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

[Anonymous]

I understand the excitement about credit cards . I personally dont pay any interest and Ccs have grace periods ,plus rewards plus bonuses. We can actually benefit from them in a profitable way.Since i was reading a lot about CLOC from navy FCU i was like what is this CLOC? I did some googling and found out its a personal line of credit and though you have access to cash you dont have any grace period to pay it back ? So basically a wonderful way to loose money in interest? Which can range beteen 13% to 18%? I mean its guaranteed way to make sure you dont really benefit other than just have access to cash in emergency. I like personal savings or credit cards better because of not having loose money in interest. Am i unaware of any beneficial aspects of CLOC ? I would love to learn if there are any. Please do enlighten me if you feel so. Thanks ! I have learnt a lot from my fico forum and continue to learn a lot. 

[Anonymous]

Well everyone’s situation is different but I could see where it could be useful to smooth out temporary cash flow issues. Yes, there would be some interest charges but it may be worth it to some. And It could be useful to someone who needs to pay someone that doesn’t accept credit cards. For example, some contractors etc.

For us it is just there as a safety net. It’s there to smooth out any sudden “problem” and gives time to come up with a plan and access emergency funds etc. Even though we have “better” credit and emergency funds, the best time to seek credit is when you don’t need it.

YMMV so make the best decision for your situation.

[Anonymous]

Credit cards are great, but sometimes you need cash.

[Anonymous]

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.?

[Anonymous]

MFCU CLOC = a relatively easy way to be approved for $15K of available, revolving credit. Most people here are rebuilding and like to have a lot of available credit to pad their debt-to-credit ratio. I believe the majority of people that get excited about the CLOC are doing it mostly for this padding and will likely not use the CLOC for much.

The NFCU CLOC used to be called NavCheck which sounded a whole lot better.

I personally do not have a NFCU CLOC but I have a CLOC through my local bank for overdraft. Have not used it in a while but it saved my behind several times in between pay checks. 

[DaveInAZ]

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@Anonymous wrote:

Credit cards are great, but sometimes you need cash.

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Yes, but all of NFCU cards have no fee BTs or Cash Advances, if you need cash just transfer from a CC to your Navy Fed checking or savings and ACH it where you need or go to a branch and get cash. If the CLOC had a lower APR than a CC that would be one thing, but reading through the one or two NFCU threads here (cough, cough), I don't see where CLOC approvals have singnifcantly lower APRs than CC approvals.

I finally succumbed and sent a membership app in last week with NLUS San Diego membership. I plan to apply for their Platinum card which they say has the "Best interest rate of all our cards", but no purchase rewards. The Cash Rewards card doesn't appeal to me, I have more than enough cards w/1.5% rewards, and the $3k spend requirement for $200 bonus is too high IMO. The Go Rewards card doesn't appeal to me, I don't dine out very often, and have better rewards for gas & everything else.

I have a CC w/11% APR with a local Tucson CU, and I consider it as a LOC as I can move money from it my CU bank account with no fee cash advance at the same APR. I charge a small monthly insurance bill to it to keep it active & them happy, but my main reason for having it is for cash if I need it.

[Anonymous]

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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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That's a great question. Anyone?

[minski]

I have wondered the same but for PenFed's PLOC. I got it as backup but don't really have any intention of using it at the 10.xx% interest rate. I don't want to close it either since it keeps my Cash Rewards card 5% cash back on gas fee-free. 

[SouthJamaica]

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@Anonymous wrote:

I understand the excitement about credit cards . I personally dont pay any interest and Ccs have grace periods ,plus rewards plus bonuses. We can actually benefit from them in a profitable way.Since i was reading a lot about CLOC from navy FCU i was like what is this CLOC? I did some googling and found out its a personal line of credit and though you have access to cash you dont have any grace period to pay it back ? So basically a wonderful way to loose money in interest? Which can range beteen 13% to 18%? I mean its guaranteed way to make sure you dont really benefit other than just have access to cash in emergency. I like personal savings or credit cards better because of not having loose money in interest. Am i unaware of any beneficial aspects of CLOC ? I would love to learn if there are any. Please do enlighten me if you feel so. Thanks ! I have learnt a lot from my fico forum and continue to learn a lot. 

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You're forgiven.

[Revelate]

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@minski wrote:

I have wondered the same but for PenFed's PLOC. I got it as backup but don't really have any intention of using it at the 10.xx% interest rate. I don't want to close it either since it keeps my Cash Rewards card 5% cash back on gas fee-free. 

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I transferred 20 out of it into my share account, then paid it back as soon as we got to May (wanted to test FICO with a PLOC, turns out you really want to have a credit card reporting under FICO 9 and maybe FICO 8).  Prior to that it was idle for nearly 2 years with no other accounts with Penfed.