What is a personal line of credit?

For just about anything you want to get off your chest about credit cards.
8 posts
bloated
 
Posts: 2
Joined: Tue May 14, 2013 12:20 am
Location: Redmond

What is a personal line of credit?

Postby bloated » Tue May 14, 2013 12:26 am

What is it exactly? What are the advantages and disadvantages of a personal line of credit versus a credit card?

The reason I ask is that a teller at my bank Wells Fargo said it might be an option for me but I didn't want to sound stupid and ask what is it.


User avatar
FastSRT8
Centurion Member
Centurion Member
 
Posts: 1454
Joined: Thu Apr 19, 2012 1:32 pm
Location: Canada

Postby FastSRT8 » Tue May 14, 2013 2:09 am

Basically it's a loan from the bank with a low interest rate. The rate will be a few points over prime but much lower than the 19% credit cards are asking.

You will need to be pre approved and once done, you can draw down on your line as you need to.
Carpe diem quam minimum credula postero!

bloated
 
Posts: 2
Joined: Tue May 14, 2013 12:20 am
Location: Redmond

Postby bloated » Tue May 14, 2013 2:15 am

Thanks for the answer. Let me get this right it's basically a loan but not a loan for anything specific. Would that be an accurate definition?

How much are personal lines of credit usually for. With income of say $60k and a credit score of 750 what type of amount are we talking about here.

User avatar
FastSRT8
Centurion Member
Centurion Member
 
Posts: 1454
Joined: Thu Apr 19, 2012 1:32 pm
Location: Canada

Postby FastSRT8 » Tue May 14, 2013 2:16 am

Yes that is correct. It's a loan not tied to anything per se.

Your limit depends on your assets and your liability. Best talk to your bank.
Carpe diem quam minimum credula postero!

beef.stu
Centurion Member
Centurion Member
 
Posts: 122
Joined: Wed Dec 26, 2012 12:03 am
Location: Bay Area

Postby beef.stu » Tue May 14, 2013 2:27 am

I think the wells fargo personal line of credit has an annual fee, just be aware of that. They always try to get me to set one up whenever I call in or visit a branch in person, but the fee kills it for be because it would just go unused.
(01/10) - Wells Fargo VISA Platinum
(05/10) - Techron Advantage
(10/12) - Amex BCE
(02/13) - Chase Freedom VISA
(09/13) - Discover It
(03/14) - Sallie Mae WMC
(09/15) - Citi Double Cash WEMC
(09/16) - US Bank Cash+ VISA Signature

Sevenfeet
Centurion Member
Centurion Member
 
Posts: 532
Joined: Thu Jan 17, 2013 7:20 pm
Location: United States

Postby Sevenfeet » Tue May 14, 2013 8:50 am

My wife and I have had one with our credit union for some time. We mainly use it for times where we need cash for a purchase and cannot use credit cards. The typical example is home improvements. We recently had to have some landscaping done to our house including some drainage work. Our landscaper does not take credit cards, nor does our general contractor (very old school guy). So if we cannot pay out of cash flow, we can transfer money from the line of credit to our checking account and write a check to the creditor. Then we'll pay back the credit union over the next few months, plus interest.
Cards:
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)

CCG
Centurion Member
Centurion Member
 
Posts: 151
Joined: Thu Apr 17, 2008 6:52 pm
Location: Austin, TX

Postby CCG » Tue May 14, 2013 10:00 pm

What everyone said above is correct and good advice.

Even though their interest rates are lower than a credit card, one drawback with personal lines of credit is that they almost never have a 0% intro period. You mentioned Wells Fargo and this is what they were charging in my area when I looked:
[imga=pricing for Wells Fargo line of credit"]http://creditcardforum.com/images/useruploaded/wells-fargo-loc.png[/imga]

Paying 9% will usually be lower than the standard APR on most credit cards. But on the flip side, most major cards will give you a 0% intro APR for 12 to 18 months.

That means if you would be using the line of credit at places where a credit card would work, you should stick with a 0% card. If they don't accept cards (such as paying another person) you may still want to stick with a card since you could use it to send money through PayPal to them.

Here are the lowest rate credit cards which are sponsored by CreditCardForum.

Good luck!

User avatar
Calipso
Centurion Member
Centurion Member
 
Posts: 195
Joined: Mon Oct 29, 2012 2:50 pm
Location: Boston

Postby Calipso » Wed May 15, 2013 7:54 pm

I have a LOC through NFCU. It's good to have there in case of emergencies.

The APR isn't the best, but it beats a credit card cash advance.
My Limits:
NFCU NavCheck: $15,000/NFCU Platinum: $11,500/NFCU nRewards: $8,000
Chase Freedom: $6,500/Chase Slate: $6,000/CSP: $5,000/Marriott Rewards Primier: $5,000/United MileagePlus Explorer: $5,000/Southwest Primier: $3,000
Citi Hilton HHonors: $9,700/Citi Simplicity: $8,200/Citi Forward: $5,500
AMEX Blue Cash Everyday: $8,000/SPG AMEX: $5,000/AMEX Everyday: $5,000/AMEX Delta Skymiles Platinum: $3,400
Discover IT: $7,700
Barclay's NFL Extra Points (Carolina Panthers): $5,000
DCU Platinum: $3,000
RTN FCU CC: $2,000
CCCU Platinum Rewards Visa: $2,000

Current total limit: $129,500



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 2 guests