I use my line of credit to pay down my credit cards that I have a balance on cuz my line of credit has a lower interest rate on my credit card so that's why I use my line of credit
DJ McGrath he’s talking about buying a rental proper that cash flows meaning it comes out making profit even after paying the mortgage and bills of the house
This video answered all my questions. I got a line of credit last year but had no idea how to use it so I never did and now that I know I will never use it for sure
You pay simple interest on a line of credit and it looks like interests on LoC are less than of CC... That's why it's a powerful way to pay-off a mortgage (or any type of loan). My personal situation is this: a 5 years consumer credit with 9.52% interest and a LoC with just 7.6% interest. I have made a lump sum payment the other month, so I reduced my interest on consumer credit with 1800 monetary units (my country uses RON, instead of dollars :-) ) and it will cost me around 300 RON on interest in my LoC - a saving of 1500 RON. In conclusion, each type of credit (line of credit and credit card) have advantages, depending of specific situations.
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This can't be correct! I've heard of lower interest rates on LOC's. Also, people are putting thier entire paychecks inside thier LOC's. They must know something that you don't.
This guy is misinforming people. A credit line is not an over draft. and Credit line interest rates are generally lower than credit cards. thumbs down on this video. he does not now what he is talking about.
@@buttafinger1 Some credit lines like mine have an overdraft function but that's not the main purpose, and yes they are usually lower interest rate not only because the apr is lower but also because it is simple interest whereas car and mortgage loans are amortized interest. You can sometimes have a higher apr on a cc, loc, or HELOC and it'll cost less in interest than a lower Apr mortgage because it's simple interest, not amortized.
I have a $65,000 line of credit (5.9 fixed rate) which I barely used but you are correct that it allows my credit rating to remain strong even though I use my credit cards heavy when they average the utilization with my line of credit it shows as a fraction.
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Avg. daily balance...is the calculation for Heloc, personal line of credit, or a credit card. If you have positive cash flow every month, you can utilize these debt weapons in a good way, to save yourself a lot of interest on a home loan. No positive cash flow, it won't work. You'll need to trim your spending to create the positive cash flow, or make more money per month.
The only time I see a LOC being better than a CC is when you legitimately need to borrow a large amount and will have to make payments over time. This is especially true when you take advantage of secured LOC interest rates. But in my experience at the credit union, people used their LOC like "overdraft protection" and "weekend money". If that's how someone uses it, then I think they're doing it wrong.
COMMON CENTS MIKE well mike, I'm 32 and never had a credit card. I love to operate on the notion of not borrowing what I don't have and getting myself into unnecessary debt. Well recently I needed cash for some things I needed to take care of. I went to my credit union and asked for a small loan. I was approved and they extended me a line of credit. It was awesome to be able to just take what I needed and pay it back later to myself and cheaper than a payday loan would have been. I was so stressed about possibly having to get a payday loan. Getting approved for that line of credit took an enormous weight and fear off of me. I was able to do what I needed to do without borrowing from family or struggling to the next payday. I dont believe in credit cards unless u own a home, in which case I think a Lowe's or home depot card is acceptable. That's just my personal philosphy. I see alot of ppl in debt over credit cards. I dont think its a reasonable way to handle money. My little line of credit was sufficient and just what I needed to get me over my tough patch. Its only 2500 limit so I can't get much trouble with that
thats good mate, but you know your credit line ?? thats exactly what a credit card does its just better. you pay no interest at all. as long as you don't miss the minimum payment k. rich your credit line charges you interest as soon as u use it
@@cxrsiv3414 "you pay no interest at all. as long as you don't miss the minimum payment" wrong, you pay no interest if you pay balance in full every month, you pay minimum payment only you pay interest on the balance - the minimum.
Thanks for explaining lines of credit bro I needed this video I also just subscribe you give out excellent information but can you explain how it helps your credit
Totally wrong... LOC’s are very powerful “debt weapons” that can help you eliminate debt and give you money for investing. I used a LOC for a down payment for my home. Transferred money from my LOC and seasoned it in my checking account for 4 months. I then used the LOC as a checking account depositing all my income until I needed it. Using this strategy with credit cards also has greatly benefited me.
