Why, When and How to use a CLOC

[Anonymous]

Hi Everyone,

I recently applied for a CC with NFCU (I was aproved ) and was asked if I wanted a Checking Line of Credit. The rep explained that it comes in handy in an emergency where a pet needs the vet, unforseen medical expenses, fridge goes out etc.. I went ahead and signed up for it and was approved for 15k. I'm not quite sure how it works if and when I would need to use it. I want to fully understand it now rather than try to figure it out during a hectic situation.

Let's say te fridge needs to be replaced and I only have $1200 in checking and the fridge costs $2200. Would I use my debit card to pay, and the CLOC would kick in after $1200? 

Does it report to the CB like a loan?

After I pay off the money I borrowed from it, is the CLOC available again? 

What if I am still paying the money I borrowed for the fridge off and something else happens where I need an additional $1000, would I be able use the CLOC? 

How have you used your CLOC?

What has your experience been?

[sarge12]

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@Anonymous wrote:

Hi Everyone,

I recently applied for a CC with NFCU (I was aproved ) and was asked if I wanted a Checking Line of Credit. The rep explained that it comes in handy in an emergency where a pet needs the vet, unforseen medical expenses, fridge goes out etc.. I went ahead and signed up for it and was approved for 15k. I'm not quite sure how it works if and when I would need to use it. I want to fully understand it now rather than try to figure it out during a hectic situation.

Let's say te fridge needs to be replaced and I only have $1200 in checking and the fridge costs $2200. Would I use my debit card to pay, and the CLOC would kick in after $1200? 

Does it report to the CB like a loan?

After I pay off the money I borrowed is the CLOC available again? 

What if I am still paying the money I borrowed for the fridge off and something else happens where I need an additional $1000, would I be able use the CLOC? 

How have you used your CLOC

What has your experience been?

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I can only speak of how it works at my credit union which is not NFCU, so may be different. I have a CLOC which will be used automaticly in an overdraft situation by transfering funds in $100 increments to checking thus preventing an overdraft. I can also transfer funds from CLOC on credit union website up to my 8K limit. It shows as a credit line online now with a 0 balance. If it had a balance it would have a minimum monthly payment just like a credit card. The interest is also the same 8.95% as the credit unions credit card, but the interest on the CLOC begins when used just like a cash advance on the credit card does. It also figures into the revolving credit utilization on the credit reports. It also causes an annual credt HP to verify my credit still meets the standards for the CLOC and I believe the CC also, but I doubt NFCU does the annual HP part, as my credit union is smaller and very conservative. I would imagine every thing else would work in a similar way, but that is just a guess.

[sarge12]

I want to add that my credit union being a smaller and much more conservative credit union does not at all necessarily work the same as NFCU. My credit union is stricter on credit than most, but also has benefits most do not provide. For instance the credit card does not charge a fee or a higher interest rate for cash advances than they do for purchases, the only difference between the 2 is purchases have a grace period to avoid interest and purchases have a 1% rewards as gift cards. I know of no other financial institution that does not charge either higher interest or a fee for cash advances on the credit card. Most charge both a fee and a higher interest rate. It also charges the same 8.95% for balance transfers...also without any fees. The other credit union I belong to is also smaller local credit union, and the interest on my credit card there is 6.99% and my auto loan interest is 1.75% on a 2015 used auto loan (actually for my neice, and she pays it). I love my local credit unions. One was for where I worked, the other was through my sisters employment.

[sarge12]

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@Anonymous wrote:

Hi Everyone,

I recently applied for a CC with NFCU (I was aproved ) and was asked if I wanted a Checking Line of Credit. The rep explained that it comes in handy in an emergency where a pet needs the vet, unforseen medical expenses, fridge goes out etc.. I went ahead and signed up for it and was approved for 15k. I'm not quite sure how it works if and when I would need to use it. I want to fully understand it now rather than try to figure it out during a hectic situation.

Let's say te fridge needs to be replaced and I only have $1200 in checking and the fridge costs $2200. Would I use my debit card to pay, and the CLOC would kick in after $1200?    Yes, or you could transfer from it to checking within limit.

Does it report to the CB like a loan?   No..like a credit card...it is revolving credit.

After I pay off the money I borrowed from it, is the CLOC available again?    It is available as long as the minimum at least is paid, even if a balance exists.

What if I am still paying the money I borrowed for the fridge off and something else happens where I need an additional $1000, would I be able use the CLOC? 

How have you used your CLOC?   Yes... once, paid in full 3 days later

What has your experience been?    It's a good safety net, but I never carry a balance on revolving credit anymore.

