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@Marcos8 wrote:What are the most popular banks/CU's that offer PLOC's? I hear about Penfed all the time but are there any others that anyone has experience with?
Not certain it's a very popular product here, and we tend to cluster around a given set of lenders. I took a tour of random CU's for various reasons the other day and the defining difference seemed to be whether you could write checks against the PLOC directly or not. There were several which were setup as overdraft protection only with regards to checks... no thanks.
If you have a current financial relationship with a lender and they offer one that has the features you need, I'd simply hop on it there. Otherwise if there's a lender you want a relationship with, might be an option. I missed Penfed's the first time around as I didn't at that point realize that many CU's were hiding them under Personal Loans... never did anything with them past the initial deposit, but with their usual UW standards I may struggle there. Looks pretty optimal, looks single rate (prime + X rather than variable based on UW criteria) too unlike many others: guess that's a difference too.
Each app sprees, there is a limited number of "good" TL's that you can add. IMO adding a PLOC counts as a TL reducing the number of CC's that I can apply for. Most reward CC's are worth at least a $100 sign up bonus. However, my last app spree I added a couple of LOC/overdraft TL's. I normally let balances report then PIF. Right now over 2/3's of my CC's are reporting a balance on the CRA's. That many reporting a balance hurts your credit score. The LOC's will report a zero balance, in theory helping my credit score. At least the LOC's will help once they age.
A secondary reason I have the LOC's is just in case things get bad one day. The APR is high (8.9%) at my local CU, but at least it gives me a ready source of cash without selling mutual funds. With good timing, I could use the LOC to pay off some CC's giving me good utilization. Then apply for CC's with a 0% intro offer before the LOC reports. I have never carried a balance (not even during a 0% intro offer). But it is good to have options.
As an added bonus, I don't have to do anything to keep the LOC's active. As long as I keep the checking accounts open, the LOC's will stay open. Unlike a CC, I don't need to make minimum purchase every 6-12 months.
I like the idea of something that resides somewhere between my credit cards and emergency funds or rather between my credit cards and my personal stash in general. Lower apr than CC but can be used as cash when I don't feel like or can't use my own.
I'm thinking of getting a PLOC through my credit union. I've had several HPs on all 3 CRA. I'm almost certain my bank will do a HP and could it get declined for too many? If so, then I better wait a few months. Just curious if my suspicions are correct.
@Vulcan1600 wrote:I'm thinking of getting a PLOC through my credit union. I've had several HPs on all 3 CRA. I'm almost certain my bank will do a HP and could it get declined for too many? If so, then I better wait a few months. Just curious if my suspicions are correct.
I suspect it's the same as any CC application.
Unless you need the PLOC right now, I'd wait. I know I don't view it as a primary spending tool, it's more of a small financial safety net if things go sideways on short-term cash flow. As such I think it can safely wait.