Luckygirl3157 From the Islands i would love to get more info on this from you, been dping some research and currently learning how to apply this method to my finances. Many Thanks
Lawrence Harrod ..... what helped me where videos on “debt weapons “ from VIP financial, “truth in equity “ and “ replace your mortgage “. I just understood the math and saw how a LOC could quickly eliminate amortized debt. Also, you eliminate the interest in the line of credit by parking your paycheck in it until you need the funds
Luckygirl3157 From the Islands Yes, I've been watching their videos and reading up on it. I guess there are a couple of specifics I'm still unclear about. For instance to not pay interest on the LOC you have to paycheck park the amount you took out correct? In your case you took 25k from your LOC and applied it to your mortgage, but how did you avoid not paying interest on that 25k at the end of the month? Second, when you want to pull money from your LOC after you paycheck park for living expenses and bills how do you do so without leaving yourself subject to get charged interest each month. I hope what I'm asking makes sense? Lastly, when you acquired the LOC do they ask what you need it for? In my case I want to use this process to pay down student loans while removing the actual debt from my credit report. Truly appreciate your help on this!
Lawrence Harrod ....paying interest will be unavoidable. I did not use the full amount from the LOC. I only pulled out what I knew I could zero out in a year or so. When you paycheck park you are not paying interest on the amount “parked”. When I applied for the LOC I told them it was for debt consolidation and a trip. It is possible to use a credit card to use this strategy.
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Hello great and detailed video! Thank you very much. I was researching HELOC and notice some people actually use lines of credit in a special strategy to pay down their mortgage debt quicker than the average amortized way most non HELOC customers do. Have you heard of this? Since you have a line of credit?
I’m doing this with a $25000 LOC. Lines of Credit are very powerful tools. So far I have not paid anything extra to my new mortgage (3 months old with only 15% equity.). I have been paying down my non mortgage debt quickly by using my LOC as a checking account. I plan on making a lump sum payment on my mortgage by July 2018 as my LOC should be zeroed out by then.
So they're using their HELOC to pay down their mortgage loan? I don't see that very often. However if the heloc has a low enough rate and they can apply the funds towards other high rate consumer debts like credit cards and personal loans, then yeah that makes sense to me.
Here in Canada LOC are way better in interest than credit card, I’ve had one for months now and never used it. You do have to pay $25 monthly fee for having it. My opinion if you can get one at low interest take it and pay off your CC if the interest is way better.
COMMON CENTS MIKE laws are different between Canada and the US, I was born and raised in the states but have to say banks here in Canada follow laws a lot better than the US counterparts. Overall I love having the RLOC and my interest is 7% which way better than CC which are typically 14.9 for business or bank employee or 19.9% for just about everyone else of course there is some exceptions but generally those are the fees.
COMMON CENTS MIKE I do love having my credit cards though, I own a small business and spend lots on the business credit card and personal, they are both from the same bank and both have aeroplan miles which pay for the family trip each year. Now the planes tickets alone are more than 5k for the whole family, I also have have the America express aeroplan as well, I pay a really high annual fee but the perks I get for that one are amazing.
Nice educational video, I was wondering if you could do a video on those airline credit cards you mentioned in this video. I was looking into doing something similar where I can earn miles and still pay off everything like normal..thanks
Not always. There are some credit cards with lower rates than LOC's. Plus the whole point I wanted to make is that you can avoid paying interest entirely on the CC.
COMMON CENTS MIKE Interest rates depends on several factors. Banks calculate your Total debt to ratio and your credit history. I agree with you about avoiding to pay interest but credit cards are not even better. At the end of the day, it depends on your need. I have several pre-approval offers from my bank and I refuse to take it because I don’t need it.
Wrong, I just got a line of credit 7.45% interest rate, compared to a 13% interest rate on a Visa. I also received a Mastercard which you can use the same as a credit card and can go and pull money out without a cash advance interest rate of 21% there is no fee.
Yeah my credit union's LOC incurred interest as soon as it was used, however it worked the other way for the credit cards. As long as you paid off the statement balance by the due date then you didn't have to pay any interest.
Hi, great video, thank you! How one can estimate if he\she has enough credit score in order to apply for a Line of Credit? Can such application being denied, and if so, does it end up as a hard pull? I understand that all banks do it differently, but how it's usually happens? I'm just starting to build my credit, is it worth trying to apply for LoC to accelerate this process? How do you think?