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From NFCU website

[medicgrrl]

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@Anonymous wrote:

Hi Everyone,

I recently applied for a CC with NFCU (I was aproved ) and was asked if I wanted a Checking Line of Credit. The rep explained that it comes in handy in an emergency where a pet needs the vet, unforseen medical expenses, fridge goes out etc.. I went ahead and signed up for it and was approved for 15k. I'm not quite sure how it works if and when I would need to use it. I want to fully understand it now rather than try to figure it out during a hectic situation.

Let's say te fridge needs to be replaced and I only have $1200 in checking and the fridge costs $2200. Would I use my debit card to pay, and the CLOC would kick in after $1200? Yes

Does it report to the CB like a loan? Yes, but more like a credit card...reports as revolving

After I pay off the money I borrowed from it, is the CLOC available again? Yes

What if I am still paying the money I borrowed for the fridge off and something else happens where I need an additional $1000, would I be able use the CLOC?  Yes

How have you used your CLOC? I used NavCheck to pay my state and fed taxes because the interest was cheaper than the cost of using my credit card.  There was a fee to pay with a credit card.

What has your experience been?  It's a great option when a credit card is not.  You can write a check to pay when cc's aren't accepted.  It's easy to transfer money to pay it back.  Just an FYI, they do something weird the night a payment is posting...the payment "disappears" from everywhere and it looks like you haven't paid or something.  Don't be fooled into making a second payment, just wait until the next day and confirm your payment has posted.  I definitely wouldn't carry a long term balance on it because of the interest accruing from day one.  If you have something long term, check for 0% on cc's first, if you can.

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[sarge12]

@medicgirl.....Had I known you were posting that I could have skipped answering the questions, as you were already answering them better than I was, so we were typing pretty much the same answers at the same time.

[medicgrrl]

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@sarge12 wrote:

@medicgirl.....Had I known you were posting that I could have skipped answering the questions, as you were already answering them better than I was, so we were typing pretty much the same answers at the same time.

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Great minds and all that LOL

[SouthJamaica]

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@medicgrrl wrote:

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@Anonymous wrote:

Hi Everyone,

I recently applied for a CC with NFCU (I was aproved ) and was asked if I wanted a Checking Line of Credit. The rep explained that it comes in handy in an emergency where a pet needs the vet, unforseen medical expenses, fridge goes out etc.. I went ahead and signed up for it and was approved for 15k. I'm not quite sure how it works if and when I would need to use it. I want to fully understand it now rather than try to figure it out during a hectic situation.

Let's say te fridge needs to be replaced and I only have $1200 in checking and the fridge costs $2200. Would I use my debit card to pay, and the CLOC would kick in after $1200? Yes

Does it report to the CB like a loan? Yes, but more like a credit card...reports as revolving

After I pay off the money I borrowed from it, is the CLOC available again? Yes

What if I am still paying the money I borrowed for the fridge off and something else happens where I need an additional $1000, would I be able use the CLOC?  Yes

How have you used your CLOC? I used NavCheck to pay my state and fed taxes because the interest was cheaper than the cost of using my credit card.  There was a fee to pay with a credit card.

What has your experience been?  It's a great option when a credit card is not.  You can write a check to pay when cc's aren't accepted.  It's easy to transfer money to pay it back.  Just an FYI, they do something weird the night a payment is posting...the payment "disappears" from everywhere and it looks like you haven't paid or something.  Don't be fooled into making a second payment, just wait until the next day and confirm your payment has posted.  I definitely wouldn't carry a long term balance on it because of the interest accruing from day one.  If you have something long term, check for 0% on cc's first, if you can.

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+1

[Anonymous]

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@sarge12 wrote:

I want to add that my credit union being a smaller and much more conservative credit union does not at all necessarily work the same as NFCU. My credit union is stricter on credit than most, but also has benefits most do not provide. For instance the credit card does not charge a fee or a higher interest rate for cash advances than they do for purchases, the only difference between the 2 is purchases have a grace period to avoid interest and purchases have a 1% rewards as gift cards. I know of no other financial institution that does not charge either higher interest or a fee for cash advances on the credit card. Most charge both a fee and a higher interest rate. It also charges the same 8.95% for balance transfers...also without any fees. The other credit union I belong to is also smaller local credit union, and the interest on my credit card there is 6.99% and my auto loan interest is 1.75% on a 2015 used auto loan (actually for my neice, and she pays it). I love my local credit unions. One was for where I worked, the other was through my sisters employment.

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My DCU Platinum credit card work the same way. Same interest rate on purchases and cash advances and balance transfers. No cash advance fee either. I also have a auto refinance with them at 1.74%.

[Anonymous]

My Penfed Promise works they same way. Same interest for cash advances and purchases and no cash advance fee.