to such terms, but it is possible.

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Reviews

Ally Bank Review: One of the Best Banks for Low-Fee Checking, High-Yield Savings

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The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Ally Bank Review

Ally Bank boasts some of the most competitive savings rates and lowest fee checking accounts on the market today.

The bank offers a variety of checking as well as savings products including high-interest savings accounts, money market accounts, and certificates of deposit (CDs). Recently, Ally broke into the credit card space with the introduction of the Ally CashBack Credit Card.

Ally’s Interest Checking Account

Ally’s interest checking account is very convenient if you’re comfortable with online banking. However, if you’re not used to online banking, you may be disappointed that you are unable to make cash deposits and cannot go to a physical location if you prefer in-person customer service.

Account Details

It’s easy to open an interest checking account with Ally. Currently, accounts with under $15,000 earn 0.10% annual percentage yield (APY), while accounts with a minimum balance of $15,000 earn 0.60% APY. Ally’s user-friendly app makes it easy to deposit checks on the go and transfer money. There are no physical bank locations. All banking is done digitally through the website or app.

Fees

One of the benefits of Ally’s interest checking is there are no monthly maintenance fees. There are no fees for an ACH transfer to a non-Ally bank, no fees for incoming wires, and unlimited free standard and cashier’s checks. If you overdraft, there is a $25 overdraft fee per item, but this fee is limited to once per day. This $25 overdraft fee can be avoided by using Ally’s overdraft transfer service. You connect your Ally savings account to your checking account to automatically transfer funds if you overdraw your checking account.

Customers can use any Allpoint ATM for free and get reimbursed up to $10 each month for fees associated with other ATMs.

Pros and Cons

Pro: Up to $10 reimbursement of ATM fees. If an Allpoint ATM is not convenient, you can use other ATMs and be reimbursed for any fees they might charge you, up to $10 each month.

Con: Unable to make cash deposits. Since Ally banking exists entirely online, there is no way to deposit cash into your account.

Pro: No minimum starting balance. You are not required to have any minimum amount of money to open an account.

Con: No physical locations. As is typical with online banks, there are no physical bank branches, which can be an adjustment for those more comfortable with traditional banking.

Pro: No monthly maintenance fee. There is no fee or requirement to maintain a certain amount of money in your account.

Con: While Ally does strive to provide excellent customer service, many customer reviews have complained about the bank’s poor communication. A slowness in clearing deposits and lack of notification of changes or closing of accounts have topped the list of complaints.

How Ally’s Checking Compares

The online checking experience Ally provides is not very different from other online banks. The biggest differences are apparent when comparing Ally to traditional brick-and-mortar banks.

Online Savings and Money Market Accounts

Ally’s online savings and money market accounts have competitive interest rates. However, like other savings and money market accounts, Ally limits the number of transactions you can make each month, and these accounts come with a hefty fee if you exceed the number of allowed transactions.

Account Details

With some of the highest interest rates available and no minimum balance, Ally online savings and money market accounts are attractive options. Currently, Ally’s online savings account offers a 1% APY while the money market account earns 0.85% APY across all balance tiers. The average savings account at other big banks earns somewhere between 0.1% and 0.12% depending on the account balance.

Although the interest rate on Ally’s money market account is slightly lower, it offers some benefits not available with their online savings accounts. The money market account includes a free debit card and checks, plus unlimited deposits and ATM withdrawals.

Fees

The only fee that differs from Ally’s checking is the excessive transaction fee. By law, these accounts are limited to six transactions per statement cycle. If you exceed this amount, you will be charged $10 per additional transaction. If you do this frequently, Ally will be required to close your account.

Pros and Cons

Pro: No minimum opening deposit. You can open an account with any amount of money.

Con: Limited transactions. You are only allowed six transactions per statement cycle and frequently exceeding this amount can result in the closing of your account.

Pro: Unlimited deposits. Deposits do not count toward your six transactions each month.

Con: No cash deposits. Again, the fact that Ally is an online bank means you will not be able to make cash deposits.

Pro: Debit card is available for money market accounts. Having a debit card makes it easier to access the money in your account, and ATM withdrawals do not count toward the transaction limit.

Ally’s CashBack Rewards Credit Card

Ally’s cash back rewards are average, but this credit card may be a good option if you want to simplify your finances by keeping all your banking in one place.

Read our full review of the Ally CashBack Credit Card here.
ally cashback

LearnMore

 

Account Details


Ally’s CashBack Credit Card
is a logical next step if you are already banking with Ally. Ally currently offers a 10% bonus when you deposit cash back rewards into your Ally account. However, if you are not already banking at Ally, the card offers only average rewards.