I truly cannot tell you because every bank/credit union has their own rules. In another comment you mentioned that you had a secured card, I would stick with that for a while since it will still do a great job of building credit.
I'm trying to get a new roof put on the house and pay off the remainder of a loan on my car. Only about 2000. So I'm trying to do two things. I applied for a personal loan and was accepted with the interest rate of 8.75%. Over a period of 72 months but, the finance charge is an additional 2300. The upside is I can afford the monthly payments with the personal loan at $144 a month. The personal line of credit I was quoted a monthly payment of $160 a month and the interest rate is 2%. But I'm still unclear about personal lines of credit. I really don't know if it's right For me.
I would say when in doubt, go with the lower rate BUT I've never heard of a 2% LOC, so definitely make sure you understand the terms. Out of curiosity, do you have equity in the vehicle since you owe very little?
Hi there, quick question- on a credit card, inactivity negatively affects your credit score. Does this stay the same with a line of credit as well? Can I not use it at all?
I just got my first discover credit card to build up my credit 📊with $500 line and I used like $14 I feel like I messed up bc I used it ,will I pay interest? Is it never good to use credit line?? One thing for sure is I’ll always pay on full
I've heard of people using a LOC to pay chunks off their mortgage at regular interval - which they say reduces interest. I checked my Bank's LOC interest rate and it says it's prime (3.x%) plus a couple of percent - which is a good bit higher than the current quoted mortgage rates of 2.69% or 3.09% - Does the interest work differently for each? I'm confused how this works
@@commoncentsmike7733 It works because mortgage is amortized interest and lines of credit are simple interest. A 6% amortized mortgage is about equal to a 21 percent simple interest loc or cc. Beside your money doesn't stay in long enough to gather much interest because your entire income is flowing thru the line of credit or cc and it basically becomes your checking account. The rich have been doing it forever. It allows to pay down debt rapidly and increases cash flow even if your income doesn't increase but you have to do it right. Look up Denzel Rodriguez, Mike Adams, or the velocity channel.
Don't be proud of not using it. You're not understanding why you should use it if you don't. And it's costing you money, if you're paying on a 10, 15, 20 or 30 year conventional mortgage.
If one gets approved a LOC for let's say $15.000, should I take it as a way to maintain/improve my Credit Record, or should I better ask for a reduction to lets say $1000. Will the $15.000 reduce my potential debt level if in the future I ask for a Mortgage or bigger type of Loan?
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So my father wants me to open up a line of credit for him to use, because currently him and my mother are unemployed due to health issues. Should I do it to help him, or would it be unwise?
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For a totally unsecured loan? Doesn't seem that high. But overall, thats still going to be a good chunk of interest. Are you already cash flowing with your business?
I mean technically a credit card is is a line of credit, but there are specifically loans called a "line of credit". It's a revolving loan without a card to access it.
what do you recommend if a line of credit was open unauthorized and the notery was fake and the CA Agnotagment was a photocopy and the bank never turned back in there jurnerals but I paid the 216k LOC and I paid in full 100k LOC WELLS FARGO staff imbasiled
Really!...people get/use it to remodel there home or you pay off your car payment or credit cards,then cancel the credit card....apparently your not a home owner and use credit cards just for points....smh!
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Some PLOC'S have lower interest than credit cards. They definitely have lower interest than store cards. I've been getting a letter from my local bank every few weeks that I'm preapproved for a unsecured 5k. Does it help keep your utilization low? Does it report on time payments made if you use it? I was thinking of accepting the offer to add to my credit. I'm in the process of building my credit now. My credit is good but not in the excellent range yet. I was also considering using it, if I got it to combine it with some money I saved to purchase some stocks I'm considering. For the most part it would go unused. But this was one idea I had if I were to use it. I was also considering using it to open a few more savings accounts with various banks to get the sign up bonus since it comes with checks that you can write. I would do all this in small increments so I wouldn't incur too much debt at one time. Having different relationships with different banks makes it easier to get their credit cards if you should ever need one. As I'm starting to rebuild my credit, I find myself churning credit cards for the sign up bonus and 0% introductory apr. I would appreciate some feedback on my strategy for using a PLOC. After I'm done using it. I will use it like you use yours. Thanks in advance for your time.
