25 Apr Shopping for My Line of Credit – Conclusion
As I’ve done for every post in this series, I’ll once again provide you the links to two templates that will help you get started putting your lazy dollars to work 24/7. My hope is that you will soon be making money off the bank the same way they’ve been using your idle dollars that sit in your checking account.
Templates for Your Use
To help you identify the steps to get started and easily track your progress, I created a simple list of action items called Your Next Step Checklist.
To keep track of the features offered by financial institutions in your area, use this second template called Your Line of Credit Shopping Comparison.
Credit Card vs. a Line of Credit
Believe it or not, a credit card is a line of credit. One of the biggest differences is the interest rate charged and the process for qualifying. Since most credit cards aren’t secured, the rate is higher than a home equity line of credit and your rate will be heavily dependent upon your credit score. Consequently, your application will be processed quickly. Many credit cards offer many of the same features as home equity and personal lines of credit. So, this is another reason why it’s important to shop around.
The Ideal Features of a Line of Credit
If you were to ask me what are the most important features that I’d want in my line of credit, here’s my wish list of features.
My Checking Account is Linked to My Line of Credit
If this isn’t an option, I’m looking for free overdraft protection.
Payments Can Be Greater than My Balance
As we discussed in my last post, this minimizes my average daily balance thereby lowering the interest that I’ll pay.
Credit Balances Can Be Carried for 30 Days:
I won’t be needing it for a full 30 days. I want to be sure that the balance won’t be immediately moved to my checking account.
Maximum and Minimum Interest Rates:
What’s the highest the interest rate can go? Similarly, what’s the lowest the rate will be allowed to fall. Most probably, in the current low interest environment, the current rate is probably already at its lowest.No Fee for On-Line Transfers:When dollars are moved from your line of credit to your checking account, are there any transaction fees? Hopefully, there are none!
Fees to Open the Line of Credit:
Rarely is it free to open a line of credit. This one time cost is the least of my concerns.
Minimum Period for Termination Fees
In the rare event you find a no fee line of credit, they will want you to keep the line open for a period of time. This doesn’t mean you have to carry a balance. It means the line of credit is available for your use. Know the period of time and the prepayment penalty. It’s rarely an issue; nevertheless, it’s information that you need to know!
Ready to start your journey towards financial freedom? Get started today!
I’d love to hear from you. Please send your questions, topics or suggestions to email@example.com. You can also follow me on twitter at Dennis Williams Jr @ cash_map.