I have a good credit score and don’t normally carry a balance on my credit card, but I had some emergency expenses last month and used the credit card to handle it. I’m looking at the next few months and it will take me 4 months or so to pay it off. The interest rate on my card is 19% because I mostly use it to get points and never carried a balance on it.
I was thinking about applying for a a Personal Line of Credit through my bank to pay off the balance and then save a little on the interest. I would just make the same payments to the bank that I would have put on my credit card. Mostly I think it would make my accounting easier since I like to put monthy expenses on the card to get points and save bank card fees by just paying it all off at once, and I’m a control freak who doesn’t like not being able to ammortize payments down to the penny. I also think it would be handy to have a line of credit in the future in case I ever need a little emergency cash again. I am working on the emergency fund, but right now the majority of my savings are in long term investments and over the next year or so I am basically relying on my credit card for emergencies which, as it turns out, sucks.
Is there a downside to a Personal Line of Credit that I’m not seeing? Looking at the description on line it says there is no fee or application fee and the interest rate is fine, and I don’t see the catch. Does having an open line of credit mess up your credit score? Is there any particular reason not to do it? It seems too good to be true. Assuming you use it responsibly, is there any reason not to use it?