Rewards Program

Ally’s CashBack Credit Card has no annual fee and has unlimited rewards, earning 2% cash back at gas stations and grocery stores and 1% cash back on all other purchases. They are also currently offering a $100 bonus when you spend $500 on eligible purchases during the first three months. The drawback is their 2% cash back is dependent on merchant codes that stores themselves determine.

Interest Rates and Fees

While there is no annual fee, there are balance transfer fees (the greater of $10 or 4% of each transfer), cash advance fees (the greater of $10 or 5% of each transfer), and foreign transaction fees of 3%. There is also a minimum interest charge of $1 for cards carrying a balance.

Your card’s interest rate will vary based on your creditworthiness and ranges between 13.24% and 23.24%.

How the Ally CashBack Card Compares

No limit on cash back earnings can be significant if you are putting all your regular spending on the card. Their 10% deposit earnings also really help to boost the rewards of this card. However, if you don’t already have an account or don’t want to open a new account with Ally, then you may want to look at other cash back rewards cards.

The Power of Linking Ally’s Checking and Savings Accounts

While Ally’s checking and savings accounts are strong on their own, having linked checking and savings accounts provides a number of added benefits. You can keep all of your money in your Ally savings account and have free, automated transfers from savings to checking to cover any potential overdrafts. This linking and the free transfer would prevent a potential $25 fee for each day that you overdraft.

Your ability to transfer funds between accounts and have immediate access to your money is another perk. This means you can easily withdraw money using your ATM card, making the savings account much more accessible.

How Ally’s Online Savings and Money Market Accounts Compare

With their high-interest rates and easy access, Ally’s online savings and money market accounts rank among the best savings accounts available. These accounts become even more attractive when linked with an Ally checking account. Having the accounts linked means you have access to overdraft protection and free transfers between accounts. This allows for immediate access to money in your online savings and money market accounts.

Ally’s IRA and Certificate of Deposit Options

While the early withdrawal fees are what you would expect with IRAs and CDs, Ally’s CDs stand out for their 10-day rate guarantee that ensures you are earning the highest rate regardless of which day you fund the account.

Account Details

Ally offers a variety of IRA and certificate of deposit (CD) products at various rates. Ally offers three different IRA options, including an IRA High Yield CD with APYs from 0.3% to 1.75% depending on the initial deposit amount and the term length. Ally also offers an IRA Raise Your Rate CD with 1.3% – 1.4% APY based on term length. However, the Raise Your Rate IRA also allows you to change your rate once (2-year term) or twice (4-year term) if Ally’s rate for your term and balance tier goes up. In addition, Ally offers an IRA online savings account with a 1% APY.

Ally’s CD offerings are very similar to their IRA options. There are three CD products, the High Yield CD, Raise Your Rate CD, and No Penalty CD. The APYs currently available for the High Yield CD and Raise Your Rate CD match those of their IRA counterparts, ranging from 0.3% to 1.75%. The No Penalty CD has an APY of 0.87%, which is less than the IRA online savings account, but there is withdrawal flexibility, which is not the case for IRAs.

Fees

Ally does penalize early withdrawals if you withdraw before the maturity date; the fee for early withdrawal depends on the term of the CD or IRA CD and ranges from 60 to 150 days’ loss of interest. Also, an early IRA withdrawal will be taxed by the Internal Revenue Service. There is no monthly maintenance fee, and the terms will automatically renew upon the maturity date with a 10-day grace period allowing you to withdraw your money at no charge.

Pros and Cons

Pro: Easy access banking app. The ability to see your CD balance and be notified of rate changes (so you can change your rate) provides great peace of mind.

Con: Automatic renewal. If you aren’t keeping track of your CD’s maturity date, you might find yourself unable to access your money for another few years.

Pro: Best rate guarantees. This is available for all CD and IRA products except for the IRA online savings account. Ally’s best rate guarantee ensures you receive their highest available interest rates when you fund your accounts within 10 days for a CD or 90 days for IRA CDs.

Con: Early withdrawal penalties. If you need access to your money within the next 1-5 years, the no-penalty CD may be your best option as all other products have a penalty fee for early withdrawal.

How Ally’s IRA and CD Products Compare

The rates are very competitive, but what puts Ally ahead is their CDs’ 10-day best rate guarantee, as well as the Raise Your Rate CD and IRA that allow you to opt into a higher rate that becomes available during the term. The fact that they also don’t have a required minimum opening deposit makes these accounts accessible to more people and extremely convenient for those already banking with Ally.

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