Some pay down debt, save more since last year; Wells Fargo offers tools to help get smarter about credit
Many people are taking drastic actions to reduce expenses. Since last year, one-third of homeowners (34 percent) say they have had family or friends move in with them, and 42 percent are spending less on their children. And, compared to a year ago, many have adjusted their spending. About two in five say that they are budgeting more or buying more of only what they need (39 percent and 41 percent respectively) and 30 percent say they are learning how to better manage their budgets on their own.
Asked what would boost their confidence in the economy, one in four say an improvement in their personal situation is the top indicator. Meanwhile, homeowners are waiting for the economy to improve to make a major purchase: 30 percent say the first purchase they will make will be home improvement, 18 percent say they will buy an automobile while 13 percent say they will take a vacation.
Smarter Credit™ approach can help
Wells Fargo provides a variety of tools and resources to help customers pay down debt while increasing savings to improve financial stability. These tools are especially critical given that 80 percent of homeowners are living with debt (excluding their mortgage). Half of all homeowners have an average of $10,000 or more in debt, which is significantly higher than previous quarters.
“Wells Fargo’s tools and resources are examples of our commitment to helping customers manage credit, reduce debt and increase savings,” says Kevin Rhein, Wells Fargo group executive vice president of Card Services and Consumer Lending. “Consumers need to know what is available to them. A great place to start is the Smarter Credit online center, or they can visit with one of our bankers in our stores or over the phone.”
The survey indicates a rise since last quarter in homeowners’ desire to better manage debt and credit (40 percent versus 33 percent), but only 4 percent sought professional help in the last year to better run their household budgets.
“Nearly 40 percent of survey respondents say they are budgeting more, but only 15 percent are using online budgeting tools to help,” says Jamie Moldafsky, an executive vice president in the Wells Fargo Home Equity Group. “We want to educate homeowners and others on how to get on the right track toward budgeting, paying down debt and saving for their futures. With the uncertain economy and job market, it is essential that consumers take action now to be more secure with their finances.”
The Wells Fargo Smarter Credit center (www.wellsfargo.com/smarter_credit) provides products and services that can help consumers better manage their spending, increase their savings and pay down their debt include:
- My Spending Report with Budget Watch -- a patented, free online money management tool that helps customers create a budget in as few as two clicks and monitor their progress throughout the month. This tool automatically categorizes transactions and enables customers to track their spending by category, so they can identify opportunities to spend less - delivering the information customers need to stay on budget and gain more control of their finances.
- My Savings Plansm-- a free online tool for Wells Fargo savings customers that gives customers an easy way to save for goals and automatically monitor their progress.
- Debt Pay Down Solution® -- www.wellsfargo.com/paydown, a simple three-part program that can help customers pay down debt. First, customers consolidate high-interest debt and may get lower monthly payments through a Wells Fargo personal loan. Second, customers use My Spending Report with Budget Watch to identify “What's Left” (deposits minus spending) each month. Finally, customers are able to transfer “What’s Left” to the principal of the new loan to accelerate the loan pay-down. In three manageable steps, customers are on the right track to financial freedom from debt.
- Wells Fargo Cash Backsm Card, Wells Fargo Cash Backsm College Card and Wells Fargo Home Rebate Card® - these cards reward customers with a full 1 percent cash back on their credit card purchases, and give them the ability to automatically apply their cash rewards to help pay off debt, build savings or pay down their mortgage principal.
“The results of the survey clearly indicate that customers need – and want – more help making smart financial decisions, and not just more help managing their financial accounts,” says Ron Shevlin, senior analyst at Aite Group. “This is an important distinction that Wells Fargo clearly understands as it rolls out these tools and services. Many financial institutions have focused on using the online channel to help their customers make it easier to manage and access accounts. Wells Fargo is taking the next step and using online tools to provide guidance and assistance in making financial decisions.”
The survey of U.S. homeowners, conducted for Wells Fargo by marketing research consultancy Ipsos Marketing and completed in March, polled homeowners nationwide about their attitudes and behaviors toward debt and their use of credit. This is the first in a series of quarterly surveys to be conducted this year and the sixth year that Wells Fargo has surveyed homeowners.
Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,400 stores, over 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.