NFCU NavChek LOC Terms/Type Denial Reason?

[Menta33]

Now that I have very good credit, I decided I wanted to reduce the interest rate on my NFCU NavChek LOC.  I was told the way to do this was to reduce line from $15K to $14.5K and then apply for $15K again.  I've had this line for almost 10 years at the $15K limit.  It came back denied, told I had to wait for letter which I just got it reads:

 

• Credit is not Granted Based on Terms/Type Requested

 

Not sure what that means?  Did they enter the application incorrectly?

 

The denial also says my score was 798 with a max score of 818, so very high score.

 

Ideas on how to resolve this and get my credit back to $15K and hopefully have a better interest rate.  I'm currently at 15.9%, their lowest rate is 13.9%

Edited February 28, 2020 by Menta33
minor

[hegemony]

I don't get it. seems like a waste of time. why would you carry debt at 13.9%?

[Menta33]

It is overdraft protection, I use it for a day here or there as necessary, it helps make cash flow smooth.  I don't intentionally use it and try to avoid using it, but when It is used, I'd like the rate to be as good as possible.

[cv91915]

8 hours ago, Menta33 said:

It is overdraft protection, I use it for a day here or there as necessary, it helps make cash flow smooth.  I don't intentionally use it and try to avoid using it, but when It is used, I'd like the rate to be as good as possible.

I don't know if this is useful to your situation or not, but I'm OCD with keeping monthly expenses relatively uniform, and things like property taxes, annual or semiannual home/auto insurance payments, etc., drive me absolutely crazy.

 

I make no claims that this is rational.

 

So I opened and funded a separate savings account, and every month I transfer from checking 1/12 of the year's total irregular expenses. 

 

In the months where there is an irregular payment due, I just move the money from savings to checking and pay the bill in full.

 

I use Excel to forecast the inflow and outflow (and the account's anticipated balance at the end of each month) for three years into the future to make sure I'm contributing the correct amount each month to meet future needs.

 

I've effectively created my own "line of credit" and tied it to checking, but I receive interest instead of paying it.

 

 

 

Edited February 28, 2020 by cv91915

[centex]

The hoops being jumped through are not worth it when the two percent potentially being "saved" is still substantially higher than the same funds could be had elsewhere.  No money should ever be taken where the balance was subject to a double-digit APR!

 

If you REALLY had to have a reserve at a high APR, you would have done better to go with American Express and their personal loan which can at least be had for somewhere around eight percent (and up to $40K). 

 

And...on edit...if this is truly only being used for a "day or two" here and there, then two percent does not make a difference.  You are literally talking about less than a dollar per day.  So, if this was ONLY a day or two, the hoops are NOT worth 83 cents a day.  My time (and hopefully yours) is worth far more than that...

Edited February 28, 2020 by centex

[Menta33]

34 minutes ago, centex said:

The hoops being jumped through are not worth it when the two percent potentially being "saved" is still substantially higher than the same funds could be had elsewhere.  No money should ever be taken where the balance was subject to a double-digit APR!

 

If you REALLY had to have a reserve at a high APR, you would have done better to go with American Express and their personal loan which can at least be had for somewhere around eight percent (and up to $40K). 

A personal loan is not a LOC.  I cannot get a personal loan for overnight on demand at random points throughout the year.

[centex]

32 minutes ago, Menta33 said:

A personal loan is not a LOC.  I cannot get a personal loan for overnight on demand at random points throughout the year.

You take the funds and put them into savings...saves the entire notion of needing the LOC.  

[Menta33]

5 hours ago, cv91915 said:

I don't know if this is useful to your situation or not, but I'm OCD with keeping monthly expenses relatively uniform, and things like property taxes, annual or semiannual home/auto insurance payments, etc., drive me absolutely crazy.

 

I make no claims that this is rational.

 

So I opened and funded a separate savings account, and every month I transfer from checking 1/12 of the year's total irregular expenses. 

 

In the months where there is an irregular payment due, I just move the money from savings to checking and pay the bill in full.