If you don't really need it, or you already have one, I wouldn't suggest adding unnecessary trade lines. It's not that you can't make it work, I just personally wouldn't do it. I would also very much advise against using borrowed funds to invest. If it goes south then it gets bad quickly.
what do you think about utilazation myth? some said pay it in full some say pay it but leave 5$ balance? Becoz Credit is the ability to payconsitantly a dept over a time period so if you paid in full every month there is no dept
Hi, i had a question. I've been seeing videos (reaearching ways to my student loan debt) and they have mentioning, opening a peraonal line of credit, & using it to help pay down the debt. Is there any benefit at all to this method? Thank you for this video.
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No. its more like a credit card without all the BS fees associated with it. Oh and you can use checks to pay for things that require cash. Credit cards cant do that without cash advance fees.
Dude, you have absolutely no idea what you're talking about.....I have a $15,000 LOC for over ten years now and have never not once ever used it to cover a stupid ass overdraft fee as you mentioned...WTF???...people that have line of credits usually make investment moves..not cover overdraft fees...WTF are you even talking about?....
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I use my line of credit to pay down my credit cards that I have a balance on cuz my line of credit has a lower interest rate on my credit card so that's why I use my line of credit
Rookie!!!. Lines of credit is powerful way of getting cash for cash flow investments in real estate etc.
Yes but I think he's talking to the newbies the ones who are just wanting to build credit and give am intro to what it is
That's exactly the info that I was taught recently.. still learning.
What are cashflow investments in real estate. Can anyone explain?
DJ McGrath he’s talking about buying a rental proper that cash flows meaning it comes out making profit even after paying the mortgage and bills of the house
Can someone expand on how a LOC is a good way to get cash for investing in Real State VS a Mortgage? Is that what
Dave Santiago
means?
2 words - Velocity Banking
As someone who works in rye finance sector, these videos are an amazing resource. Keep up the great work!
This video answered all my questions. I got a line of credit last year but had no idea how to use it so I never did and now that I know I will never use it for sure
Glad you liked the video! Let me know if you have any future video suggestions.
Thanks for this! I just got a line of credit and now I understand it more and I will not be touching it at all! Thank you thank you!
Nice! Even if you don't use it, it will still help build credit in the long run.
You pay simple interest on a line of credit and it looks like interests on LoC are less than of CC...
That's why it's a powerful way to pay-off a mortgage (or any type of loan).
My personal situation is this: a 5 years consumer credit with 9.52% interest and a LoC with just 7.6% interest.
I have made a lump sum payment the other month, so I reduced my interest on consumer credit with 1800 monetary units (my country uses RON, instead of dollars :-) ) and it will cost me around 300 RON on interest in my LoC - a saving of 1500 RON.
In conclusion, each type of credit (line of credit and credit card) have advantages, depending of specific situations.
Yup, he missed alot of info
@tiannah mills That has nothing to do with this video
What bank did you get a LOC with?
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This can't be correct! I've heard of lower interest rates on LOC's. Also, people are putting thier entire paychecks inside thier LOC's. They must know something that you don't.
This guy is misinforming people. A credit line is not an over draft. and Credit line interest rates are generally lower than credit cards. thumbs down on this video. he does not now what he is talking about.
@@buttafinger1 Some credit lines like mine have an overdraft function but that's not the main purpose, and yes they are usually lower interest rate not only because the apr is lower but also because it is simple interest whereas car and mortgage loans are amortized interest. You can sometimes have a higher apr on a cc, loc, or HELOC and it'll cost less in interest than a lower Apr mortgage because it's simple interest, not amortized.
OMG!! WHY DIDN'T I FIND YOU EARLIER THIS YEAR :( THANK YOU FOR ALL THE INFO .
Most welcome! Thanks for the feedback!
Thank you! I did learn something new. You just got another subscriber.
Sorry for the late reply, but thanks!
Love this video. Thanks for being thorough and not complicating the message.
Glad you liked it Dana!
You Must be DEBT FREE and Live in Financial Freedom. Because if not, all I have to say is VELOCITY BANKING!
What?
Had no idea all the different applications for LOC. Thanks CCM!
You're welcome! Thanks for watching!
i thought i clicked on a vsauce video
I have a $65,000 line of credit (5.9 fixed rate) which I barely used but you are correct that it allows my credit rating to remain strong even though I use my credit cards heavy when they average the utilization with my line of credit it shows as a fraction.
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Hello, Thank you for your helpful video.
