Please note that I do not have experience with balance transferring from LOCs, so I am heavily relying on everyone here to contribute your experiences to the Quick Summary and via posting. If you have successfully balance transferred from a Line of Credit account to a Credit Card, please list the Line of Credit information and Credit Card issuer. DO NOT EXPECT ALL LOC ACCOUNTS LISTED TO BEHAVE THE SAME OR EVEN NICELY FOR BALANCE TRANSFERS. This thread is inclusive of all unsecured LOCs regardless of whether they are verified balance transfer capable.
This thread is about UNSECURED Lines of Credit (LOCs) intended for asset lite people like me who do not own property. Personal/Business LOCs offer a good way of putting cash directly into bank accounts by creating a loan which can immediately be paid off using low rate balance transfers for card issuers which allow BTs to LOCs.
Sometimes they are advertised as "Personal Loans" listing terms of payment even though in reality many are really lines of credit which you can open without borrowing and prepay without penalty.
Unsecured LOCs provide a quick way to convert credit into cash or payments as needed - without putting your home or other assets on the line. They offer you protection by granting you the ability to borrow cash or pay creditors on demand via ACH or bank check with a simple phone call or online access. They tend to offer better terms, higher credit lines, lower rates, and longer repayment periods than simple overdraft protection, therefore overdraft protection will not be the primary focus here, but some banks may have exceptional offers or generous credit lines. Please list overdraft lines within it's own section.
Should a balance transfer go awry while you have money tied up in less secure, less liquid assets such as stock, high penalty CDs, a car, etc, it may be beneficial to temporarily access a LOC to pay a high rate card instead of having additional risk with margin or by selling assets at a discount. Naturally, anything beyond very short term use will most likely kill all potential profit of your scheme. They make good emergency funds.
Basically: -Most borrowing power, lowest interest rates: HELOC (out of scope for this thread due to property requirements) -Mid-range borrowing power, mid-range interest rates: Personal Lines of Credit (focus of this thread) -Least borrowing power, highest rates: Overdraft protection
This thread is very much a work in progress, I just wanted to post it quicker for people to think about. I plan on updating this thread with more offers as time allows.
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Important information & quotes with regards to balance transfer use: (6/10/07) as per Dolmar: -"[Citi's] Ready Credit account number looks the same as a checking account number. So not sure how you would BT to it with a credit card company who refuses to BT to your checking account"
(6/10/07) as per DaveHanson: -"LOCs that can receive funds electronically from most payees are much more valuable than ones that require a paper check to be cut and mailed. I don't have BT funds targeted to a account unless I have some assurance that it will be sent electronically. Just too much hassle otherwise."
Account Comparison: Note: Not all accounts listed are ideal or even good for balance transfer use.
GTE Federal Credit Union Redi-Moni Line of Credit REPRESENTATIVE CLAIMS THIS LINE WILL NOT ACCEPT 3RD PARTY CHECKS, therefore this is NOT a good line for balance transfers -As low as 9.95% (before 50 basis point cut) -$500 to unknown maximum credit line -No transaction fee -Very easy credit union membership (minimum $10 donation to CUSavers, their organization for children. Must also have a no share account ($5 balance) and free checking account (small opening balance needed, I think $25)) -Up to 60 months $5000+, otherwise $1000 per year if less than $5000 borrowed. -No annual fee -No pre-payment penalty -Transfer Options: Transfer to checking account, use as no-fee overdraft protection, and supposedly works for debit card transactions. It is NOT directly accessible for ATM withdrawals nor bill pay...must transfer to checking first. Free ACH transfers from checking account.