 

I use Excel to forecast the inflow and outflow (and the account's anticipated balance at the end of each month) for three years into the future to make sure I'm contributing the correct amount each month to meet future needs.

 

I've effectively created my own "line of credit" and tied it to checking, but I receive interest instead of paying it.

 

 

 

This wouldn't work for me as the savings I would create would be inferior to the earnings I would forgo by removing money from investments that are substantially more lucrative than a savings account.

[Menta33]

1 hour ago, centex said:

You take the funds and put them into savings...saves the entire notion of needing the LOC.  

That would be very inefficient.  Borrowing funds at all times instead of an occasional overnight would be wasteful interest incurred.

[centex]

50 minutes ago, Menta33 said:

That would be very inefficient.  Borrowing funds at all times instead of an occasional overnight would be wasteful interest incurred.

The point is HAVING savings from which the draw then occurs.  And it would seem that your fundamental problem IS the lack of savings.  The lack of savings then costs you far more than it is worth, although apparently you would rather have a vehicle that allows you to borrow at double-digit rates instead of having funds that were immediately available. 

[Menta33]

39 minutes ago, centex said:

The point is HAVING savings from which the draw then occurs.  And it would seem that your fundamental problem IS the lack of savings.  The lack of savings then costs you far more than it is worth, although apparently you would rather have a vehicle that allows you to borrow at double-digit rates instead of having funds that were immediately available. 

I find I do better having my savings in an investment vehicle.

[cv91915]

1 hour ago, Menta33 said:

This wouldn't work for me as the savings I would create would be inferior to the earnings I would forgo by removing money from investments that are substantially more lucrative than a savings account.

So you have zero short-term liquidity?  

 

The separate account is just money that doesn't go into a different completely liquid account.

 

I keep them separate because I'm insane.

 

 

Edited February 28, 2020 by cv91915

[Menta33]

48 minutes ago, cv91915 said:

So you have zero short-term liquidity?  

 

The separate account is just money that doesn't go into a different completely liquid account.

 

I keep them separate because I'm insane.

 

 

I think we are in agreement, I wouldn't borrow at 16% to pay property taxes either.  It is just overdraft protection so I don't have to pay close attention to the balance to avoid NSF and I don't have to park extra money in the account or in savings.  I rarely use the line, but when I do, I pay it off as soon as I notice it, usually the next day.

Edited February 28, 2020 by Menta33
typo

[centex]

53 minutes ago, Menta33 said:

 I rarely use the line, but when I do, I pay it off as soon as I notice it, usually the next day.

Which means that two percent is meaningless at the small amounts being discussed.  And yes, for this discussion, $15K IS a small amount.  It is STILL a horrid rate and there are far better options for someone lacking in liquidity...

[cv91915]

59 minutes ago, Menta33 said:

I think we are in agreement, I wouldn't borrow at 16% to pay property taxes either.  It is just overdraft protection so I don't have to pay close attention to the balance to avoid NSF and I don't have to park extra money in the account or in savings.  I rarely use the line, but when I do, I pay it off as soon as I notice it, usually the next day.

/\ /\ /\ 

 

This was in response to my pre-edited post, in case anyone is beginning to think that @Menta33 is insane as I am.  

 

We must have been writing at the same time.

Edited February 28, 2020 by cv91915

[Menta33]

37 minutes ago, centex said:

And yes, for this discussion, $15K IS a small amount.

Evidence of my insanity (as defended by cv91915) that I bother with such things!

[centex]

45 minutes ago, Menta33 said:

Evidence of my insanity (as defended by cv91915) that I bother with such things!

You seem to miss CV's comment about having a savings account from which they have created their own default LOC...

 

So I opened and funded a separate savings account, and every month I transfer from checking 1/12 of the year's total irregular expenses. 

 

In the months where there is an irregular payment due, I just move the money from savings to checking and pay the bill in full.