Very helpful. Thank you VERY MUCH!! Question: Would opening multiple LOC w/ the intention of not using them be beneficial?
Thanks Mark. No I definitely wouldn't open up more than 1. Even then, you don't need to have one to have a high credit score.
Great video!
Great info thank you so much!!
Most welcome. Thanks for the comment!
Avg. daily balance...is the calculation for Heloc, personal line of credit, or a credit card. If you have positive cash flow every month, you can utilize these debt weapons in a good way, to save yourself a lot of interest on a home loan. No positive cash flow, it won't work. You'll need to trim your spending to create the positive cash flow, or make more money per month.
Thank you for the informative video!
Most welcome, thanks for taking the time to comment!
there are other variables you are missing of course size of line comes into play
reason to use are many
The only time I see a LOC being better than a CC is when you legitimately need to borrow a large amount and will have to make payments over time. This is especially true when you take advantage of secured LOC interest rates. But in my experience at the credit union, people used their LOC like "overdraft protection" and "weekend money". If that's how someone uses it, then I think they're doing it wrong.
I love my line of credit. I will never get a credit card
Do what's best for you! Out of curiosity, why do you feel that way?
COMMON CENTS MIKE well mike, I'm 32 and never had a credit card. I love to operate on the notion of not borrowing what I don't have and getting myself into unnecessary debt. Well recently I needed cash for some things I needed to take care of. I went to my credit union and asked for a small loan. I was approved and they extended me a line of credit. It was awesome to be able to just take what I needed and pay it back later to myself and cheaper than a payday loan would have been. I was so stressed about possibly having to get a payday loan. Getting approved for that line of credit took an enormous weight and fear off of me. I was able to do what I needed to do without borrowing from family or struggling to the next payday. I dont believe in credit cards unless u own a home, in which case I think a Lowe's or home depot card is acceptable. That's just my personal philosphy. I see alot of ppl in debt over credit cards. I dont think its a reasonable way to handle money. My little line of credit was sufficient and just what I needed to get me over my tough patch. Its only 2500 limit so I can't get much trouble with that
thats good mate, but you know your credit line ?? thats exactly what a credit card does its just better. you pay no interest at all. as long as you don't miss the minimum payment k. rich your credit line charges you interest as soon as u use it
@@cxrsiv3414 "you pay no interest at all. as long as you don't miss the minimum payment" wrong, you pay no interest if you pay balance in full every month, you pay minimum payment only you pay interest on the balance - the minimum.
yes @@fariss.alboughaz that is correct, my mistake that is what i was meaning though
Thanks for explaining this, I’m very new to this and you gave me a better understanding.
Most welcome man, thanks for taking the time to comment!
in have a line of credit/ personal loc which has a low interest compare to CC and i think loc is always better and harder to get, and no annual fee
My LOC is 10% & I know of others who have theirs for 7% but we don't pay the interest because of the way we use our LOC.
Thanks for explaining lines of credit bro I needed this video I also just subscribe you give out excellent information but can you explain how it helps your credit
Totally wrong... LOC’s are very powerful “debt weapons” that can help you eliminate debt and give you money for investing. I used a LOC for a down payment for my home. Transferred money from my LOC and seasoned it in my checking account for 4 months. I then used the LOC as a checking account depositing all my income until I needed it. Using this strategy with credit cards also has greatly benefited me.
Luckygirl3157 From the Islands i would love to get more info on this from you, been dping some research and currently learning how to apply this method to my finances. Many Thanks
Lawrence Harrod ..... what helped me where videos on “debt weapons “ from VIP financial, “truth in equity “ and “ replace your mortgage “. I just understood the math and saw how a LOC could quickly eliminate amortized debt. Also, you eliminate the interest in the line of credit by parking your paycheck in it until you need the funds
Luckygirl3157 From the Islands Yes, I've been watching their videos and reading up on it. I guess there are a couple of specifics I'm still unclear about. For instance to not pay interest on the LOC you have to paycheck park the amount you took out correct? In your case you took 25k from your LOC and applied it to your mortgage, but how did you avoid not paying interest on that 25k at the end of the month? Second, when you want to pull money from your LOC after you paycheck park for living expenses and bills how do you do so without leaving yourself subject to get charged interest each month. I hope what I'm asking makes sense? Lastly, when you acquired the LOC do they ask what you need it for? In my case I want to use this process to pay down student loans while removing the actual debt from my credit report. Truly appreciate your help on this!
