Wells Fargo is ending personal lines of credit. Here’s what it means for customers.

Wells Fargo is shutting down all existing personal lines of credit, the bank confirmed Thursday, in what it said is an effort to focus on other lending products that meet customers’ borrowing needs.

The account closures don’t mean customers are out of options when it comes to credit. Here’s a breakdown:

What’s the difference between credit cards and personal line of credit?

There’s a slight difference between personal loans and credit cards — the products where Wells Fargo says it will shift its focus — and a personal line of credit, said Teresa Murray, director of the consumer watchdog office at the U.S. Public Interest Research Group.

With a personal loan, she said, borrowers receive the principal amount and pay it off in regular increments with a fixed interest rate over a set payment period.

A personal line of credit, she said, is more flexible and has a variable interest rate. Consumers pay interest only on the current balance and can borrow as much as they need up to the limit, provided they make minimum payments.

“Think of it as a swimming pool: you take some water out, you put some water in. It’s fluid.” Murray said.

Personal lines of credit often have similar interest rates to many credit cards, Murray said. “Basically, (a personal line of credit) is just a sexier way of talking about a credit card.”

Why is Wells Fargo closing the credit lines?

In a statement to the Observer, the bank said it made the decision to shutter personal credit lines last year as it looks to simplify its product offerings.

“We realize change can be inconvenient, especially when customer credit may be impacted,” Wells Fargo said in the statement, adding that it is committed to helping customer find other credit options.

Account holders were given a 60-day notice of the closures, according to letters obtained by CNBC. In the six-page letter, the network reported, the bank also notified customers that the change may impact their credit scores.

That drew criticism from Sen. Elizabeth Warren, D-Mass., who took to Twitter: “Not a single @WellsFargo customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence,” she wrote. “Sending out a warning notice simply isn’t good enough – Wells Fargo needs to make this right.”

Murray said there may be an additional reason that the bank, which has been under regulatory scrutiny since its fake accounts scandal in 2016, is looking to remove the offering. Lines of credit can weigh heavy on a bank’s balance sheet.

“On the books, Wells’ exposure would be the full amount of a line of credit,” she said, no matter how much of that credit its customers have actually borrowed.

Will the change impact my credit score?

Wells Fargo customers affected by the change can expect a slight hit to their credit rating, Murray said.

“Any time an account is closed… in general, it’s going to hurt your credit score, if only by a few points,” she said

The closures work to impact a consumer’s credit score by removing unused credit and upping their proportion of credit available compared to credit in use.

Remaining balances on Wells Fargo personal line of credit accounts will require minimum payments at a fixed rate, the bank told CNBC.

For those worried about the account closures’ impact on their credit score, Murray warned against applying far and wide for credit lines at other banks, which could drive your rating down further. Instead, she said, focus on paying down current debt.

Where else can I apply for a personal line of credit?

Murray recommended evaluating your borrowing needs before opening a personal line of credit. Just as with loans and credit cards, she said, consumers should avoid borrowing unnecessarily or going into debt they can’t pay back.

But if you’re looking to apply for a line of credit, your best bet is a bank with whom you currently have a relationship, she said, be it through a deposit account or a loan.

Most banks allow customers to apply for a personal line of credit online.

Here are some banks that offer personal lines of credit or similar products in Charlotte:

• PNC Bank offers a personal line of credit of $1,000 to $25,000 with a variable interest rate based on the Wall Street Journal prime rate.

• Regions Bank has three primary personal lines of credit: the Regions Credit Line, which requires no collateral and has a fixed interest rate, the Regions Preferred Line of Credit, which offers higher credit limits and requires no collateral and the Regions Savings-Secured Line of Credit., secured by a savings or money market account.

• SunTrust, now Truist offers “Personal Credit Line Plus,” a four-year revolving credit line of $5,000 to $250,000 for most customers, according to the SunTrust website. There’s also a higher-limit credit line for wealthier customers. SunTrust and BB&T merged to become Truist in 2019 — the two former banks have continued to offer independent product lines for a period of time.

• Fifth Third Bank offers a secured line of credit backed by a savings, CD or investment account, and an unsecured alternative for customers that meet an asset requirement.

• Though not a traditional personal line of credit, Bank of America offers Balance Assist, a small short-term loan of up to $500 with a flat $5 fee meant to help customers manage short-term liquidity needs and limit excessive overdraft fees.