@joeyv1985 wrote:Hello All,
Has anyone ever dealt with TD Bank? Tourneau, a well respected watch store, is offering 30 months interest free on some of their models and it looks like TD Bank is the financial institution behind the loan. How does an interest free loan work and will this count as a installment loan?
Inputs appreciated. Cheers.
1. Yes I have dealt with TD Bank. They are ok but nothing great.
2. The type of transaction you're referring to will be labeled in FICO as a "consumer finance account" ("CFA"), and seems to be a mild negative.
3. I have no experience with CFA's, but if my recollection of what I have read in this forum is correct, they are sometimes classified as revolvers and sometimes classified as loans, depending on how the lender structures it and reports it, but are more likely to be reported as loans.
@SouthJamaica wrote:
@joeyv1985 wrote:Hello All,
Has anyone ever dealt with TD Bank? Tourneau, a well respected watch store, is offering 30 months interest free on some of their models and it looks like TD Bank is the financial institution behind the loan. How does an interest free loan work and will this count as a installment loan?
Inputs appreciated. Cheers.
1. Yes I have dealt with TD Bank. They are ok but nothing great.
2. The type of transaction you're referring to will be labeled in FICO as a "consumer finance account" ("CFA"), and seems to be a mild negative.
3. I have no experience with CFA's, but if my recollection of what I have read in this forum is correct, they are sometimes classified as revolvers and sometimes classified as loans, depending on how the lender structures it and reports it, but are more likely to be reported as loans.
Replying to @SouthJamaica :
Per the terms of the Tourneau credit card, offered by TD Bank, your monthly payment will be set equal to your purchase amount, divided by 30. If you make payments as agreed, your purchase will be fully repaid after 30 months and no interest will accrue on the account.
The account is established as a revolving account. You'll have the option to add additional purchases to the account, financed under terms applicable to that purchase. The original 30-month purchase will be segregated and separately accounted for, although a single aggregate balance will be reported to the CRA's each month.
Replying to @joeyv1985 :
Since you state that you "have no experience with CFA's", I assume that you're speculating when you state the this account will report as a "consumer finance account" (CFA).
While it's true that some retail finance accounts, managed by separate credit issuers, as sometimes classified as CFA's by the CRA's, this is not a rule (and certainly not the case in my own experience ... retail accounts managed by WebBank, for esample, don't trigger the CFA flag). It would appear that typically only accounts owned by entities that are known to engage in higher-risk, high APR lending are assigned the CFA flag.
It would be my guess that the Tourneau credit card account wouldn't be flagged as such, TD Bank having a reputation as a mainstream lender and credit card issuer.
Unfortunately, accounts flagged as a CFA aren't actually notated as such on your credit report. The only indication that an account on your report has been flagged as a CFA is mention of such a status in the explanatory remarks of credit factors that influenced your FICO credit score. As you note, anecdotally is seems to typically have a modest impact (some comments cite instances of a more significant score hit, but I'm inclined to discount those reports somewhat). It's certainly my guess that someone with a reasonably diverse, active credit profile wouldn't see much impact.
