Question regarding PenFed Thrifty Credit Line Service

[ddemari]

I have a $500.00 thrifty, obtained as overdraft protection from access america checking account. 

I have a mindset with check writing that is I never write a check for an amount I dont have. I also never have had any type of overdraft protection on any of my checking accounts. 

I see that I can transfer funs from the thrifty into my checking, i dont need to cause I dont just need a few hollard dollars for something but just so I know about this account, my question is. I transfer say 300 into AA checking, thrifty has a payment date/ apr. I pay it off in full, no problems? Or are there fees associated with transfering the money that way? 

[Sahkuhnder]

There are no fees or costs other than the interest charges, which start immediately from the day you borrow the money (no grace period like with a credit card).

If you want money from it just go to go to "transfers" tab and click the "Transfer From:" drop-down menu and select "Thrifty Credit Service".  Select whatever account you want the money transfered to and finish the transfer.

You can pay the money back at any time. If you don't pay it in full by your next statement date then a minimum payment amount and due date will appear.

I use mine every now and then just to ensure it reports as a positive tradeline on my credit reports and so someday when I'm ready for a PenFed credit card I will have some credit history with them.

[SupraTurbo2jz]

I know this is old but I to have a question on this...is it considered revolving for utilization purposes? just trying to understand this account

[CreditDunce]

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@SupraTurbo2jz wrote:

I know this is old but I to have a question on this...is it considered revolving for utilization purposes? just trying to understand this account

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Yes, it is a revolving trade line.   FICO will count it with your credit cards for utilization and number of cards reporting a balance.  However, it shows up on your credit report as a LOC.   It is possible that a given bank may score it slightly differently with their internal credit score model.

Overdraft LOC TL's are nice in that you do not have to worry about the TL being shut down for non-usage (just keep the checking account open).   Their cons are they do not come with sign up bonuses, lower your AAoA and do not have a grace period.  

Note: there may be an exception with LOC's counting as revolving.   HELOC's over 35k-40k may count as an installment loan (this varies depending on the FICO model).   If you had a really big overdraft account, it is possible that it could be counted as an installment loan.  It is also theoretically, possible the bank/cu codes your overdraft protection as an installment loan on your credit report.  Penfed does not, but is is possible there are CU's that do not report the overdraft protection properly.

[ddemari]

Thanks for your info!