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Valued Contributor
Pupeitmeister
Posts: 1,156
Registered: ‎11-11-2013
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Card VS PLOC comparisons and suggestions.

OKie Dokie,

 

I just need clarification to make sure I am on the correct path here, although its a bit bumpy, forward progress is the goal.

 

Last year I went on a massive "credit building spree".. as I see so many do once they find the forums.  Actually, All I really wanted to do was open up a credit line to be able to cover household emergencies and repairs.

 

I looked at HELOCs, PLOCs, and CCs. 

 

the jist is this :   I bought my DW's Grandfather's house from her Dad.  I paid him cash.  and We have spent the last 10  years paying as we went for fixing things.  and borrowing from my Father in law when we needed something that cost more then I had available in savings.

 

I mentioned a HELOC to my DW.  She slap out said NO WAY!!!... She does not want to put the house in ANY risk at all.  That is Fair. I respect that, Its "family property". 

 

(I am still the one that paid market value for it to my Father in law, but still)..

 

So I decided I wanted to use NFCU as my provider for this service, via their Platinum card, at 7.99 interest, and I set myself a 2 year goal to get to that interest rate.

 

I will actually be happy with anything less then 13, since thats the current OLOC interest...

 

Goal :  To raise CS and so forth enough to raise or combine limits at NFCU for a 20k CC Limit.  at less then 13% Interest. 

 

Goal Timeframe:  Before Jan, 2016.

 

In the meantime to show usage I am using this Platinum MC as a BT card, and have it loaded with 2.9% interest stuff...

 

Am I Way off base here with my plans? or does this seem like a feasable idea, since the DW does not want us to get a HELOC for Home emergencies, etc etc..


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09Lexie
Posts: 25,281
Registered: ‎09-13-2012
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Re: Card VS PLOC comparisons and suggestions.

My thought is that you'd be missing out on possible tax advantages. Any interest paid on an unsecured loc would not be a write off. 

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myjourney
Posts: 26,096
Registered: ‎02-07-2013
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Re: Card VS PLOC comparisons and suggestions.

Sounds like a plan for future growth to me 

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Valued Contributor
Pupeitmeister
Posts: 1,156
Registered: ‎11-11-2013
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Re: Card VS PLOC comparisons and suggestions.


09Lexie wrote:

My thought is that you'd be missing out on possible tax advantages. Any interest paid on an unsecured loc would not be a write off. 


I agree with the tax issues, but having never had a mortgage, the IRS would probably audit me as soon as they see me start to itemize... and i do not think i would pay enough in interest along with all my other itemizable stuff to warrant not using the "standard deduction".  this is a viable concern, but I don't think it is valid.. It could end up being so though... something to think about


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phillyguy12
Posts: 343
Registered: ‎03-16-2011
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Re: Card VS PLOC comparisons and suggestions.

+1, the helo would be good for 2 reasons, 1 like lexie said w/ the tax benifits 2 it would add to your credit mix. i understand where she is coming from- a few yrs ago we sold a property that was in the family for at least 90 yrs-  it was my great grandparents found tax bills from 1918 in their names in the basement! not easy.  but as long as you guys are responsible there is no need to worry bout foreclosure.


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user5387
Posts: 1,794
Registered: ‎07-01-2010
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Re: Card VS PLOC comparisons and suggestions.

[ Edited ]

Not sure what you're after, but there are a wide variety of CUs out there that are open to anyone, and that have low APRs.

 

For example, my PSECU Visa has a 9.9% purchase rate and a 2.9% BT rate.  If you have one or more CCs with a 2.9 BT rate (like NFCU and PSECU), you can make purchases with a regular CC and then move the balance to 2.9.

 

I don't think regular PLOCs are cheaper than this, though they might be more convenient for borrowing a chunk of money for a relatively long period of time.

 

Here is one list of CUs that anyone can join:

 

http://www.depositaccounts.com/blog/the-big-list-of-credit-unions-open-to-anyone.html

 

Valued Contributor
Pupeitmeister
Posts: 1,156
Registered: ‎11-11-2013
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Re: Card VS PLOC comparisons and suggestions.


user5387 wrote:

Not sure what you're after, but there are a wide variety of CUs out there that are open to anyone, and that have low APRs.

 

For example, my PSECU Visa has a 9.9% purchase rate and a 2.9% BT rate.  If you have one or more CCs with a 2.9 BT rate (like NFCU and PSECU), you can make purchases with a regular CC and then move the balance to 2.9.

 

I don't think regular PLOCs are cheaper than this, though they might be more convenient for borrowing a chunk of money for a relatively long period of time.

 

Here is one list of CUs that anyone can join:

 

http://www.depositaccounts.com/blog/the-big-list-of-credit-unions-open-to-anyone.html

 


TBH... I am not sure what I am looking for either.  In a nutshell, i know i can't pick up the phone and call my Father In Law if "the well breaks", so to speak.

 

I need to be able to handle this on my own.   At this current time, that is not an option with cash, so I am planning the next decade or so to be able to do so .

 

I would like to be able to replace my windows, thats around 5k, New siding, another 5k, if the A/C needs repairs, (its an 11 yr old unit).  I am just wanting to be able to borrow if needed to take care of immediate household stuff... The BT thought is pretty good, I have enough cards with limits, I just need to tweak some usage to make that happen..

 

hmmm... I guess I asked a question before I even knew what I was trying to do.

 

Thanks for the eye openers guys...


OFFICIAL GARDEN START DATE: 07-08-2014... TARGET GARDEN END DATE: 06-01-2016 Lets Git 'r' dun
Established Member
hayhayhayday
Posts: 45
Registered: ‎03-02-2014
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Re: Card VS PLOC comparisons and suggestions.

If you have paid car(s) could always borrow against those for cheap loans if needed also.

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Revelate
Posts: 8,938
Registered: ‎12-30-2011
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Re: Card VS PLOC comparisons and suggestions.


hayhayhayday wrote:

If you have paid car(s) could always borrow against those for cheap loans if needed also.


Usually the rates for those as I understand it are much higher than the typical HELOC.

 

@OP: depending on your credit profile, user39284's suggestion is an excellent one: currently you can get a 10% or lower credit card (sans rewards) sometimes for 10-15k fairly easily which covers a lot of emergencies for most folks.  

 

I definitely recommend setting up a balance carrying card to everyone, and this is exactly the sort of rainy day card build expressly for that.  Added advantage of making it easier to dance to the revolving utilization gods if you care about such things.

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jefftca925
Posts: 687
Registered: ‎08-14-2008
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Re: Card VS PLOC comparisons and suggestions.

Penfed has a PLOC with a variable rate (like most CCs these days) that's prime plus 7%... currently 10.25%.  I'm considering this for some remodeling in my home as I still have about 6 months or so left on a 0% card and then I could just write a check out on this account to pay whatever is left later.  I think if it's for a short term loan that you can't use a CC for it's not a bad option.  HELOC loans require most of the same docs required for a mortgage and about the same amount of time to close.  PLUS you have to keep the thing open or they will charge you a pre-payment penalty.  I like to pay things off quickly so the PLOC would work for me.

 

It would probably be best to calculate how long you would need to pay the debt off and what costs/risks are involved to get the money.

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