Forgive me but I dont understand this excitement about 'CLOC'.

[sarge12]

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@Anonymous wrote:

Very good points. Thank you. So after approval if you dont use CLOC for a long time do they close it due to inactivity? Do they need to see activity like CC s do.?

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No they were set up specificly so a credit worthy customer can avoid NSF fees in the event of a mistake, so it is normal for them to exist for many, many years unused...mine was set up in 2010, and has never been used but it still shows as 8000 dollars available credit on my credit union accounts home page. Also shows as CLOC and is figured in AAoA and utilization for revolving accounts. It kind of acts as a cash advance from a personal loan deposited in your checking account in 100 dollar increments. The resulting balance on your CLOC account can then be PIF or you can pay minimum just like a credit card. You could even think of it as a credit card that protects your checking account insuring you never have NSF fees or bounced checks. Mine also has a more favorable cash advance interest than any credit card except the credit card at that credit union which has the same 8.99% wheather purchase, cash advance, or BT, so the CLOC interest is the same as their credit card cash advance.

[sarge12]

The one bad caveat to the CLOC at my credit union is it does initiate an annual HP against my credit to verify that my credit profile still meets the standard for the always open and available 8000 dollar CLOC, other than that I have nothing bad to say about this safety net, and to me it is well worth the annual HP.

[Erusidhion]

    Basically like others have mentioned it's pretty much a safety net. It's actually really helpful for those that may live paycheck to paycheck with little to save or even those that may be on Social Security income. If something major comes up whether it's a housing issue (septic/roof/plumbing/appliances) or maybe auto (engine/transmission/etc); at least they'll have the access to money to borrow. It's not meant to be used all the time of course with the interest rate being so high. But it's just another safety net to have if you have no 0% BT offers on current credit cards or a credit card with a lower interest than the CLOC itself.

    Personally I'm probably going to be some major math crunching but once I get a house within the next 12 months; I'm going to try to use CLOC/BTs/Checking-Savings account opening bonuses/card sign up bonuses etc to see if I can somehow use it to fund my retirement accounts within 10 years. My aim is to pay 0% interest while doing this but with an average 7% annual return these days; there may be a way to just put a massive amount of money into your retirement accounts within the 10 years take a minimal interest hit and after 10 years you're set. 7% of 300k is 21k a year. Basically a minimum wage job. If you could somehow get that going within 10 years and still be working whatever job you have now... I think you could be putting yourself in a very good position.

    That's just an idea I've been thinking about and I haven't done all the math. It's going to be a lot of hard work and dedication. Think extreme couponing type of dedication that you see on all those tv shows lol. Anyways I got off topic. CLOC is great to have. Think of it as an emergency fund and you'll be fine. It beats personal pay day loans and is a last option if you can't get a lower APR rate with another loan/cc/cash advance etc.

    And yes it reports as revolving from what I am hearing so it'll definitely pad your FICO scores quite nicely. I think with this on my spreadsheet I may dip into 7%/8% utilization... we'll see.

[Anonymous]

Thanks everyone for your valuable time and points! What i have learnt is  CLOC is good to have as overdraft protection and to show low utilization & as a safety net , even if you dont use it for a long periods of time , the account remains open. Although i dont plan on using it anytime soon i still went ahead and applied for it on navyfcu online. I requested the full 15000$. Received the request to upload DL and SSN copy. which i have done , lets see what happens now.