3 ms·

And Canada has another slightly in between device that's super useful and mostly inaccessible in the US. Going negative in an easy to transact, straightforward

by xster 8y ago

And Canada has another slightly in between device that's super useful and mostly inaccessible in the US. Going negative in an easy to transact, straightforward pay-for-amount-and-duration-of-debt from your bank has no US equivalents. Having an unsecured line of credit along with your checking account is extremely convenient if you generally try to invest your savings and very occasionally need to go under temporarily. It's not like a credit card. The super multi-faceted it-can-very-conditionally-be-used-to-consolidate-cash-debts-with-low-introductory-APR-but-is-also-a-purchase-transactional-tool-with-a-grace-period-except-when-you-break-it-then-you-get-20%-APR-and-get-charged-retroactive-debt-from-the-time-of-transaction-plus-all-your-subsequent-transations-all-have-no-grace-periods-until-you-do-something-magical-to-reset-the-state-of-your-account-and-all-that-except-when-you-do-any-cash-advances-in-which-case-all-bets-are-off is unexplainable and uncalculatable for normal people. It's not like a loan because loans need paperwork and issuing per instance per purpose. And each time you use it triggers effects on your credit score. A line of credit is always there and free if you don't use it and you can use it on a whim for any arbitrary reasons. It's not like taking money out of your investments because liquidating assets and possibly transferring between your brokerage and banking accounts can take a week. A line of credit can be cash in your checking account in milliseconds. Edit: correction, it's not really inaccessible in the US, just a fringe product with 12% APR and other catches like no debt monthly fees vs 5% and no catch in Canada.

winter_blue 8y ago
Charles Schwab Bank[1] has something similar called an "Overdraft Line of Credit". You can overdraw your checking account, up to the line of credit amount (which can be as high as $10,000). There are no overdraft fees. You just pay a relatively-high interest, which for me is 13.99%. Nothing else. No catches, no hidden fees or surcharges. No other U.S. bank that I'm aware of offers this feature. This feature is fairly hidden on their website. I read about it somewhere, and asked about it through their chat. The gave me a link to a PDF application form. I had to print out the PDF, fill it out with a pen, and mail it out (you can't apply online). I was approved a week or two later. [1] It's the Bank that offers this -- not the brokerage service of Charles Schwab. There's a second overdraft service offered through Charles Schwab itself -- this overdraft service is a margin loan secured by equities in your brokerage account. You can actually combine both overdraft services. The Schwab Bank Overdraft Line of Credit application form asks which type of overdraft line of credit to use first.

by xster 8y ago

winter_blue 8y ago

Charles Schwab Bank[1] has something similar called an "Overdraft Line of Credit". You can overdraw your checking account, up to the line of credit amount (which can be as high as $10,000). There are no overdraft fees. You just pay a relatively-high interest, which for me is 13.99%. Nothing else. No catches, no hidden fees or surcharges. No other U.S. bank that I'm aware of offers this feature. This feature is fairly hidden on their website. I read about it somewhere, and asked about it through their chat. The gave me a link to a PDF application form. I had to print out the PDF, fill it out with a pen, and mail it out (you can't apply online). I was approved a week or two later. [1] It's the Bank that offers this -- not the brokerage service of Charles Schwab. There's a second overdraft service offered through Charles Schwab itself -- this overdraft service is a margin loan secured by equities in your brokerage account. You can actually combine both overdraft services. The Schwab Bank Overdraft Line of Credit application form asks which type of overdraft line of credit to use first.