I’d love to christen this a hot take, but I’ll have to settle for HOT TIP: don’t close your Wells Fargo account right after getting the $250 bonus.
There’s one thing that keeps popping up recently—I’ve seen it tens of times across multiple websites & platforms: since there’s no early account termination fee, can I close my Wells Fargo account right after getting the $250 bonus?
Here’s my take: don’t.
What is one thing that banks truly hate? Losing money. What happens when you close your account right after getting the bonus? They lose money, and in a very obvious fashion. What are the possible repercussions for the future? Fewer good new account bonuses from Wells Fargo (affects everyone), institution of an early account termination fee (affects everyone), and/or Wells Fargo blacklisting you—to name the obvious ones. Your individual actions when summed across a community can create very real reactions.
The cost to keep the account fee-free is 10 debit transactions per statement cycle (+$5 to your Amazon balance), and the fee is waived for your first two statement cycles (at least, according to my first statement). Do whatever you like with your $250, but is it really that hard to keep the account open for a couple of months? It’s not like you can’t find any use for a Wells Fargo account—especially since Wells Fargo values a banking relationship with them if you’re angling for some of their very nice credit card offerings.
A common refrain is that people don’t care about their relationship to Wells Fargo or if they lose money because they opened accounts for people illegally. That was bad and some consumers will likely never be made whole, no two ways about it. However, it is flat out wrong to claim that Wells Fargo (as a monolithic entity) did it to make money, or for some other sordid reason. There’s a very simple & obvious reason it happened: Wells Fargo used a metric (and put in place repercussions for not meeting the metric) that incentivized behavior they didn’t intend. David Manheim over at ribbonfarm has two very fine pieces about why this happens that were published independently of the Wells Fargo fiasco. We could debate the obviousness of what would happen, or who knew what when, from here to the moon, but I don’t think it’s relevant to my point: closing your account is detrimental to the community as a whole.
Let’s just be cool.
Hat tip to u/CarnalCowboy on r/churning for inspiring me to do a complete write-up of my thoughts.
update, January 31: added a small note to the end of the final (true) paragraph to tie it back to the larger point — apologies for forgetting that!
Is there any evidence out there that keeping your account open for a couple months after receiving the bonus makes any difference at all? Who came up with the idea of keeping it open for a couple months afterward? Just seems like some arbitrary amount of time.
If you upgraded a Wells Fargo Checking account to Premier checking, is the 6-month timer the date you opened the original account, or the date you upgraded to Premier?
The account number is still the same, and the fee-avoiding requirements for Premiere are quite onerous, so I would prefer to just close it ASAP.
My hit tip is. WF fucked many people over, so fuck them and close your account and let them lose as much as possible
Ok, but do you want to kill the unethical goose that lays the golden eggs?? Or do you want to have the ability to keep churning them for multiple bonuses over time? “Your individual actions when summed across a community can create very real reactions.”
My thought: Don’t banks factor in the possibility of people immediately closing their accounts? I assume they have done some type of risk cost-benefit analysis when making these offers. Some people will close immediately and some will not. It’s a risk they’re willing to take and it’s not our job to make it less riskier for them.
The point is that if we make the risk cost-benefit analysis lower for them, then this means they’re able to offer more or better bonuses in the future.
Suppose some employee is trying to justify to the bank some new bonus that they’re offering. They’ll have to include the metrics of “how many people do we think will close the account immediately” when justifying the bonus to the higher-ups. If we make this percentage lower, then they’ll be able to offer more deals to our community in the future.
This PSA is from 2017 and I’m honestly surprised WF has largely kept its bonus structure and (lack of) early closure fee the same.
And for comments that say the bank doesn’t lose money because they loan what we deposit, you’re effectively saying their return on that loan is over 30% (currently bonus is deposit $1,000 and get $325 bonus) for it to make money off me. Highly doubt that’s the case.
Seriously? Accounts that have no minimum balance or other requirements might be left open for a few months although I doubt banks are thrilled about having my $1 account on the books. Accounts that have requirements, including Wells Fargo, are closed right after the bonus is paid.
And which Wells Fargo credit cards are “very nice”? I’ve never had one and I’m pretty sure I’m not missing out on anything. My main credit card has 3.3% cashback and I have a bunch of others that have select 5% cash back. Plus, of course, there is the sign-up bonus churning.
What’s your main CC with 3.3%? Is that on all categories?
It will be retired soon. It was great while it lasted. Putting airfare or Priceline hotels on the card was never a problem for me. Unfortunately, it has not been available to new customers for many years. A recent post lamenting its demise: https://www.doctorofcredit.com/grandfathered-priceline-cards-to-be-devalued-no-more-3-3-on-all-purchases/
Oh my, poor banks.
It’s not about the banks you goofball. It’s about us getting more and higher SUBs.
I don’t have a problem with DoC putting out a PSA like this (although I don’t agree with it), but why single out Wells Fargo Checking accounts specifically to make this “just be cool” suggestion? If this is DoC’s stance, why not include the link in all of the bank bonus write-ups?
With regards to Wells Fargo specifically, I went to a branch to apply for their Way2Save bonus last fall, and while talking with the rep during the application, he exclaimed rather excitedly how the bonus was a great deal, and that the return would be even better than their CD offerings if I pulled the money out right after getting the bonus… Yes, a Wells Fargo rep put that out there without me making any indication of how long I expected to hold the account.
No, I don’t feel the need to “be cool” and let these banks use my money any longer than the T&Cs require; and that applies especially to Wells Fargo after my last chat with them in person.
That rep is just trying to sell you to open an account with them. They are sort of “sales” people at the end of the day, and maybe that adds to their quotas as an employe metric.
They need your goot in the door, i.e. account opened.
But the idea is that if overall, as a churning community, we keep the “account closure after bonus” rate lower, they are more likely to continue offering these SUBs and the economics look better to their management.
But I agree with you that this should apply to all banks, not specifically WF
“What is one thing that banks truly hate? Losing money. What happens when you close your account right after getting the bonus? They lose money”
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Nope, they’re most certainly not losing money. You’re giving these banks what amounts to a small loan. They’re just taking your deposit and lending it out to someone else. This is basic banking. That SUB is just a small slice they give to you in order to incentivize you to do the offer. If you stay, great, they can lend out more of your money. If you don’t, that’s fine too. You didn’t cost them anything. But you also didn’t make a lot for them.
Go ahead and call the bank to make bonus inquiries. It’s not like they don’t know about what all of us are doing. These are billion dollar entities. They’re no idiots. If they wanted to they could shut this all down very quickly.
That said I do think it’s wise to keep some of the better accounts open that frequently count as DD sources.
As someone else mentioned, as of writing, current bonus is $325 after $1K deposit in 90 days.
$325/ $1000 = 32.5% in 90 days
Linearly extrapolating that, thats a 132% APY!!
No one, anywhere can make a reliable 32.5% profit in 90 days.
The reason the banks offer these deals, and require DD, is with the hope that your paycheck is ALWAYS deposited with them over a much longer timeframe. That’s how they justify the relatively large short-term bonus.
You started out ok, but you lost me once you started trying to convince us that WF hasn’t, repeatedly, broken the rules for their own financial gain. They clearly have over and over again.