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How do I continue using my Wells Fargo cash secured credit card once they change their ToS and start charging a $15+ monthly account service fee in addition to the $18 secured credit card fee from November 2011?

I have no credit history - it's blank as a slate (no negative records either) and I do a part-time, hourly on-campus job as allowed by federal law for international students.

I signed up for a Wells Fargo cash secured credit card in August 2011 and this required me to open a savings and checking account with them (it was from the savings account that they withdrew the funds for secured deposit)

(The only reason I have the savings and checking account with them is because I have the secured credit card and Wells Fargo supposedly requires a card holder to also have these accounts.)

Wells Fargo, like most big banks charge a monthly account service fee for their accounts, but they also have ways around it.

Now, I don't use these accounts at Wells Fargo, except for payments to the secured credit card, and signed up only after being told that I would not have to worry about a monthly account service fee if all I did was a $75.00 or more single monthly automatic transfer to the savings account from the checking account.

Here is the complete fee waiver details, current as of today:

The monthly account service fee for your checking account is $15.00.
The fee is waived on the Complete Advantage Checking account when you have three or more additional consumer accounts and/or services from separate account categories that are linked to this account, and one of the following:
- $5,000.00 in combined deposit and select credit balances (includes credit card balances), or
- A $75.00 or more single monthly automatic transfer to a Wells Fargo Savings account, or
- A linked Wells Fargo Home Mortgage
To determine whether this balance has been maintained, we look at the lowest balance in the account during the statement cycle. Accounts eligible for the combined balance waiver are Checking, Savings, time accounts, retirement accounts, and/or outstanding balances in a Personal Loan or Line of Credit, Home Equity Loan, or Equity Line.

This means I can, get away with the fees as currently I:

  • have the required "three or more additional consumer accounts" - savings, checking and credit card.

  • can easily meet one of their additional 'or' requirements - the 75.00 or more single monthly automatic transfer.

However, from November 2011, Wells Fargo is going to add one more 'and' clause to the above waiver conditions:

  • Maintain $7,500 or more in combined balances in deposit or qualifying credit accounts, OR Maintain a linked Wells Fargo Home Mortgage

http://consumerist.com/2011/09/new-dilemma-for-wells-fargo-customers-keep-7500-in-the-bank-or-pay-15-fee.html

http://www.fatwallet.com/forums/finance/1124548/

Let's forget about that Mortgage part now shall we?

This means even after doing what I am required to do now to not suffer a fee, from November 2011 onwards, I will need to maintain the $7,500 balance or cough up a $15+ fee every month!

Being a student, a $7,500 balance in my savings and checking account is a distant dream right now.

There is a way I could avoid the fee if I changed my account to a 'Custom Management Package' or 'College Combo', but the CSRs I called were not sure if their ToS would change this November as well.

This probably means I would have to close the account with Wells Fargo soon: definitely by November, if nothing works out.

My question is - what happens to my secured credit card?

Wells Fargo has already deducted the $18 yearly fee from it and I now have a hard pull on my credit history with no substantial report.

Should I try for a Bank of America secured card now (it's not been even a month that Wells Fargo did an enquiry)?

Otherwise, is anyone aware of any process to allow me to continue using the secured credit card to build my credit history without paying the $15+ monthly fee?

If I close my secured card with Wells Fargo by November, how is my credit history impacted? (and I perhaps ended up paying $18 for just 3 months of reporting of on-time payments)

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If you do multiple credit hard pulls within a month, it is still treated as one. I'll say shop around for a different bank or a credit union.

Try DCU, I've heard good stories about international students getting secured credit cards with them. (Not associated with DCU other than being a member).

For your other accounts, if DCU works out, they also have special savings and checking accounts for students with fee waivers, that could work to your advantage.

Or you could try online banks for better rates, like Ally or IngDirect. Both have good rates with very minimal fees. I'm a member of all the banks mentioned above. So if you have any specific question, feel free to ask.

I would suggest not to go with BofA. When it comes to fees, they are no different. Try credit unions and local community banks first.

  • I learn something new EVERYTIME I read a post of yours! Where can I read more about the 'multiple credit hard pulls within a month, it is still treated as one' part? I have an account with Alliant but they don't offer secured credit cards. Will try DCU, but need to learn more about them first. I did research about them but for some reason ended up with Alliant. – f1StudentInUS Sep 15 '11 at 20:50
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    Thanks! For the 30 day rule, check out: myfico.com/crediteducation/creditinquiries.aspx under: Does the formula treat all credit inquiries the same? Having said that, looks like shopping for credit cards are treated differently than shopping for a loan. So you may be out of luck. This might impact your score negatively. – MoneyCone Sep 15 '11 at 21:51
  • Thanks - is there an easy way to be eligible for DCU? For example, can you, as a member recommend me if you wanted to? I am member of a PTA when I joined Alliant, but it looks DCU does not consider membership to PTA. – f1StudentInUS Sep 16 '11 at 3:27
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    You can join one of the non-profits. You don't have to maintain membership, you just should be a member when you open. Also note there is a section in the link for those applying for secured credit cards! Here's the link: dcu.org/onlineserv/onlineapp-index.html – MoneyCone Sep 16 '11 at 11:32
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    They most likely will, but better to call DCU and speak with a rep there. – MoneyCone Sep 16 '11 at 16:52
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Why not just close the accounts? They have their deposit already, so there's no real need for this accounts any more. The representatives claim that you must open the account to get the card (which I'm not sure is true, but whatever, I heard it myself too), but there's no need to keep the account, and I'm not sure it is legal to force you. Your secured card is an account on its own.

  • Now that is really some logical thinking! It makes sense and they are charging fees for the card anyways, so what other fee are they gonna put on top of it if I close all the other accounts? I will call and ask about this - it's not as if they are keeping the deposit in any of my accounts that I need to keep the accounts hanging around for. – f1StudentInUS Sep 16 '11 at 3:25
  • Generally(with secured credit cards) your credit line is based off of some multiplier of your account balance. So if you have 0 in your account you end up with a 0 credit line reguarless of what the multiplier is. And if you have fees or outstanding balance then you can compound them with over the limit chgs. So better to cancel the card then leave it at 0. – user4127 Sep 16 '11 at 16:08
  • Is it a good idea to apply for another card within a month of applying for another one? I thought the wait period was 6 mo+ – f1StudentInUS Sep 16 '11 at 16:10
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    @Chad - that's not true. With secured cards your credit line is based on the deposit, nothing else. That's why it is secured card. Its a secured loan, secured by your deposit. The point is that he should cancel the bank accounts, the card itself - has a yearly fee that he already paid, so no reason not to use it. – littleadv Sep 16 '11 at 19:03
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    @f1Student - it's not a good idea, although if you're applying to another secured card - it's less critical. – littleadv Sep 16 '11 at 19:03

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