18 comments to Meeting Our Personal Banker, or, How I Learned to Love a 100K Unsecured Line of Credit!

  • I’m surprised you went in to talk to him. But wow, that just sounds crazy and reminiscent of recent financial housing crisis. I wish some mainstream media would pick this up.

    • I work in the same building as the bank, so stopping by for 15 minutes wasn’t a huge inconvenience. But yeah, we couldn’t believe how ridiculous it sounded, either. We remember how tough it was to get approved for our primary mortgage to buy our house in 2009, and here is an offer for just $12K less than that mortgage just sitting there!

  • Oh yes. And it was Wells Fargo, too. Actually, we had a new “personal” banker every year. Each one a young grad wet behind the ears. And, like you, we listened politely and exercised our neck muscles as we kept shaking our heads the first time. After that, we just thanked them and hung up.

    When you look at WF’s statements, you see what’s happening: as America is deleveraging (fancy word for getting out of debt) Wells has to find a way to put all those free customer deposits sitting in their checking accounts to work. Those free deposits is why Warren Buffett is so in love with WF (their initials are one short for, well, you know what).

    Good for you to laugh and walk out. Goodness knows how many people get snared. It’s like legal drug pushing…

    Good post!

    • Thanks, William. I don’t disagree, and would even throw out there that I think Wells Fargo (and other banks) is trying to make up for lost income due to the new caps on debit purchase exchange fees, too!

  • CF

    I don’t think I have enough money to qualify for a “personal banker”! But I do try to have a relationship with the bank and I often go in personally to do my banking. There are a few financial service managers that I speak to on a semi regular basis, so I’m pretty comfortable with my bank. One helped me reduce my line of credit interest recently :)

    • I think think the term “personal banker” is pretty inflated – like calling a salesperson an “account executive”. At our branch, if you’re not a teller, you’re a personal banker… Learned that after meeting with ours. =).

  • Yep – this Saturday I’m a transparent wall maintenance engineer. At least that’s what I call myself as I wash our windows :)

  • That is kerrazee. I’m not familiar with lines of credit, but can you have one and not necessarily use it? Ie it is sitting there available, I suppose like a credit card?

    I’ve never had a personal banker – I have no idea what the threshold is to get one, but pretty sure I’m not there yet.

    Also agree job titles can be incredibly misleading. Advertising coordinators are usually glorified admin assistants, and a PR grad out of school can land a role with the title of account executive.

    • Yeah, if we really wanted this line of credit we could open it and let it sit there not using it, but there’s a $25 yearly fee, and I’m not sure how it would impact our credit score, so we’re in no rush to go for it.

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  • […] Well, that’s not exactly what our “personal banker” at Wells Fargo said when he offered us a $100K unsecured personal loan at a 10% interest rate, but it may as well have been. Taking a loan or line of credit offer just […]

  • You’re not crazy for imagining maximizing the personal advantage of the bankruptcy/default scenario on $100K LOC. Someday soon I will write up my story of the guy who declared bankruptcy on my loan to him while preserving $3 million of his own net worth completely protected from creditors in bankruptcy. And driving a late-model Lexus. Ooh that made me mad.
    But anyway…Your post reminded me of my recent post about the advantages of a $100K LOC: http://www.bankers-anonymous.com/blog/ask-an-ex-banker-home-loans-and-home-equity-lines-of-credit/
    Of course, I’m describing a home equity line, so default has serious consequences, but…The theory still holds that lines of credit can be extremely valuable investment tools. Even at 9-19% rate of interest. If you use it opportunistically to buy, say, a distressed rental property with ‘cash’ borrowed from the line, you can end up using that line to your great wealth-building advantage. Of course there are significant risks, but there’s also opportunity as well if taken appropriately. Regards, Michael. Ps. thanks for looking at my site and commenting and retweeting!

    • I would love to hear the story of the guy who declared bankruptcy and managed to keep $3MM in assets.

      We actually have a HELOC much like you’re describing, but it’s significantly smaller – $38K. We took it out on our rental duplex to allow us to pull some money out of there to buy more property and ended up buying an empty residential lot with it. It’s not a cash generating property, but we are pretty confident that it’s going to see a lot more appreciation than our rental duplex as our area continues to recover from the major RE crash we saw.

  • A.J.

    Interesting stuff. But unless you’re one of the relative few enjoying true financial security or truly secure employment, shot credit can itself be a risk. These days, credit can affect more than just the ability to buy a house or secure emergency funds.

    • You’re right – that’s something that we hadn’t thought of at the time. Increasingly employers are running credit checks on prospective employees as a measure of general responsibility and trustworthiness. Luckily this was just a “what if” not an actual game plan.