Lawrence Harrod ....paying interest will be unavoidable. I did not use the full amount from the LOC. I only pulled out what I knew I could zero out in a year or so. When you paycheck park you are not paying interest on the amount “parked”.
When I applied for the LOC I told them it was for debt consolidation and a trip. It is possible to use a credit card to use this strategy.
Luckygirl3157 From the Islands gotcha makes sense, really appreciate your insight, sounds like a amazing strategy. Much success to you!
I will not use my line of credit only if I really need too sounds good to me💯
I'm curious if you had to use it during this 2020 Pandemic .
If I had one I certainly would've
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Hello great and detailed video! Thank you very much. I was researching HELOC and notice some people actually use lines of credit in a special strategy to pay down their mortgage debt quicker than the average amortized way most non HELOC customers do. Have you heard of this? Since you have a line of credit?
I’m doing this with a $25000 LOC. Lines of Credit are very powerful tools. So far I have not paid anything extra to my new mortgage (3 months old with only 15% equity.). I have been paying down my non mortgage debt quickly by using my LOC as a checking account. I plan on making a lump sum payment on my mortgage by July 2018 as my LOC should be zeroed out by then.
So they're using their HELOC to pay down their mortgage loan? I don't see that very often. However if the heloc has a low enough rate and they can apply the funds towards other high rate consumer debts like credit cards and personal loans, then yeah that makes sense to me.
Luckygirl3157 From the Islands smart move! I want to do this process as well, what was your required credit score for the 25k LOC?
Lawrence Harrod .... I believe my credit score was around 670. Had a good history with the credit union I got the LOC from.
Luckygirl3157 From the Islands that's awesome happy it worked out for you, I'm working towards this however I want to apply it to my student loans
Here in Canada LOC are way better in interest than credit card, I’ve had one for months now and never used it. You do have to pay $25 monthly fee for having it. My opinion if you can get one at low interest take it and pay off your CC if the interest is way better.
Wait, you have to pay a $25 fee each month for the LOC? I've not heard of that before.
COMMON CENTS MIKE laws are different between Canada and the US, I was born and raised in the states but have to say banks here in Canada follow laws a lot better than the US counterparts. Overall I love having the RLOC and my interest is 7% which way better than CC which are typically 14.9 for business or bank employee or 19.9% for just about everyone else of course there is some exceptions but generally those are the fees.
COMMON CENTS MIKE I do love having my credit cards though, I own a small business and spend lots on the business credit card and personal, they are both from the same bank and both have aeroplan miles which pay for the family trip each year. Now the planes tickets alone are more than 5k for the whole family, I also have have the America express aeroplan as well, I pay a really high annual fee but the perks I get for that one are amazing.
Nice educational video, I was wondering if you could do a video on those airline credit cards you mentioned in this video. I was looking into doing something similar where I can earn miles and still pay off everything like normal..thanks
Yeah, check out my Capital One venture card. Did it a while back
Thanks man!!!
Useful information
LOC will give you access to additional funds at a lower interest rate when compared to a credit card.
Not always. There are some credit cards with lower rates than LOC's. Plus the whole point I wanted to make is that you can avoid paying interest entirely on the CC.
COMMON CENTS MIKE Interest rates depends on several factors. Banks calculate your Total debt to ratio and your credit history. I agree with you about avoiding to pay interest but credit cards are not even better. At the end of the day, it depends on your need. I have several pre-approval offers from my bank and I refuse to take it because I don’t need it.
Wrong, I just got a line of credit 7.45% interest rate, compared to a 13% interest rate on a Visa. I also received a Mastercard which you can use the same as a credit card and can go and pull money out without a cash advance interest rate of 21% there is no fee.
One exception doesn't make the rule. Either way, I'm glad you found something that works for you.
Thanx. Your video was practical and made sense.
Thanks Jay
On investopedia it says you don’t have to pay the interest as long as you pay it off in time
It could be different from institution to institution, but at my credit union it was structured this way.
COMMON CENTS MIKE which way? Paying interest the moment you take out or after having a balance by the next month?
Yeah my credit union's LOC incurred interest as soon as it was used, however it worked the other way for the credit cards. As long as you paid off the statement balance by the due date then you didn't have to pay any interest.
