Is it a good idea to get a home equity line of credit to pay off credit cards?

Question

Is it a good idea to get a home equity line of credit to pay off credit cards?

Answer 1

A line of credit is just another credit card. If the interest rate with the line of credit is less than the interest rate on the credit card then it would be a good idea. Of course, you want to try very hard not to run up your debt again.

Answer 2

It's not.  First, you probably can't get one any more.  But, more importantly, credit card debt is unsecured.  A home equity loan is secured by your house.  By taking out a home equity loan and paying off the credit cards, you are turning unsecured debt into secured debt.  You are putting your house on the line for your credit card debt.  It's really a bad idea.

Answer 3

My Wife and I did this very thing almost 3 years ago and it saved us over $600.00 a month.

The thing you have to get used to is using your credit cards and paying them off in full every month.

We have not paid a dime in interest on credit cards since we did this but have writen off the interest on our taxs we paid on the loan.

Answer 4

Not usually since most people who get into credit card debt will do it again and now risk their house.

Answer 5

You need a written plan for your money, not voodoo methods of surfing debt around.