Don’t get me wrong here. I use my Tangerine Line of Credit (LOC) like my Tangerine Money-Back Credit Card.
I pay all the balance every month. And that goes to all my credit cards.
My Tangerine Line of Credit is seldom used but recently I thought of sending money in the Philippines a week before a month ends, so my family can settle the bills immediately and buy essential goods.
I send through Remitly on their bank account or on my PNB account first to keep it active and avoid paying inactive fee.
So is that enough justification on why I use my line of credit?
Next, how about telling the feature of Tangerine mobile app that makes it more appealing to use that I don’t have to worry about the interest.
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The Feature of Tangerine App that Got It Right
Before I have a Tangerine line of credit, I was pre-approved for a TD line of credit.
While browsing on Reddit, I saw a post about it and wondered why I didn’t get an invite. My complain was probably heard because I received an email and applied immediately. Lo and behold, I didn’t expect to get a high line of credit that fast.
Fortunately, the process is more convenient. You now apply for a Tangerine line of credit using its mobile app.
Since then I’ve been using the line of credit for huge spending like remitting and investing on ETF through Questrade.
As I said, I pay all the balance as soon as I get paid on my day job or side hustle of blogging.
I noticed that there are three choices on how to pay Tangerine line of credit
- Pay any amount
- Pay the minimum payment of $25
- Pay the full balance including any fees and interest
When it’s time to pay, I always choose to pay the full balance plus interest.
Here, I borrowed $920 and paid $2.23 for interest. By far this is the biggest interest that I paid.
Usually, I pay cents in interest. It happened because there was a huge gap of time between my spending and getting paid from my full-time job.
My plan is to save cash that I can use for remitting money anytime instead of waiting for paycheck.
The Cost of Using Tangerine Line of Credit
From the time I was approved, my interest rate hasn’t changed (6.45%).
Tangerine interest rate = Tangerine prime rate (2.45) + 4% = 6.45%
The interest of Tangerine may varies depending on the prime rate.
I’m waiting to get a lower rate for my Tangerine line of credit. Should I ask which I never done before?
It’s nice to borrow on a low interest when I have no other option in the future. I will avoid getting in debt by saving for different funds (travel, rent, dental etc.) on my Tangerine account.
Something to Emulate
As one of the Big Five, TD should emulate the features of Tangerine app. I always have to guess how much is the interest every time I have to pay the balance.
That’s why my line of credit always end up with negative value meaning TD owes me a bit of cash.
It’s not a lot but it’s somewhat annoying sometimes.
I am not sure if this is what is going on with other banks. I can ask my friends but the problem is they don’t have line of credit. They are debt averse.
What’s to be afraid of when you are going to responsibly use a credit?
Resource from My Fave Freedom 35 Blog: How to Get the Most from Your Line of Credit
Final Thoughts
Similar to using a credit card, having a line of credit requires discipline and courage to try something new.
It can be an advantage for those who diligently pay in time every month. I wouldn’t recommend it to someone who cannot manage their spending habit.
For now I am content with my two line of credits. I may have to close an old account depending on annual increase of maintaining balance on my chequing account. This happens to most Canadian banks.
With years of having an LOC, try to negotiate to get a lower interest rate.
From what bank do you have a line of credit? What do you often use it with?
Share Your Thoughts