Hi, great video, thank you!
How one can estimate if he\she has enough credit score in order to apply for a Line of Credit? Can such application being denied, and if so, does it end up as a hard pull?
I understand that all banks do it differently, but how it's usually happens?
I'm just starting to build my credit, is it worth trying to apply for LoC to accelerate this process? How do you think?
I truly cannot tell you because every bank/credit union has their own rules. In another comment you mentioned that you had a secured card, I would stick with that for a while since it will still do a great job of building credit.
I'm trying to get a new roof put on the house and pay off the remainder of a loan on my car. Only about 2000. So I'm trying to do two things. I applied for a personal loan and was accepted with the interest rate of 8.75%. Over a period of 72 months but, the finance charge is an additional 2300. The upside is I can afford the monthly payments with the personal loan at $144 a month. The personal line of credit I was quoted a monthly payment of $160 a month and the interest rate is 2%. But I'm still unclear about personal lines of credit. I really don't know if it's right For me.
I would say when in doubt, go with the lower rate BUT I've never heard of a 2% LOC, so definitely make sure you understand the terms. Out of curiosity, do you have equity in the vehicle since you owe very little?
I just got it and my interest rate is 5.4 %
For a LOC thats not bad at all
Hi there, quick question- on a credit card, inactivity negatively affects your credit score. Does this stay the same with a line of credit as well? Can I not use it at all?
Vinnny Lam no, you don’t have to use it. I’ve never used mine and I’ve still got an 800+ score
I just got my first discover credit card to build up my credit 📊with $500 line and I used like $14 I feel like I messed up bc I used it ,will I pay interest?
Is it never good to use credit line??
One thing for sure is I’ll always pay on full
Thank you!
I've heard of people using a LOC to pay chunks off their mortgage at regular interval - which they say reduces interest. I checked my Bank's LOC interest rate and it says it's prime (3.x%) plus a couple of percent - which is a good bit higher than the current quoted mortgage rates of 2.69% or 3.09% - Does the interest work differently for each? I'm confused how this works
I can't see how that would work out in their favor. If the LOC is a higher rate than the MTG, how is that coming out ahead you know?
@@commoncentsmike7733 It works because mortgage is amortized interest and lines of credit are simple interest. A 6% amortized mortgage is about equal to a 21 percent simple interest loc or cc.
Beside your money doesn't stay in long enough to gather much interest because your entire income is flowing thru the line of credit or cc and it basically becomes your checking account. The rich have been doing it forever. It allows to pay down debt rapidly and increases cash flow even if your income doesn't increase but you have to do it right. Look up Denzel Rodriguez, Mike Adams, or the velocity channel.
wrong
How so?
unlike u , people like me have raked in huge cc bills which would be better paid by loc (3.2 % in canada ) compared to 22% credit card interest rate
HEY! C - Sauce here! Credit Line? *draws line on wall that ends on a symbol for in game credits from fallout 76* Hahaha no. but, YEEEESSSSSSSSS!?!?!?!
Don't be proud of not using it. You're not understanding why you should use it if you don't. And it's costing you money, if you're paying on a 10, 15, 20 or 30 year conventional mortgage.
what is the min credit score needed to be approved for a line of credit
my credit score is 590. Can I get a secured line of credit like I can get secured credit cards?
Depends on your institution really, we didn't offer them at my CU.
If one gets approved a LOC for let's say $15.000, should I take it as a way to maintain/improve my Credit Record, or should I better ask for a reduction to lets say $1000. Will the $15.000 reduce my potential debt level if in the future I ask for a Mortgage or bigger type of Loan?
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the rate is not that high.
Got %6.9 for $10k CAD. So lower than 11 is definitely possible
4.99% for 25k with tangerine here..
So my father wants me to open up a line of credit for him to use, because currently him and my mother are unemployed due to health issues. Should I do it to help him, or would it be unwise?
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Thanks liked and subscribed! Will I have to pay interest on a line of credit if I NEVER use it? (Like you)
nope!
I get credit from Slick Eddie’s Auto Repair! Sure I could get my legs broken , BUT that encourages me to make payments on time! 👍🏼
I got approved for $20K with 9% APR. No annual fee. Is this a good deal? This is for business purposes. Thanks
For a totally unsecured loan? Doesn't seem that high. But overall, thats still going to be a good chunk of interest. Are you already cash flowing with your business?
