topic Re: Should I try for a new credit card with PenFed... in Credit Cards

Should I try for a new credit card with PenFed...

Anonymous — Sat, 25 Jun 2011 21:22:12 GMT

My husband and I are planning to buy a home next year. We have 9 credit cards totaling a little over $50k in credit limits. We're currently @ 51% Utl. We are paying off debt to raise our scores to 740+ by end of Summer 2012. Just a few days ago I applied for a PenFed Savings account because they offer good rates for mortgages and I didn't want to have to have my credit report pulled for the account close to when we go to buy. They asked if I wanted to see about getting a CC with them since they already ran my credit report.

My question is: Do you think I should get one since they have great CC?

Since they've already pulled my Credit Report so I should take advantage of the opportunity?

Or should I just skip and continue with what I have and leave it alone?

We currently have:

NFCU: $20K

DCU: $10K

Lane Bryant: $750

Capital One: $750

Citi Plat: $4.8K

Goodyear: $5850

Sam's Club: $4.8K

Amex Zync: Charge account but highest balance is $4630

Amex HHonors: $1k

Thanks in advance

Re: Should I try for a new credit card with PenFed...

DI — Sat, 25 Jun 2011 21:25:44 GMT

Why not get a line of credit instead?

Re: Should I try for a new credit card with PenFed...

Anonymous — Sat, 25 Jun 2011 21:29:39 GMT

Ohhhh, never thought of that.

Why would you suggest it though?

Re: Should I try for a new credit card with PenFed...

DI — Sat, 25 Jun 2011 21:35:46 GMT

@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?

Carrying balances on revolving credit can ding your credit a lot more than carrying balances on installment loans. Since you all already have enough credit cards with good credit lines, adding something different to the mix would be best.

Re: Should I try for a new credit card with PenFed...

Anonymous — Sat, 25 Jun 2011 21:40:21 GMT

Okay, I'll definitely have to consider that for sure.

Thanks for the explanation!

Re: Should I try for a new credit card with PenFed...

Anonymous — Sun, 26 Jun 2011 02:55:39 GMT

@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?

Be very careful. LOCs at Penfed carry a 14.9% APR. Their credit cards generally have a much lower APR.

Re: Should I try for a new credit card with PenFed...

TangMeister — Sun, 26 Jun 2011 03:21:55 GMT

@Anonymous wrote:
@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?
Be very careful. LOCs at Penfed carry a 14.9% APR. Their credit cards generally have a much lower APR.

PenFed's Line of Credit is prime + 6% or currently 9.24% APR. Are you thinking about the Thrifty overdraft? It's 14.65%. But it would be somewhat useless for the OP anyway, because any balance on either is included in your revolving utilization percentage. Of couse, the credit limit is as well.

The only LOC I'm aware of that reports as an installment loan is Justice Federal Credit Union's LOC, regardless of how much you're approved for. It goes up to $40k.

Re: Should I try for a new credit card with PenFed...

Anonymous — Sun, 26 Jun 2011 03:30:22 GMT

@TangMeister wrote:
@Anonymous wrote:
@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?
Be very careful. LOCs at Penfed carry a 14.9% APR. Their credit cards generally have a much lower APR.

PenFed's Line of Credit is prime + 6% or currently 9.24% APR. Are you thinking about the Thrifty overdraft? It's 14.65%. But it would be somewhat useless for the OP anyway, because any balance on either is included in your revolving utilization percentage. Of couse, the credit limit is as well.

The only LOC I'm aware of that reports as an installment loan is Justice Federal Credit Union's LOC, regardless of how much you're approved for. It goes up to $40k.

There are still cheaper APRs to be had on credit cards.

Re: Should I try for a new credit card with PenFed...

Anonymous — Sun, 26 Jun 2011 03:44:25 GMT

Thank so much for the feedback. I think we'll just stick with what we have. One less piece of credit to think about. I think all we need anyway is a Mortgage now, since we do have two car payments reporting as well. The Mortgage is the only thing we're missing.

Thanks again

Re: Should I try for a new credit card with PenFed...

RockinRay — Sun, 26 Jun 2011 16:37:50 GMT

Keep paying your cards down and your score will rise.

In my mind, getting them to less than 10% utilization is the best thing to do.

Ray

Re: Should I try for a new credit card with PenFed...

Anonymous — Tue, 28 Jun 2011 03:47:03 GMT

Thanks Ray...we are definitely working on getting <10% utl.

Re: Should I try for a new credit card with PenFed...

BoSox617 — Tue, 28 Jun 2011 10:33:12 GMT

@Anonymous wrote:
@Anonymous husband and I are planning to buy a home next year. We have 9 credit cards totaling a little over $50k in credit limits. We're currently @ 51% Utl. We are paying off debt to raise our scores to 740+ by end of Summer 2012. Just a few days ago I applied for a PenFed Savings account because they offer good rates for mortgages and I didn't want to have to have my credit report pulled for the account close to when we go to buy. They asked if I wanted to see about getting a CC with them since they already ran my credit report.

My question is: Do you think I should get one since they have great CC?
Since they've already pulled my Credit Report so I should take advantage of the opportunity?
Or should I just skip and continue with what I have and leave it alone?

