Transaction Fees on LOC

[PeggyFair]

Hi everybody,

In March I got a $15,000 line of credit through GE to cosolidate some debt I wracked up while underemployed. Thankfully, I only have only 3500 to go before it is paid off. But the thing I don't like about it is something called a "transaction fee" that I must pay just to access the money! The minimum fee is 5 bucks, the max is 75, and I want to know what is the purpose of this transaction fee. Is this just another way for creditors to make money or does it really cost them for me to acess the loc? I notice that other lines of credits have transaction fees too.

[safari]

Transaction fee is just another way for banks to make money. Not all HELOC's have transaction fees though. But since you're just paying off your balance and not writing checks against your line of credit, it shouldn't matter.

[PeggyFair]

Thanks for the response. This is not really a HELOC, since I don't own a home(YET!), it's just a basic line of credit that I can access anytime I want. But I don't think I will be accessing it if I have to pay money to get money. That's just as bad as having to pay money to pay a bill like some of these online bill payment services try to do.

[Scanner]

I wish Congress would clamp down on bank fees. I realize they are in business to make money but they do it in devious ways - a lower interest rate which is then offset by higher fees.

My unsecured LOC has no transaction fees but does have an account maintenance fee once/year. The interest rate is high and I should probably be shopping elsewhere but this is where I have done business for 5 years (Bank of America).

[PeggyFair]

It sucks doesn't it? The banking industry has alot of these politicians in their hip pocket so Americans, especially the middle class, gets screwed. I just joined a credit union through my new job and I am definitely going to drop the traditional banks and credit cards altogether and just get my financial products through them.

[Aleta]

They also are the slowest when it comes to raising the interest that they give to you. Unlike the mutual fund companies that change weekly. The banks are definitely going to have to change or relax some of their rules before they lose alot of their business to online banking.

[PeggyFair]

Thank God for online banking and credit unions. Right now, I have a checking account with BOA and keep just the minimum amount needed to pay monthly expenses and to get cash when I need it from their vast ATM network. Everything else is in my savings account at my credit union which I am planning to transfer to an online bank in a few months.

[rooskers]

Peggy why wait a few months to go to an online savings bank. Right now FNBO is paying 6% for their savings account through Sept. Waiting will just lose you money.

[Aleta]

I agree. I just went to FNBO last week as well. I look at the May to September offer like a 4 month CD that I can cash out when I want without penalties. Plus, before the offer, they were paying 5.25% for their savings. That's what some CD's are paying right now. Plus, they have been around for many, many years.