Wells Fargo Short Term Payment Plan - Utilization Rate question

[nextstepahead]

For a Wells Fargo Cash Wise Credit card, Wells Fargo is offering a "Short Term Payment Plan" with a 1% interest rate on the balance with fixed low monthly payments for 12-months. The principal amount isn't reduced. The card will be restricted and usage will not be allowed during the 1-year plan. Any guidance on whether or not the Credit Line will be changed to $0 or other changes impacting the credit report will be appreciated. 

[pizzadude]

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@nextstepahead wrote:

For a Wells Fargo Cash Wise Credit card, Wells Fargo is offering a "Short Term Payment Plan" with a 1% interest rate on the balance with fixed low monthly payments for 12-months. The principal amount isn't reduced. The card will be restricted and usage will not be allowed during the 1-year plan. Any guidance on whether or not the Credit Line will be changed to $0 or other changes impacting the credit report will be appreciated. 

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It sounds like they might leave the card as open but just reduce your CL to $0.   Either as open or closed this will negatively effect your revolving utilization. 

I'd expect that the account will reflect some kind of "Debt Management" or "Hardship" status, which may or may not spook your other creditors. 

Also I'm guessing they'll close the account once you've paid in full, but do their T&Cs call this out anywhere ?

[nextstepahead]

@pizzadude The Short Term Payment Plan is temporary and will revert to an unrestricted account after the end of the 12-month term as long there's no default on the monthly istallment payments. Even if the balance was paid-off in full early, the account restrictions will continue for the full 12 months.

Though a representative was on the line, the person wasn't knowledgeable about what's reported to the Bureaus and advised me to contact a "credit agency." It's only via a brief prerecorded message that the limited terms and conditions were explained.  Upon a subsequent attempt to get more information from the bank's Payment Assistance team, that person was also was unable to provide any information.

Your estimate of the credit reporting highlights the risks and sounds like a likely scenario. Thanks.