U.S. Bank Premier Line of Credit -$5,000 - $25,000 -As low as Variable Prime + 1% -No Annual Fee -Rate "discounts" on all transactions over $1,000 -Transfer Options: Premier Line Access Checks, Platinum Visa Access Card or by transferring funds to a U.S. Bank Consumer Checking Account
Key Bank Personal Line of Credit -$2,000 - $30,000 -Variable Prime + 2.49% = 10.24% for excellent, 11.49% good, 13.74% average, 15.74% fair credit -$50 Annual fee -Same day approval before 4pm -Must live within the following states: AK, CO, ID, IN, KY, ME, MI, NY, OH, OR, UT, VT, or WA -Transfer Options: Convenient access through checks or transfer balances by phone or online, unlimited check writing with no fees and no minimums
Citi Flex Line of Credit -$2,000 - $25,000 -Note: This line of credit is NOT reporting my Credit Line Limit to my Equifax Credit Report, it shows as $0. -Will accept 3rd party checks -Can transfer money to your Citi checking account only, and ONLY AFTER you have paid a Citi Flex Line bill using your Citi checking account. Otherwise you can use their checks. -As low as Variable Prime + Fixed 2.99% = 8.99% -No transaction fee -No annual fee -Term 24-72 months -No prepayment penalties -Transfer options:
Pentagon Federal Credit Union (PenFed) -up to $25,000, docs req'd above $15k -Accepts Electronic Payments from 3rd Party Creditors -Variable Prime + Fixed 3% (updated quarterly) -No transaction fee -No annual fee -Transfer options:
Bank of America -up to $35,000 -8.99% to 24.99% fixed rate -3% transaction fee (min $5, no max) -No annual fee -36-84 months -No prepayment penalties -Transfer options:
HSBC Select Line of Credit
CreditOne -$500 to $50,000 -The APR may range from 7.99% to 21.99% -3% cash advance fee -12 to 96 months, any credit line less than $1000 will be assigned a 12-month term. * Repayment terms are estimated * Early payments will reduce your repayment * Additional cash advances will extend your repayment term (but may not change your monthly payment) * Fees, APR increases and late payments will extend your repayment term.
Wells Fargo Unsecured Personal Line of Credit -$5,000 to $100,000; pay stubs and or tax returns may be required -Access your line of credit via personalized drafts, telephone transfer, Wells Fargo Online®, teller, ATM card, and get overdraft protection -Starts at 8.9% if you sign up for autopay from a wells fargo account (.25% discount) -0 to $100 origination fee depending on state -$25 annual fee -Transfer options:
Personal LOC - Invitation only GE Money Line of Credit ($500 - $25,000) (MoreMonies - Invitation via Mail - May 2007) -As low as 7.99% up to around 20% standard fixed rate -up to 72 months -3% transaction fee (min $5, $85 max) -No annual fee -No prepayment penalty -Transfer options:
GE Money Line of Credit ($5,000) (Auream - Invitation via Mail - September 2006) -7.99% fixed rate -up to 72 months -No transaction fees -No annual fee -No prepayment penalty -Transfer options: Convenience checks (by request online or they'll often send promotional ones with 0 or 1.99% APRs) Online transfer from credit line to any linked bank account
Updated: 08-22-2007 - Added GTE FCU Line of Credit. 08-22-2007 - Added Citi Flex Line of Credit does NOT report my Credit Limit to Equifax. 08-25-2007 - Added CreditOne, HSBC Select and HSBC Business LOCs placeholders to be updated later. 09-25-2007 - Updated Reduced Prime Rate to 7.75% from 8.25% 09-25-2007 - Added Key Bank, U.S. Bank, updated CreditOne, added a link to the Bankrate.com under the Prime Rate 01-30-2008 - Updated GTE to include no 3rd party checks, updated prime rate, updated Penfed info to quarterly adjustments, updated Citi Flex Line to show 3rd party checks accepted, and how to transfer from your Flex line to your Citi checking account
Message edited by: djscal on 2008-06-03 16:57:33 CDT
GE Money LOC has a 3% transaction fee? I've had one of these for about 9 months now and I've used it several times and never had to pay a transaction fee. Great for laundering BT money before I had a HELOC. They recently sent me some juicy 0% and 1.99% checks, which is a nice bonus.
Kudos on your creativeness. When I trash my credit I start getting sub prime credit card offers and consolidation service letters. When my credit is about back to prime I start getting BoA and Citi to offer me personal lines of credit to consolidate all my CC debt.
Anyway I like how you are thinking. However, even when my credit is prime the best they ever offer me are still "bend me over" interest rates. In fact I have credit cards with lower rates than these "lines of credit".
I don't know, there are a lot of people on this board with sure fire 10-20% per year real estate deals. I invest in stocks and I would never feel comfortable starting with 10%+ borrowed money.
Once you get started borrowing BT money, is it really that hard to come up with places to shift it from? I haven't had problems finding a target for my BT transfers in years. Sometimes I write myself a check, sometimes transfer to a checking account, sometimes BT to another card, sometimes a debit card, etc.
