Personal Finance

Pay Credit Card off wholly with Line of Credit?

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  • Nov 24th, 2013 8:34 am
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[OP]
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Oct 7, 2012
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Pay Credit Card off wholly with Line of Credit?

My line of credit is from CIBC. Unsecured, prime plus 3 for 15k
I'm trying to be creative with using it as I don't have much experience with it
Can I pay off a CC with it?
Does this then add another period to having to pay off the balance interest free?
Then at end of month I pay off the LOC fully?
This make sense?
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Aug 2, 2007
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No grace period on LOC.
[OP]
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hopsoid wrote:
Nov 17th, 2013 11:26 pm
No grace period on LOC.
ah
no good then
thanks
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Jul 28, 2012
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The only reason I'd pay a credit card with a line of credit is
- if I was carrying a balance on my credit card; AND
- if the interest rate on the credit card was higher than on the line of credit.

If you like to take advantage of grace periods, then you don't need to use your line of credit yet.
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Jun 21, 2013
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In the middle of now…
If you carry a balance on your CC at a discount rate (e.g. 0% for N months), the LOC may be a good tool to temporarily move the balance to when you need to reset the N-month period.
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That is a really good rate for such a small LoC. Keep it for a rainy day.

Interest is calculated daily and payments (monthly with interest due) are usually 3% of the balance or $60, whichever is greater.

A LoC from CIBC is essentially a glorified chequing account that can go (really) negative without penalty, only interest. You can use it to borrow, pay off a credit card or consolidate your debts, however, it doesn't sound like you need to do anything with it at the moment. You could deposit money to it and use it like a chequings account to reduce your monthly banking fees (if you pay a fee) and for the free cheques. You would never pay interest (or gain interest for that matter) unless you entered negative balance territory.
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Aug 14, 2007
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I always pay off my CC in full end of each month with LOC (assuming I need to if I don't got the cash). 6.25% interest rate sure a hell of a lot better than 21% or w/e it is. I just set up automatic withdrawal 2 days before cc due
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Oct 15, 2009
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Vladimir wrote:
Nov 19th, 2013 8:56 pm
I always pay off my CC in full end of each month with LOC (assuming I need to if I don't got the cash). 6.25% interest rate sure a hell of a lot better than 21% or w/e it is. I just set up automatic withdrawal 2 days before cc due
I'm hoping that this is a stop gap to help pay off some debts. otherwise, if you're just loading up your LOC with credit card purchases, there may be problems in the future once it's close to maxed out.
[OP]
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lhsonic wrote:
Nov 19th, 2013 8:49 pm
That is a really good rate for such a small LoC. Keep it for a rainy day.

Interest is calculated daily and payments (monthly with interest due) are usually 3% of the balance or $60, whichever is greater.

A LoC from CIBC is essentially a glorified chequing account that can go (really) negative without penalty, only interest. You can use it to borrow, pay off a credit card or consolidate your debts, however, it doesn't sound like you need to do anything with it at the moment. You could deposit money to it and use it like a chequings account to reduce your monthly banking fees (if you pay a fee) and for the free cheques. You would never pay interest (or gain interest for that matter) unless you entered negative balance territory.
Thank you!
I'm trying to be as careful with it as I can. I was "learned" years back with CC's and am now trying to build solid foundation for moving forward. The LOC was offered to me when chatting with rep about parent's account...just out of the blue said I was pre-aproved. Had never taken loan, or even owe any money, and that's why so curious to see if anyway to create extra revenue from this loc
[OP]
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airodyssey wrote:
Nov 17th, 2013 11:32 pm

If you like to take advantage of grace periods, then you don't need to use your line of credit yet.
I love grace periods! Combining always keeping next month's balance due in my savings in advance, is good discipline for me, and keeps my budge in line. You also get all that time with interest and makes me feel secure. Using Cashback card also just adds to the stacking effect, gravy on top.
I was hoping that LOC could yet another level to the stack, but seems not.
Great feedback on this topic on using LOC's
I'm learning ++
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Mar 23, 2009
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Yeah, be careful. LOCs are great if you use them effectively and conservatively, but too many people just see them as free cash. And even if you have a conservative approach right now, the loan-increase-creep can get you. If you slowly accumulated credit card debt in the past, it's just as easy to slowly accumulate LOC debt as well.
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Apr 1, 2009
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The interest on a LOC is calculated daily and placed on the account monthly. No grace period here.
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Nov 2, 2008
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Almost better off getting the MBNA 0% for 12 months, paying the 150$ in 'fees' for one time balance transfer, and keep flipping it back and forth until its paid for.

Maximizes any interest in savings accounts, whilst eliminating the ~19% interest off a CC. I do this personally for school, or expenses [2k this summer to fix transmission in car] at odd times so that i don't lose out on my interest in my accounts. I have the cash available to pay for, but rather spend 20$ once for a BT on a 2000$ CC, and take the 10 months to pay it off or whatever, while I keep building my savings/chequing with maximizing what I have in the account.

I'm a fan of it, as you can tell, since its one of those rare things that helps you use the banks money to pay off the bank with little surcharges and effort on your part.
[OP]
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mmagda wrote:
Nov 20th, 2013 4:20 pm
Almost better off getting the MBNA 0% for 12 months, paying the 150$ in 'fees' for one time balance transfer, and keep flipping it back and forth until its paid for.

Maximizes any interest in savings accounts, whilst eliminating the ~19% interest off a CC. I do this personally for school, or expenses [2k this summer to fix transmission in car] at odd times so that i don't lose out on my interest in my accounts. I have the cash available to pay for, but rather spend 20$ once for a BT on a 2000$ CC, and take the 10 months to pay it off or whatever, while I keep building my savings/chequing with maximizing what I have in the account.

I'm a fan of it, as you can tell, since its one of those rare things that helps you use the banks money to pay off the bank with little surcharges and effort on your part.
I didn't understand much about bt' ing till a few months ago and much reading of RFD
I've become a fan of it as well

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