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Don’t Pay Mortgage With A Cash Advance

Wells Fargo is subtly pushing strapped homeowners into the most expensive kind of credit card transaction out there — a cash advance.

Wells Fargo is pushing people to use credit cardsWith a simple click of a mouse, you could pay your mortgage with your credit card. Only Wells Fargo won’t let you make a typical transaction in this case.

The bank instead offers to advance money from your credit card into checking, charging a fee for the transaction.

Some background: I have both a mortgage and credit card with Wells Fargo. I had a bank account with Wachovia, which was taken over by Wells Fargo (I wrote about this earlier because of a sneaky bank fee).

Now, when I saw I had the option to pay by credit card, I wasn’t surprised. I’ve heard of people paying their mortgage (and all their utility bills) with a credit card because they get points or miles or cash back.

So I decided to give it a try.

That’s when I discovered Wells Fargo would only transfer money from the credit card into my checking account.

Before I finalized the transaction, I was led to a page about the fees involved — cash advance fees.

A cash advance is the worst credit card product for money-starved consumers: high fees, no grace period and big interest charges.

But if you’re just trying to keep your house, this might seem like an appealing option.

It’s not. It’s Wells’ back-door way to get customers to pay more for credit.

Don’t fall for it.

This is the second time I’ve found a dubious credit product. I don’t expect it to be the last.

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Comments (3)
1 Star2 Stars3 Stars4 Stars5 Stars (6 votes, average: 4.67 out of 5)
3 Existing Comments
  1. Jacqueline said:
    on March 26th at 04:04 pm

    I am always surfing the net looking for information that informs and educates consumers about credit. I read some of the information posted on this sites and what I have read so far is definitely a worthwhile read.

  2. mortgages said:
    on March 30th at 09:18 pm

    Its amazing that they are doing this. We ahve enough problems with the mortgage and housing industry and things like this dont help. Since Wells Fargo is one of the largest banks and mortgage servicers they should really know better

  3. Nola said:
    on April 4th at 01:23 pm

    Payday loans are a great option to have available when you need to borrow a small amount of cash quickly. You just need to be sure you do your research and find a reputable lender that will offer you a competitive rate on your loan, so you don’t end up paying more interest than you initially bargained for.