Can We Just Be Cool About Closing Those Wells Fargo Accounts?

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!

Subscribe
Notify of
guest

147 Comments
newest
oldest most voted

sk9879
sk9879 (@guest_1775235)
January 10, 2024 17:04

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.

Matt
Matt (@guest_1644229)
June 29, 2023 18:54

“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”

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

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.

Steve
Steve (@guest_1624808)
May 27, 2023 14:23

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.

fun
fun (@guest_1462199)
October 10, 2022 21:54

so is it 2 or 3 months good to close the account after getting the bonus?

Declan Connely
Declan Connely (@guest_1414126)
July 23, 2022 22:38

$500 account balance keeps it free free also….not too difficult. I usually close my accounts 2-3 months after opening. Please let me know if anyone thinks longer is needed.

Zindella
Zindella (@guest_1323985)
January 31, 2022 15:27

Isn’t it still broadly true that Wells Fargo’s data science / analysis regarding churning behavior is lacking in comparison to the other large FIs?

John ATL
John ATL (@guest_1343975)
March 6, 2022 17:04

I have no idea. That might be true (though even if true it likely will only be a matter of time before they get better at it). But I am not really sure that the specific institution of Wells Fargo is what matters. The big idea of this piece applies to dozens of financial institutions, and it doesn’t matter whether it is deposit account bonuses or CC bonuses. The big idea is:

*** Even if you can legally and without fees close a deposit or credit card account within days of receiving the bonus, it’s not a good idea to do that. It’s bad for the bonus-chasing community, because it increases the likelihood that fewer bonus offers will be offered and when they do they will be less lucrative. And if it is bad for the community, it is also ultimately bad for you. ***

So sure, chase bonuses, but do your best not to be wildly obvious about the fact that you are exploiting the institution in question.

All of us who tried to be good sports over at HMBradley, for example, and made regular paycheck deposits of nontrivial amounts, are now suffering because of the thousands of other people who made $1 paycheck deposits just because they said the fine print allowed them to. Now of course HMB has tightened their policies in a big way and you have to make much larger direct deposits ($1500), obtain an HMB credit card with an annual fee, and spend >$100 on the card every month just to get the high interest rate. That’s just one example of many. Citi used to permit unlimited funding of their bank accounts with CCs but shut that down after individuals greedy for cashback funded 30k initial deposits on a 2% card, rather than opting for much more modest amounts (e.g. meeting a 3k minimum spend on a new card). And so on.

L
L (@guest_1393735)
June 11, 2022 06:10

I think I remember the founder of HMBradley complaining about people just letting 100k sit in their accounts. It was less about the minimum deposits some people were doing.

Wendy B
Wendy B (@guest_1084243)
November 3, 2020 15:51

Ok so in the midst of determining how to close my Wells Fargo acct after receiving a bonus a few months ago, I am just writing some cautions about opening new accounts at this bank. Everything was hunky dorey for me but being a customer with them since early this year, they do not have the best banking amenities. To name a few issues, the website constantly shows when I login that my information needs an update. I guess this bank doesn’t ‘get’ that some people use their cell or Google Voice number as a home number and mobile number so they do not need to really give out their ‘real’ mobile number. So the website tells you to update your stuff because it does not look right. Also when I login, this bank does not seem to accept a GV number as a legitimate one, because when I tell it to confirm my identity by texting me, it does not go through. SO it might be 3 am and now my phone has to ring so I get the account verification. Ridiculous.

Another thing: I am not about doing some long machination process about setting up a transfer from one bank to another, doing an advance deposit for $0.05 then reporting it, just giving WF the luxury of holding on to my funds for a few more days when I want to transfer funds from their institution to an account at another bank. Hey, I get it that there is a laundering concern. I am not a $15K withdraw type of person. I withdraw a few thousand at the most at any time. I do not want to have to wait for it, wait until they send $0.03 to another bank, go look at that statement, write down the deposit amount for WF so they can then give me MY money.

SO, they are ‘out’ and have now gone from ‘status: possible keeper’ to ‘a definite churn candidate’. I do not care who likes it or not. Those are the facts. This is a capitalistic society. Only the best and brightest will endure. If I can go to Chase and do a pull from WF with no issues then why even bother with WF? Mind made up.

I will be waiting a year and applying for another account and bonus from them next year. And one would think they would lose less customers if maybe they got ‘on the ball’.

Km
Km (@guest_1055976)
September 16, 2020 10:47

greedy banks deverse to pay us when they can afford to pay outrageous amounts to their exectutive. Especially Wells Fargo, rip off b##%%

Km
Km (@guest_1055968)
September 16, 2020 10:27

the banks are greedy so close as soon as possible. EXECTS GET RICH OFF US.,

HAC
HAC (@guest_1014990)
July 12, 2020 13:08

How long would you recommend we leave the account open for? I would hate to leave it open for so long that I miss out on another offering from them.