 

I use Excel to forecast the inflow and outflow (and the account's anticipated balance at the end of each month) for three years into the future to make sure I'm contributing the correct amount each month to meet future needs.

 

I've effectively created my own "line of credit" and tied it to checking, but I receive interest instead of paying it.

 

Effective money management does not mandate one pay a penny of interest...yet you quibble about paying eighty-three of them per day (the difference between one overpriced APR and the other 'reduced' yet still overpriced APR.

 

You ALSO, as evidenced by this very thread, do not seem to understand that score is not the only thing a lender looks at in determining to whom they will extend credit.  You made a decision to modify your line downwards and the lender has made a decision not to increase it.  Such is life. 

[Kat58]

 

[cv91915]

FWIW, for "overdraft protection" I have our Bank of America Cash Rewards card tied to our checking account (no cash advance fee, but interest would start accruing immediately).

 

Now that I'm thinking about it, though, I should just unhook this and go commando. 

 

If you aren't a habitual offender (> once a year) many banks will refund overdraft fees with a polite phone call. 

 

On the rare occasions in the distant past when I've been sloppy, that's how it's worked out for me.

 

[hdporter]

2 hours ago, cv91915 said:

FWIW, for "overdraft protection" I have our Bank of America Cash Rewards card tied to our checking account (no cash advance fee, but interest would start accruing immediately).

 

 

Those are unusual terms.   (Bev's Cash Rewards has a 3% fee for a transfer to checking.)  I assume, at least, that a cash advance APR applies, rather than your purchase rate.

[cv91915]

53 minutes ago, hdporter said:

 

Those are unusual terms.   (Bev's Cash Rewards has a 3% fee for a transfer to checking.)  I assume, at least, that a cash advance APR applies, rather than your purchase rate.

3% fee when used as OD protection? 

 

Perhaps this is one of those Preferred Rewards benefits that make it worth parking some Vanguard ETFs you'd own anyway at Merrill. 😛 

 

I only ask about APR when I expect it to matter.    

[cputrwz]

NavChek has a 15k limit...they don't go higher.  I had a situation where I refinanced my house but they wanted me to close some of my credit accounts.  My NavChek was one of them.... I did not want to do it so I devised a scheme that I worked out with a manager at NFCU.  

 

I closed the account but they lowered the limit down to 500 dollars before they closed it.  Also note, you can only ever have 1 NavChek tied to one checking account.  

 

Once my refinance was closed, I called the manager back and he helped me reapply for a new NavChek but it had to be on a new checking account.  The reason why I had to lower the other down to 500 before I closed it, is that their system has some wonky thing with them and will only ever allow you to have a 15k limit on them even if you have a closed one.  At least I think that was the reason... I'm a bit fuzzy on why I had to make sure I lowered the limit before I closed it... anyhoo...

 

I applied for the new NavChek on the new checking account and it was approved for 14.5k and it lowered the interest rate by like 1 or 2%.  I think it's 8.9% now or something which is better than some of my credit cards ... I only got 14.5k because of the other one with the 500 dollar limit.

 

Also, alternatively, you can send Navy a secured message and once a year they will do a complementary rate check on your accounts.  If your score qualifies you for a lower interest rate, they will bump you down.

 

Hope that helps.

Edited May 10, 2020 by cputrwz

[cv91915]

1 hour ago, cputrwz said:

Hope

Good lord, where have you been?   

 

 

[cputrwz]

52 minutes ago, cv91915 said:

Good lord, where have you been?   

 

 

Haha, hi!!!!  I didn't think anybody would remember me....   I saw you had posted in this thread and wondered if you would notice.  How are you?

[cv91915]

1 hour ago, cputrwz said:

Haha, hi!!!!  I didn't think anybody would remember me....   I saw you had posted in this thread and wondered if you would notice.  How are you?

I've gotten punchier, less tolerant and even more elitist since you were a regular.  But if you come back and stay I promise to be lovely to you. 

 

Good to see you.  Your "new baby" must be in college by now.  😛  Hope you're well.