Why, When and How to use a CLOC

[Anonymous]

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@sarge12 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, 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

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NFCU CLOC does not have the option to transfer monies from your NFCU CLOC to your NFCU checking.

[sarge12]

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@Anonymous wrote:

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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%.

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Love credit unions....according to NFCU website it also has no cash advance fee, but does charge 2% more interest on cash advances than purchases. Why people are still using banks for anything except PIF credit cards is beyond my capacity to understand. Every thing is a better deal at credit unions except SUB and rewards on cards that are PIF.

[Anonymous]

Thank you all for your responses and sharing your experiences. I truly appreciate it!