Penfed Credit Union

[Anonymous]

I applied for a credit card with Penfed was turned down. I opened a checking account and they offered me overdraft line of credit. I was approved for $5,000. Is that overdraft line of credit worth it? I applied for their credit card first wondering why they can't approve that and can approve my overdraft line of credit.

[CreditInspired]

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@Anonymous wrote:

I applied for a credit card with Penfed was turned down. I opened a checking account and they offered me overdraft line of credit. I was approved for $5,000. Is that overdraft line of credit worth it? I applied for their credit card first wondering why they can't approve that and can approve my overdraft line of credit.

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Congrats on the overdraft. I think the UW criteria for CCs and ODs are different, and that’s probably why an approval for one and not the other. OD is okay in a real emergency; but the problem with an OD is that there’s no grace period like a CC so interest starts accumulating immediately, unlike the 25 days on a CC. 

[Anonymous]

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@CreditInspired wrote:

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@Anonymous wrote:

I applied for a credit card with Penfed was turned down. I opened a checking account and they offered me overdraft line of credit. I was approved for $5,000. Is that overdraft line of credit worth it? I applied for their credit card first wondering why they can't approve that and can approve my overdraft line of credit.

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Congrats on the overdraft. I think the UW criteria for CCs and ODs are different, and that’s probably why an approval for one and not the other. OD is okay in a real emergency; but the problem with an OD is that there’s no grace period like a CC so interest starts accumulating immediately, unlike the 25 days on a CC. 

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Thank you for detailed answer.

[CreditInspired]

You’re welcome.