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Established Contributor
woopah
Posts: 721
Registered: ‎03-15-2008
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Line of Credit--don't know where to post

[ Edited ]
I'm not sure if this is the right place to post this, but I'm sure a mod will move it.

I have a line of credit with GE Money. It is not a home equity line, just a regular line of credit. The interest rate is 11.99% and the amount is $5,500. I paid it off in February because I was told that I will never qualify for a lower interest rate, regardless of my history or what happens with my credit scores. And that I "must have misunderstood" when I applied and was told that I could ask about getting them lowered.

Should I close the line of credit? With my all my cards that are currently carrying balances, 4, on intro 0% interest, 11.99% interest is very high. Additionally I won't ever let myself get into this situation again, with CC debt, so I don't foresee needing to use it. I got it at the time because 11.99% was better than 29% on some of my CC's.

But I don't know what the rules are in regards to lines of credit. When I pulled my reports in April I wasn't told that having this was hurting my FICO score by itself. But I was told that I'd made heavy use of my available credit, 25%, and that I have a lot of accounts.

Which I do have a lot of CC's, but I also have multiple student loans listed, because they kept getting sold to different companies, and I refinanced my car after I got it, so the original car loan is on there along with the refinanced car loan.

So, should I or shouldn't I close the Line of Credit?

Message Edited by woopah on 07-17-2008 08:44 AM

Message Edited by woopah on 07-17-2008 08:47 AM
4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Epic Contributor
Creditaddict
Posts: 22,116
Registered: ‎10-23-2007
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Re: Line of Credit--don't know where to post

I would keep it right now until you finish paying your credit cards off because if your at 25% now and you close 5000, that is going to send your util up (to what?) i don't know all your credit lines.
Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Established Contributor
woopah
Posts: 721
Registered: ‎03-15-2008
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Re: Line of Credit--don't know where to post



Creditaddict wrote:
I would keep it right now until you finish paying your credit cards off because if your at 25% now and you close 5000, that is going to send your util up (to what?) i don't know all your credit lines.





So that line of credit gets counted in my util?

I haven't been counting it and with my credit cards alone I have $86,600 in available credit and currently $13,723.73 is used. So that's currently at 15.8% util, CC's alone.

I know that won't show on any of my credit reports, since some of those payments are as recent as the 11th and the 15th, but that's what I've got according to my records.
4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Epic Contributor
Creditaddict
Posts: 22,116
Registered: ‎10-23-2007
0

Re: Line of Credit--don't know where to post

oh right, someone help, does that count in util?? i think i may be wrong!
I know I have a credit line and when applying with BofA they ignored it as debt because it was installment (thank god!)
Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Senior Contributor
FretlessMayhem
Posts: 3,279
Registered: ‎08-03-2007
0

Re: Line of Credit--don't know where to post

I agree with CreditAddict. Your LOC is paid off, and not costing you any money, so you should keep it open for util purposes.

FWIW 11.9 on a LOC is fairly low, IMO.
Here we go again...
Contributor
smoothjk
Posts: 140
Registered: ‎06-17-2008
0

Re: Line of Credit--don't know where to post

I agree with Fretless, leave it open unless it has an annual fee or something. Lower util % always helps.

Plus, 11.99% is a good rate. Just because your other cards are at a promotional (?) 0% right now doesn't mean you won't appreciate the 11.99% later.
FICO (06/17/08): TU 691 - EQ 642 - EX 638 - Util 64%
FICO (07/23/08): TU 698 - EQ 653 - EX 644 - Util 50%
FICO (02/04/09): TU 694 - EQ 668 - EX 654 - Util 43%
FICO (05/18/09): TU 687 - EQ 675 - EX n/a - Util 39%
FICO (03/09/10): TU 666 - EQ: 691 - EX 644 - Util 54%
IDGuard (2/8/12): TU 690 - EQ: 710 - EX 710 - Util 72%
FICO (03/13/12): EQ: 696 (87% revolving to limits)
Valued Contributor
thrasher865
Posts: 1,157
Registered: ‎05-21-2008
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Re: Line of Credit--don't know where to post

[ Edited ]
11.99% is a good rate for a credit card.  For a HELOC it's terrible.  As for an unsecured line of credit, I don't really know.
 
Well, I looked around and 11.99% isn't bad for an unsecured line of credit.  Chase offers prime + 2.74% (10.49%) and other places offer as low as prime + 1% (8.75%).

Plus, it more than likely has an annual fee.

Message Edited by thrasher865 on 07-17-2008 11:42 AM

Starting Score: EQ: 665 - TU: 687
Current Score: EQ: 749 - TU: ---
Goal Score: EQ: 760 - TU: 760


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Moderator Emeritus
cheddar
Posts: 6,794
Registered: ‎09-29-2007
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Re: Line of Credit--don't know where to post

A revolving LOC does count in utilization.
 
I agree that you should keep it open as long as it doesn't cost you anything.  (I've never heard of a LOC with an AF.)
 
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Established Contributor
woopah
Posts: 721
Registered: ‎03-15-2008
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Re: Line of Credit--don't know where to post

[ Edited ]

cheddar wrote:
A revolving LOC does count in utilization.


I agree that you should keep it open as long as it doesn't cost you anything. (I've never heard of a LOC with an AF.)







Thank you everyone for all your responses!

Thanks, Cheddar for the definitive answer on util. Seems like I wasn't the only one who wasn't sure. I guess my overall util is a little better than I thought at 14.9%.

For those commenting on the interest rate. I do have a few cards that are under 11.99% interest. A $4500 CL Citi at 8.74%. I also have the exact same card with a $9,000 CL at 19.74% that I will one day call and ask for them to lower the APR. Insane that it's the exact same card with 11% higher interest. A Chase that's intro now but should be 9.99% after intro with a 13K CL, and another Chase with $4500 CL and an interest rate of 10.99%, which should continue to lower as my credit picture continues improving.

The other reason why I was commenting on the 11.99%, is because when I applied for the LOC I was told that the fixed rates were between 7.99 and 11.99. Clearly I was only approved for the 11.99, but it's insane that they'll never the lower the Interest, no matter how good my credit gets.

And there is no AF, so I'll keep it open.

Thanks again!

Message Edited by woopah on 07-17-2008 12:28 PM
4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Valued Contributor
thrasher865
Posts: 1,157
Registered: ‎05-21-2008
0

Re: Line of Credit--don't know where to post

[ Edited ]


cheddar wrote:
A revolving LOC does count in utilization.
 
I agree that you should keep it open as long as it doesn't cost you anything.  (I've never heard of a LOC with an AF.)
 



Huh, I thought most unsecured LOCs had annual fees.  I don't have any experience with them, I was just under that impression.
 
eta: I may have been thinking of origination fees instead of AFs


Message Edited by thrasher865 on 07-17-2008 12:59 PM

Starting Score: EQ: 665 - TU: 687
Current Score: EQ: 749 - TU: ---
Goal Score: EQ: 760 - TU: 760


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