Hi tubesock,

If you do consider a credit product from PenFed down the line, you may want to check out this thread: http://ficoforums.myfico.com/t5/Credit-Cards/PenFed-Credit-Union-APP-results-and-FICO-SURVEY/td-p/476304/highlight/true/page/10

PenFed is inquiry sensitive, and sensitive to what they perceive to be pyramiding credit. If you decide to go for it, you may want to consider applying at least 6 months from your last inquiry, maybe more.

I really like PenFed - one of the reasons I joined is because of the potential to obtain CLIs and other products with soft inquiries only (YMMV, sometimes they will pull a hard). I have the Cashback Rewards card (which I use for the 5% off gas at the pump) - rewards are posted to each monthly statement (no need to wait to redeem in pre-determined increments, which a lot of other rewards card require).

Good luck!

Re: Should I try for a new credit card with PenFed...

Anonymous — Wed, 29 Jun 2011 04:01:44 GMT

Thanks BoSox!

That was a helpful link. I think I'm making the right choice for our particular situation right now. We really need to focus on utilization cuz it's WAY too high. Thanks for chiming in. Much appreciated.

Re: Should I try for a new credit card with PenFed...

haulingthescoreup — Wed, 29 Jun 2011 04:18:47 GMT

@DI wrote:

@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?
Carrying balances on revolving credit can ding your credit a lot more than carrying balances on installment loans. Since you all already have enough credit cards with good credit lines, adding something different to the mix would be best.

No, no, no!!!

An unsecured line of credit is revolving, not installment.

"Revolving" means that you can keep going to the well --you can borrow (charge) X amount, pay it back, and your available credit is back to the original figure. This is how lines of credit work, thus they are revolving.

Installment means that you borrow the chunk up front and gradually pay it down. But you can't go back and borrow more after you repay.

That's why home equity loans are installment, but home equity lines of credit (HELOC's) are revolving.

Re: Should I try for a new credit card with PenFed...

Anonymous — Wed, 29 Jun 2011 11:46:32 GMT

@haulingthescoreup wrote:
@DI wrote:

@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?
Carrying balances on revolving credit can ding your credit a lot more than carrying balances on installment loans. Since you all already have enough credit cards with good credit lines, adding something different to the mix would be best.
No, no, no!!!

An unsecured line of credit is revolving, not installment.

"Revolving" means that you can keep going to the well --you can borrow (charge) X amount, pay it back, and your available credit is back to the original figure. This is how lines of credit work, thus they are revolving.

Installment means that you borrow the chunk up front and gradually pay it down. But you can't go back and borrow more after you repay.

That's why home equity loans are installment, but home equity lines of credit (HELOC's) are revolving.

Some lenders (JFCU) report LOCs as "installment loans."

Re: Should I try for a new credit card with PenFed...

BoSox617 — Wed, 29 Jun 2011 11:59:58 GMT

You're welcome, tubesock - best of luck in your home purchase! It's definitely a great idea to ensure that utilization is very low when you do apply.

PenFed LOCs report as revolving.

Re: Should I try for a new credit card with PenFed...

haulingthescoreup — Wed, 29 Jun 2011 17:34:36 GMT

@Anonymous wrote:
@haulingthescoreup wrote:
@DI wrote:

@Anonymous wrote:
Ohhhh, never thought of that.

Why would you suggest it though?
Carrying balances on revolving credit can ding your credit a lot more than carrying balances on installment loans. Since you all already have enough credit cards with good credit lines, adding something different to the mix would be best.
No, no, no!!!

An unsecured line of credit is revolving, not installment.

"Revolving" means that you can keep going to the well --you can borrow (charge) X amount, pay it back, and your available credit is back to the original figure. This is how lines of credit work, thus they are revolving.

Installment means that you borrow the chunk up front and gradually pay it down. But you can't go back and borrow more after you repay.

That's why home equity loans are installment, but home equity lines of credit (HELOC's) are revolving.
Some lenders (JFCU) report LOCs as "installment loans."

Thank you, that's interesting to know.

I have a LOC from PenFed, and it's definitely revolving on my reports.

Anyway, just a caution for anyone thinking about moving debt around.

Re: Should I try for a new credit card with PenFed...

MarineVietVet — Wed, 29 Jun 2011 17:40:32 GMT

@Anonymous wrote:

Some lenders (JFCU) report LOCs as "installment loans."

I'm wondering if that applies to all LOC's from this CU or only those with a CL above a certain level?

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Should I try for a new credit card with PenFed...

visorboy1974 — Wed, 29 Jun 2011 18:45:10 GMT

@MarineVietVet wrote:
@Anonymous wrote:

Some lenders (JFCU) report LOCs as "installment loans."
I'm wondering if that applies to all LOC's from this CU or only those with a CL above a certain level?

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

I have heard all.

Re: Should I try for a new credit card with PenFed...

haulingthescoreup — Wed, 29 Jun 2011 20:00:44 GMT

For most institutions, even LOC's over a certain CL are still considered revolving, but they are excluded from the calculation of revolving util. That maybe makes it seem a bit like installment in that it doesn't affect your revolving util, but it's still revolving. Except maybe on TU, which appears to use a dartboard to determine the type with each report pulled.

HELOC's can be different, because they're secured by real estate. On my reports, my HELOC is revolving on EX, mortgage on EQ, and "Line of Credit Account/ Home Equity Loan" on TU, whatever that means.

But the PenFed plain old LOC is revolving on all three.