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By Word In Black Staff
Why is it so easy to get into debt and hard to get out of it, and why is it often overwhelming to try to manage it?
More and more consumers are facing this challenge. According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, American household debt increased by $34 billion last year, leaving 18.3 million borrowers behind on their credit card payments.
Wells Fargo Bank helps clients reduce stress and learn how to effectively manage credit and debt.
Darlene Smith-Daniels, branch manager of the Wells Fargo branch on 42nd and 3rd Avenues in New York City. “We are very hands-on and let them know we are here to help them establish credit or manage their debt.”
Smith-Daniels, who joined Wells Fargo in 2003 as a teller and rose to branch manager, appreciates the bank’s commitment to engaging with customers and helping them in this area.
“Growing up, I wasn’t taught much about credit,” she said. “I feel good being able to help them with our debt management tools.”
When our customers make an appointment to meet with a banker, we want to get to know them and learn about their financial situation. Say, 20% want to save more. We want to build a relationship of trust with our customers. Finance can be a sensitive topic, and Smith-Daniels knows that talking about finance can be embarrassing for some customers.
“We take a personal approach and show empathy,” she said. “Our employees are trained to help customers who are frustrated with their debt getting out of hand and help them develop plans to reach their goals.”
Helping our clients become financially literate is a top priority for Wells Fargo. This includes helping you see the big picture to understand the relationship between credit and liability.
According to Smith-Daniels, it’s common for customers to come into the store for personal loans while minimizing their monthly credit card payments.She and her team are wells fargo customers Credit Close-up SM This will help you see your FICO score, receive personalized tips and monthly analysis, and help you manage your debt.
“Debt is not easy to manage and can be overwhelming,” Smith-Daniels said, adding that this may lead some people to ignore it. We are working to find a way to tackle it, because that debt will never go away. I will help you give.”
Lack of understanding can hinder the process. One common misconception is that there are easy ways to pay off debt.
“We explain that we cannot provide a quick solution and advise them that they need patience,” she said. The snowball method, which pays off the lowest debts to 1, and the avalanche method, which pays off the highest interest accounts first, and we work together to find the best way for them.”
Another tool is Debt to Income (DTI) Ratio Calculator Shows how debt affects borrowing capacity. According to Smith-Daniels, understanding this equation is very important. Because many customers make the mistake of wanting to write off all their debts.
“Many customers don’t know until they tell us that this ratio affects whether they want to borrow again. Best.It’s all about management.You must have some debt to show that you can pay it back.If you don’t have a repayment history, the lender may find it difficult to lend you.”
In addition to the tools, Wells Fargo provides staff with skill sets to help clients navigate the labyrinth of credit and debt management.
“They need someone who’s been trained and has been doing this for a while,” Smith-Daniels said. “I think that’s why so many customers keep coming back.”
She sometimes uses analogies to help her clients understand the need for regular financial diagnostics and maintenance.
“I ask them how they are managing their health and remind them to see their doctor regularly to make sure everything is working,” she said. “We recommend that you review your finances that way, at least once a year to talk to your banker to check your finances.”
result? “They love it and they definitely resonate,” Smith-Daniels said. “They were like, ‘You’re right. You need to get a financial checkup to make sure everything’s fine and you’re not overwhelmed with debt.'”
The results are encouraging.
“We have had great results,” says Smith-Daniels. “Some customers come back and say, ‘I want to apply for a loan or mortgage now that I have everything under control and can manage my debt more effectively and efficiently.’ I am happy to be of service to you. “
Wells Fargo’s personalized services include Wells Fargo AssistSM for customers who have payment problems and need assistance.
The bank’s approach is designed for the long term.
“We try to set expectations to track and follow up on our customers’ progress,” says Smith-Daniels.
“If someone is trying to establish credit, we will give them the tools and ask them if they can follow up in a month or two and see how it goes. If they are having issues, you can always schedule a follow-up meeting to work with them and come back to check on their progress. I recommend coming.
“It’s always easier to get into debt than to get out of it, but Wells Fargo is deeply committed to helping our clients reach their goals and gain financial security.” We need to be patient,” Smith-Daniels said.
This article was originally published by Word in Black. Wells Fargo Bank, NA is a member of the Federal Deposit Insurance Corporation. The Financial Journey is a unique series focused on financial education and opportunity. These stories were created through a strategic partnership between Wells Fargo and Word In Black.