I'd much rather do these things than pay a company 10% interest, even if it was for a week.
I too am interested in this topic because I do not and won't own any property for a good amount of time. So I don't qualify for HELOCs either. However, until these lines of credit crack the 10% or even 8% barrier, I don't see what good they are to me.
Auream, It's interesting that you mention different terms. I applied for a GE LOC, and received awful terms of 18.99% interest. This is probably due to my minimum automatic payments on a couple cards, request for the full $25k, request for the longest payment period, or something else, even though my FICO (not FAKO) was in the 760's when I applied.
A week later I received the Citi offer (I have credit cards with them) which gave me more than double the credit line GE offered, and that significantly lower rate without transaction fees.
I offered financial information to GE but they refused to review it saying there is no person who I can talk with or mail about rates.
If you could update the Quick Summary and post the terms of your offer(s) below mine arranged by date, it would be much appreciated.
ScootyPuffSr, I picked up the LOCs to smooth over the balance transfer game and run up balances. Not many banks want to send cash directly making it harder to run up a card just before a transfer - especially with 3% transaction fees in many cases.
About $25 in interest charges for borrowing $10,000 for a week is worth it for me. Uncapped 3% transaction fees equate to $300 if borrowing on a card temporarily, plus interest, plus transfer delays.
In many cases, you should be able to apply for a balance transfer to the LOC, find out how much you were approved for and the range in which it will most likely arrive, then withdraw money from the LOC just before the balance transfer pays the LOC.
This allows for a more flexible balance transfer game, since you can pay balances to pump up your credit score and easily generate higher balances with a LOC.
It helps fight a liquidity crunch making a LOC a good backup/insurance plan even if you never use it.
Also, making a credit line 100% available in cash in an unsecured fashion is riskier than HELOCs, so you should expect the higher rate. It is favorable to keep around even just for offers Auream mentioned.
Since this is the personal line of credit thread it should be safe to ask here.
All three companies listed so far also issue credit cards. Since this is not an equity line of credit, would taking out a LOC jeopardize your chances of getting credit line increases or large limits on new credit cards? Considering that Citi no longer allows reallocation on 0% cards this could be very costly if a large, unusued, LOC caused all your new card applications with that company to be $500 or $1000.
BoA has specifically told me at my level of income I cannot have more than $35,000 in credit card lines with them. Would applying for the LOC make them reduce my lines?
Other than the credit inquiry and the chance of lowering your credit card limits, is there any damage or risk to your credit by applying for one of the no annual fee, no application cost LOCs and then never using it?
my PLOC is prime+2%, $0 fee unlimited use, instant transfer to share/checking at CU. repayment is 1/48th term. Like X.com you can move $$ instantly like move $0.01 to checking, or savings or car payment, and back for no fee. Credit limit is 9999 without docs (score only) so its kinda weak
Great topic! Unlike ScootyPuffSr, I have had trouble finding good targets for BT money, e.g. AMEX disallows payment to a mortgage so I'm reluctant to send that to a HELOC. (I wouldn't be surprised if others have gotten away with it, but I'm fairly cautious here. I push the envelope on total utilization so I don't want any additional issues.) I've reviewed the "creative" thread several times, but the more successful the AOR, the more tricks one needs.
Since the interest rate and fees on unsecured LOC may be high, it's also worth considering a LOC secured by a CD or savings account. Both are available at many banks and credit unions, usually personal and sometimes for business.
Given a checking account at the same bank or CU, there's usually an instant online transfer from the line to checking. I agree that it's generally better to borrow from the line a few days before the incoming BT; a negative balance may raise a red flag. Or not; I'm sure it depends on the bank (and/or luck!).
Some caveats:
1. you have to have money prior to the AOR (to deposit as security), so it's best for a tag-team AOR ... or for those who keep their "rainy day fund" liquid
2. using a CD as security ties up the money ... potentially lots of money for those of us who want a high CL
3. using savings (or money market, if allowed) as security limits the choice of banks (and/or yields a lower interest rate than the typical HYS)
4. maybe I'm way too cautious, but I still wonder how many times the line can be drawn and paid in a short period of time without causing unwelcome attention. e.g. for credit cards, it's generally unwise to use-then-pay more than the CL in a single month. If the first AOR money comes in one period, and the next in the second, that's still only 2x "leverage". e.g. tying up $25K only lets one BT $50K total in a typical AOR time frame.