Thank you
i didnt know detroitborg had a second channel?
Are you sure I was sent a master card that said line of cridet
I mean technically a credit card is is a line of credit, but there are specifically loans called a "line of credit". It's a revolving loan without a card to access it.
what do you recommend if a line of credit was open unauthorized and the notery was fake and the CA Agnotagment was a photocopy and the bank never turned back in there jurnerals but I paid the 216k LOC and I paid in full 100k LOC WELLS FARGO staff imbasiled
Really!...people get/use it to remodel there home or you pay off your car payment or credit cards,then cancel the credit card....apparently your not a home owner and use credit cards just for points....smh!
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Some PLOC'S have lower interest than credit cards. They definitely have lower interest than store cards.
I've been getting a letter from my local bank every few weeks that I'm preapproved for a unsecured 5k.
Does it help keep your utilization low? Does it report on time payments made if you use it?
I was thinking of accepting the offer to add to my credit. I'm in the process of building my credit now. My credit is good but not in the excellent range yet.
I was also considering using it, if I got it to combine it with some money I saved to purchase some stocks I'm considering.
For the most part it would go unused. But this was one idea I had if I were to use it.
I was also considering using it to open a few more savings accounts with various banks to get the sign up bonus since it comes with checks that you can write.
I would do all this in small increments so I wouldn't incur too much debt at one time.
Having different relationships with different banks makes it easier to get their credit cards if you should ever need one.
As I'm starting to rebuild my credit, I find myself churning credit cards for the sign up bonus and 0% introductory apr.
I would appreciate some feedback on my strategy for using a PLOC.
After I'm done using it. I will use it like you use yours.
Thanks in advance for your time.
If you don't really need it, or you already have one, I wouldn't suggest adding unnecessary trade lines. It's not that you can't make it work, I just personally wouldn't do it. I would also very much advise against using borrowed funds to invest. If it goes south then it gets bad quickly.
Thanks for the reply. I'll just get it and never use it. That will help with the utilization ratio. I won't use it to invest. That'd be a bad idea.
If you pay out off in full does it charge interest
Thought it was Vsauce at the beginning of the video
what do you think about utilazation myth? some said pay it in full some say pay it but leave 5$ balance? Becoz Credit is the ability to payconsitantly a dept over a time period so if you paid in full every month there is no dept
Danny Chhann I don't think it hurts to leave like $5, but I pay in full and it still shows monthly payments/utilization. Thanks for commenting!
Hi, i had a question. I've been seeing videos (reaearching ways to my student loan debt) and they have mentioning, opening a peraonal line of credit, & using it to help pay down the debt. Is there any benefit at all to this method? Thank you for this video.
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Hello Mike, could you tell me from which bank you have line of credit? thank u
I have one with my old credit union I used to work for. More of a local place rather than a major bank.
Can you make a video on PayPal credit?
Don't you have to pay an annual fee for the line of credit?
I'm sure there might be a few who do charge, but I've never heard of one that does.
I'm totally l lost i need lines of credit right now
Just because you don't know how to use a line of credit don't mean they are worse than a credit card 😵
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So basically a line of credit is a loan.
Yeah, just one that works a little different.
No. its more like a credit card without all the BS fees associated with it. Oh and you can use checks to pay for things that require cash. Credit cards cant do that without cash advance fees.
I ask for a loan at my bank for 5gs got deny a few days later I got a letter saying I got overdraft protection up to 500 is this a line of credit
Yeah, more than likely it is. Many use if for OD protection, but they can also draw on it as well.
A credit score is a poor mans score. Follow Dave Ramsey
Dude, you have absolutely no idea what you're talking about.....I have a $15,000 LOC for over ten years now and have never not once ever used it to cover a stupid ass overdraft fee as you mentioned...WTF???...people that have line of credits usually make investment moves..not cover overdraft fees...WTF are you even talking about?....
Can i talked to u sir
Overdraft is a stupid reason for line of credit.
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THIS IS THE WORST ADVICE I HAVE EVER HEARD!!!
David Victor Kocherhans and what was wrong with the info???
WHY EXPLAIN MORE
Equitity line line of cridet master card
Great advice! Now please shave the hair off your upper lip... lol
Too true, sadly too true