AMEX may be a different story. But isn't it better to find credit card with more libral terms with respect to transfering the balance to debit card etc. and start the process right there even if you have to pay interest at 7.99% (With no fee)
Citi Flex Line of Credit I guess replaces Ready Credit Line of credit I already have. I see they lowered the interest rate on new LOC except they also lowered the max limit they will issue you. Currently I have Ready Credit limit of $50K and max limit for Citi Flex is $25K. I wonder if I can convert my Ready Credit account to this and new account and keep my credit limit and lower my rate by 275 basis points.
I really dont care too much about the rate I guess. As I never drawn against either of my 2 LOC from Citibank or my Heloc.
Btw just so you know Ready Credit account number looks the same as a checking account number. So not sure how you would BT to it with a credit card company who refuses to BT to your checking account.
OP, one factor you didn't touch on is the accessibility of the target LOC for payees. Specifically, LOCs that can receive funds electronically from most payees are much more valuable than ones that require a paper check to be cut and mailed.
I don't have BT funds targeted to a account unless I have some assurance that it will be sent electronically. Just too much hassle otherwise.
As per the topic, PenFed has a nice personal LOC at prime +3, IIRC...I've never used it. They are very good about getting funds sent to them electronically.
cardjuggler said:Great topic! Unlike ScootyPuffSr, I have had trouble finding good targets for BT moneySend the BT funds to a Citi credit card. Very easy to request credit balance refund online. Problem solved.
SUCKISSTAPLES said:cardjuggler said:Great topic! Unlike ScootyPuffSr, I have had trouble finding good targets for BT moneySend the BT funds to a Citi credit card. Very easy to request credit balance refund online. Problem solved.
Except for: 1. CL on Citi much smaller than CL on AMEX (or whichever) 2. and/or have multiple cards that won't BT to checking or let you deposit a check into checking 3. do you risk a Citi refund more than once per billing period? more than twice? 4. it delays using the Citi card for BT (doesn't cost immediate lost-interest since Citi starts the 12 month clock at the BT, but still delays the next round)
Maybe #1 doesn't affect you, but it's not easy for someone else to fix. (Other issuers are often more generous than Citi so there's no way to catch up). For #2, perhaps you mostly target cards with easy BT -- but, at least for most people, that's leaving money on the table.
none of those affect me. The size of credit balance refund you get has NO relation to your Citi credit line. You can BT $10k to a citi card with $1k CL and still get your refund. #2 i dont understand - you are BTing from other cards to a Citi CREDIT card, so they will all do that BT with no problems. #3 you can request another cb refund as soon as the prior one goes through. #4 Use one of your older citi cards that no longer has any decent promos on it. Unless you have just started getting cards, most of us have an extra citi card (or 10)
This is a great topic. It can be very useful after Citi will stop issuing cards with great BT features. MoreMonies, do you know some cards that will do a BT to LOC?
SUCKISSTAPLES: Thanks a lot, this is just great news for me: Citi can give you a refund that is much larger than your CL, and it does it as soon as the previous one goes thorugh. Wonderful! Do you know if there is a limit to the number of BT for Citi cards? In the promotional BT offer on my Citi professionl it says "Pay up to 4 creditor", it doesn't mean we can do only four BTs per card per promotional offer?
SUCKISSTAPLES said:none of those affect me. The size of credit balance refund you get has NO relation to your Citi credit line. You can BT $10k to a citi card with $1k CL and still get your refund. #2 i dont understand - you are BTing from other cards to a Citi CREDIT card, so they will all do that BT with no problems. #3 you can request another cb refund as soon as the prior one goes through. #4 Use one of your older citi cards that no longer has any decent promos on it. Unless you have just started getting cards, most of us have an extra citi card (or 10)
SUCKISSTAPLES said:The size of credit balance refund you get has NO relation to your Citi credit line. You can BT $10k to a citi card with $1k CL and still get your refund. That's news to me (and to the creative ideas thread). In any case, let's move the Citi discussion there; I didn't mean to highjack OP's LOC thread.
my Quicken card kept giving me 1.9% For life (bout a year ago) i have 7 promo transfers, since i maxxed it out and they kept giving me more. The rate was superior to heloc/car loan/etc. There was no BT fee too. the minimum payment of course is 1% plus the interest on the 1.9% per month which is actually quite low cash flow wise
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